Document:

Exhibit

Exhibit10.3

LIMITED CONSENT AND FIRST AMENDMENT 
TO ABL CREDIT AGREEMENT
This LIMITED CONSENT AND FIRST AMENDMENT TO ABL CREDIT AGREEMENT (this “Amendment”), is made and entered into as of March 9, 2020, by and among Basic Energy Services, Inc., a Delaware corporation (the “Borrower”), the Subsidiaries of the Borrower party to the Amendment (collectively, the “Guarantors”), the financial institutions party to this Amendment (collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking association (“Bank of America”), as administrative agent for the Lenders (in such capacity, “Administrative Agent”), a Swing Line Lender and an L/C Issuer.
A.    The Borrower has entered into that certain ABL Credit Agreement, dated as of October 2, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), with the Lenders party thereto and the Administrative Agent;
B.    The Borrower has advised the Administrative Agent and the Lenders that it intends to acquire all of the issued and outstanding shares of capital stock of C&J Well Services, Inc., a Delaware corporation (“C&J Well Services”), pursuant to the C&J Acquisition Agreement (as defined herein) (the “C&J Acquisition”).
C.    In connection with the C&J Acquisition, the Borrower has advised the Administrative Agent and the Lenders that (i) Ascribe III Investments LLC, a Delaware limited liability company (“Ascribe”), will transfer, for the benefit and account of the Borrower, certain Senior Notes held by Ascribe to NexTier Holding Co., a Delaware corporation, as partial payment for the capital stock of C&J Well Services, and the Borrower will deliver to Ascribe Equity Interests (the “Exchange Transaction”) in the Borrower that will cause Ascribe to own greater than eighty percent (80%) of the aggregate Equity Interests of the Borrower (the “Change of Control Transaction”), and (ii) the Borrower will issue the Bridge Note (as defined below) to evidence a loan made by Ascribe to finance a portion of the C&J Acquisition. 
D.    The Borrower and the parties hereto have agreed to reduce the Aggregate Commitments from $150,000,000 to $120,000,000. 
E.    In consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.    Definitions. All terms used herein that are defined in the Credit Agreement and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
2.    Amendments.
(a)    New Definitions. Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions, in appropriate alphabetical order:
“Ascribe” means Ascribe III Investments LLC, a Delaware limited liability company.

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“BHC Act Affiliate” means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)).
“Bridge Note” means that certain Senior Secured Promissory Note dated as of the First Amendment Effective Date, executed by the Borrower and payable to Ascribe, and guaranteed by the Guarantors, in the principal amount of $15,000,000.00.
“C&J Acquisition” means the Acquisition by the Borrower of all of the issued and outstanding shares of capital stock of C&J Well Services pursuant to the C&J Acquisition Agreement and the other related transactions contemplated thereby. 
“C&J Acquisition Agreement” means that certain Purchase Agreement dated as of March 9, 2020, by and among the Borrower, Ascribe, NexTier and C&J Well Services and the related documents contemplated thereby. 
“C&J Entities” means C&J Well Services, KVS Transportation, Inc., a California corporation, and Indigo Injection #3, LLC, a Texas limited liability company.
“C&J Well Services” means C&J Well Services, Inc., a Delaware corporation.
“Change of Control Transaction” has the meaning set forth in the First Amendment.
“Covered Entity” means (a) a “covered entity”, as defined and interpreted in accordance with 12 C.F.R. §252.82(b); (b) a “covered bank”, as defined in and interpreted in accordance with 12 C.F.R. §47.3(b); or (c) a “covered FSI”, as defined in and interpreted in accordance with 12 C.F.R. §382.2(b).
“Covered Party” has the meaning set forth in Section 10.25.
“Default Right” shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
 “Eligible Pledged Cash” means, at any date of determination, all of the available cash of the Loan Parties at such that date that (a) is subject to a first priority lien and exclusive control of the Administrative Agent, (b) does not constitute proceeds of Senior Notes Collateral (as defined in the Security Agreement) and (c) is held in a segregated and restricted Deposit Account (that is not a Senior Notes Collateral Account) established with the Administrative Agent.
“Exchange Transaction” has the meaning set forth in the First Amendment.
“First Amendment” means that certain Limited Consent and First Amendment to ABL Credit Agreement dated as of the First Amendment Effective Date by and among the Borrower, the Guarantors, the Lenders party thereto and the Administrative Agent. 
“First Amendment Effective Date” means March 9, 2020.

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“Make-Whole Payment” shall have the meaning set forth in the C&J Acquisition Agreement.
“NexTier” means NexTier Holding Co., a Delaware corporation.
“QFC” means a “qualified financial contract”, as defined in and interpreted in accordance with 12 U.S.C. §5390(c)(8)(D).
“QFC Credit Support” has the meaning set forth in Section 10.25.
“Supported QFC” has the meaning set forth in Section 10.25.
(b)    Existing Definitions. Section 1.01 of the Credit Agreement is hereby amended by modifying the following existing definitions set forth therein as follows:
“Borrowing Base” means, on any date of determination, an amount equal to the lesser of (a) the Aggregate Commitments; or (b) the sum, without duplication, of the following:
(i)    85% of the Value of Eligible Accounts, plus
(ii)    the lesser of (A) 80% of the Value of Eligible Unbilled Accounts or (B) $30,000,000, plus
(iii)    100% of the Eligible Pledged Cash, minus
(iv)     the Availability Reserve.
No Borrowing Base calculation shall include Collateral acquired in a Permitted Acquisition or otherwise outside the ordinary course of business until completion of applicable field examinations satisfactory to Administrative Agent (which shall not be included in the limits provided in Section 6.10(b)); provided that, until a field examination with respect to the Accounts owing to the C&J Entities reasonably satisfactory to Administrative Agent is received by Administrative Agent, the Accounts owing to the C&J Entities which qualify as Eligible Accounts shall be temporarily included in the Borrowing Base in an amount equal to 80% of the Value of such Eligible Accounts of the C&J Entities; provided, further, that if such reasonably satisfactory field examination is not received on or prior to the date that is ninety (90) days after the First Amendment Effective Date, no Eligible Accounts of C&J Well Services shall be included in the Borrowing Base until such satisfactory field examination has been received by the Administrative Agent.
“Cash Dominion Trigger Period” means the period (a) commencing on the day that (i) an Event of Default occurs, or (ii) Availability is less than the greater of (x) 12.5% of the Borrowing Base or (y) $15,000,000, and (b) continuing until, during each of the preceding 30 consecutive days, no Event of Default has existed and Availability has at all times exceeded the greater of (i) 12.5% of the Borrowing Base or (ii) $15,000,000.
“Consolidated Fixed Charges” means (a) the sum of (i) Consolidated Interest Charges (other than payment-in-kind or amortization of fees and other non-cash items 

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treated as interest in accordance with GAAP), (ii) scheduled principal payments and voluntary prepayments made on borrowed money (including purchase money Indebtedness, Attributable Indebtedness and the deferred purchase price of property or services), (iii) Restricted Payments made, (iv) any reimbursement paid by a Loan Party for the Make-Whole Payment, and (v) repayments of the Bridge Note not using proceeds from the sale of fixed assets constituting collateral for the Senior Notes. For the avoidance of doubt, repayments of the Bridge Note solely using proceeds from the sale of fixed assets constituting collateral for the Senior Notes shall not be Consolidated Fixed Charges.
“Financial Covenant Trigger Period” means the period (a) commencing on the day that Availability is less than the greater of 12.5% of the Borrowing Base or $15,000,000, and (b) continuing until, during each of the preceding 30 consecutive days, Availability has at all times exceeded the greater of 12.5% of the Borrowing Base or $15,000,000.
“Monthly Financial Reporting Trigger Period” means the period (a) commencing on the day that Availability is less than the greater of (i) 15% of the Borrowing Base or (ii) $18,000,000, and (b) continuing until, during each of the preceding 30 consecutive days, Availability has at all times exceeded the greater of (i) 15% of the Borrowing Base or (ii) $18,000,000.
“Payment Conditions” means, in the case of Acquisitions, prepayments of Indebtedness and Restricted Payments, that no Default or Event of Default has occurred and is continuing or would result therefrom and the following:
(a)    with respect to Acquisitions and prepayments of Indebtedness (other than any reimbursement for the Make-Whole Payment), either: 
(i)    Availability shall be higher than the greater of (A) 20% of the Borrowing Base and (B) $24,000,000, in each case on a pro forma basis for each day during the consecutive 30-day period immediately preceding such transaction and after giving effect thereto as though such Acquisition or prepayment of Indebtedness (and any Loans being requested to fund any part thereof) had been made on the first day of such 30-day period; or
(ii)    both (A) the Pro Forma Consolidated Fixed Charge Coverage Ratio after giving effect to such transaction shall be greater than 1.00 to 1.00 for the most recently reported Measurement Period, and (B) Availability shall be higher than the greater of (1) 15% of the Borrowing Base and (2) $18,000,000, in the case of this subclause (B) on a pro forma basis for each day during the consecutive 30-day period immediately preceding such transaction and after giving effect thereto as though such Acquisition or prepayment of Indebtedness (and any Loans being requested to fund any part thereof) had been made on the first day of such 30-day period; 
(b)    with respect to Restricted Payments and any reimbursement for the Make-Whole Payment, either: 
(i)    Availability shall be higher than the greater of (A) 22.5% of the Borrowing Base and (B) $27,000,000, in each case on a pro forma basis for each day during 

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the consecutive 30-day period immediately preceding such Restricted Payment or such reimbursement for the Make-Whole Payment and after giving effect thereto as though such Restricted Payment or such reimbursement for the Make-Whole Payment (and any Loans being requested to fund any part thereof) had been made on the first day of such 30-day period; or
(ii)    both (A) the Pro Forma Consolidated Fixed Charge Coverage Ratio after giving effect to such transaction shall be greater than 1.00 to 1.00 for the most recently reported Measurement Period, and (B) Availability shall be higher than the greater of (1) 17.5% of the Borrowing Base and (2) $21,000,000, in the case of this subclause (B) on a pro forma basis for each day during the consecutive 30-day period immediately preceding such Restricted Payment or such reimbursement for the Make-Whole Payment and after giving effect thereto as though such Restricted Payment or such reimbursement for the Make-Whole Payment (and any Loans being requested to fund any part thereof) had been made on the first day of such 30-day period.
(c)    in any case under (a) or (b) above, delivery to Administrative Agent at least three (3) Business Days and not more than five (5) Business Days prior to the date of the proposed Acquisition, prepayment of Indebtedness, Restricted Payment or any reimbursement for the Make-Whole Payment of a certificate of the Borrower signed by the chief executive officer, chief financial officer, treasurer or controller of the Borrower giving notice of the intent to consummate such Acquisition, prepayment of Indebtedness, Restricted Payment or such reimbursement for the Make-Whole Payment and certifying compliance with the applicable foregoing conditions (including calculations of Availability for the applicable days and, if applicable, of the Pro Forma Consolidated Fixed Charge Coverage Ratio). 
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment; provided, that, for the avoidance of doubt, any payment or reimbursement made with respect to the Make-Whole Payment and the related $1,000,000 fee payable to Ascribe in connection with Ascribe’s agreement to make the Make-Whole Payment shall not be a Restricted Payment.
 “Senior Notes” means (a) those certain 10.75% Senior Secured Notes due 2023 of the Borrower and (b) any Additional Notes (as defined in the Senior Notes Indenture) issued in lieu of any cash reimbursement with respect to the Make-Whole Payment. 
“Weekly BBC Trigger Period” means the period (a) commencing on the day that (i) an Event of Default occurs, or (ii) Availability is less than the greater of (x) 12.5% of the Borrowing Base or (y) $15,000,000and (b) continuing until, during each of the preceding 30 consecutive days, no Event of Default has existed and Availability 

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has at all times exceeded the greater of (i) 12.5% of the Borrowing Base or (ii) $15,000,000.
(c)    Inspection Rights. Section 6.10(b) of the Credit Agreement is hereby amended to replace the reference to “$33,750,000” therein to “$27,000,000”.
(d)    Liens. Section 7.01(l) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(l)    Liens on property of the Borrower and the Guarantors not constituting Collateral securing Indebtedness permitted under Sections 7.02(g) and 7.02(o);
(e)    Senior Secured Notes. Clause (i) of Section 7.02(g) is hereby amended and restated in its entirety to read as follows:
(l)    the Senior Notes in an aggregate principal amount not to exceed the sum of (A) $300,000,000 plus (B) the aggregate principal amount of Senior Notes issued to Ascribe in lieu of any cash reimbursement with respect to the Make-Whole Payment;
(f)    Other Indebtedness. Section 7.02 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (l) thereof, (ii) replacing the “.” at the end of clause (m) thereof with an “;” and (iii) adding a new clauses (n) and (o) which shall read as follows:
(n)    Indebtedness in respect of the Make-Whole Payment; and
(o)    Indebtedness evidenced by the Bridge Note.
(g)    Investments. Section 7.03 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of clause (i) thereof, (ii) replacing the “.” at the end of clause (j) thereof with an “;”and (iii) adding new clauses (k) and (l) which shall read as follows:
(k)    the C&J Acquisition; and
(l)    (i) C&J Well Services’ Investments as of the First Amendment Effective Date in North Dakota SWD Well #1, LLC, a North Dakota limited liability company, and (ii) Indigo Injection #3, LLC’s Investments as of the First Amendment Effective Date in Indigo Injection #3-1, LLC, a Delaware limited liability company.
(h)    Transactions with Affiliates. Section 7.08 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
7.08    Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Restricted Subsidiary as would be obtainable by the Borrower or such Restricted Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restriction shall not apply to (a) transactions solely between or among the Loan Parties, (b) compensation to, and the terms of any employment contracts with, individuals who are officers, managers or directors of the Loan Parties in the ordinary course of business, provided 

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that, to the extent such approval is required, such compensation is approved by such Loan Party’s board of directors (or equivalent governing body), (c) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans in each case, as permitted by this Agreement, (d) Restricted Payments permitted pursuant to Section 7.06, (e) the Borrower’s Indebtedness in respect of the Make-Whole Payment, any reimbursement with respect thereto permitted pursuant to Section 7.14 and the related $1,000,000 fee payable to Ascribe in connection with Ascribe’s agreement to make the Make-Whole Payment, (f) the Change of Control Transaction, (g) the consummation of the Exchange Transaction, or (h) the Bridge Note (including any upfront or commitment fees in connection therewith). 
(i)    Prepayments, Etc. of Indebtedness. Section 7.14 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
7.14    Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Indebtedness, except (a) the prepayment of the Credit Extensions in accordance with the terms of this Agreement, (b) regularly scheduled payments of principal of Indebtedness set forth on Schedule 7.02 (other than relating to the Bridge Note), (c) mandatory prepayments or redemptions of the Senior Notes as required under the Senior Notes Indenture as in effect on the date hereof, (d) refinancings, refundings, extensions or renewals of Indebtedness to the extent such refinancing, refunding, extension or renewal is permitted by Sections 7.02(d) or 7.02(g)(ii), as applicable, (e) the conversion to or exchange for Equity Interests of convertible or exchangeable debt securities, and customary payments in cash in lieu of fractional shares in connection therewith, (f) any other prepayments or redemptions with respect to Indebtedness not otherwise permitted pursuant to this Section 7.14; provided that, in the case of this clause (f), the applicable Payment Conditions are satisfied before and after giving effect thereto, (g) any reimbursement for the Make-Whole Payment so long as (i) such reimbursement is made through the issuance of additional Senior Notes or (ii) if such reimbursement is not made pursuant to clause (g)(i), the applicable Payment Conditions are satisfied before and after giving effect thereto, (h) the consummation of the Exchange Transaction, (i) prepayments of Indebtedness relating to the Bridge Note so long as (i) such prepayments are made solely with proceeds from the sale of fixed assets constituting collateral for the Senior Notes (including the repayment of Capitalized Leases relating to such fixed assets) and not with the proceeds of any Collateral or (ii) if such prepayments are not made pursuant to clause (i)(i), the applicable Payment Conditions are satisfied before and after giving effect thereto, and (j) prepayments of Indebtedness relating to the repayment of Capitalized Leases so long as (i) such prepayments are made solely with proceeds from the sale of fixed assets constituting collateral for the Senior Notes and not with the proceeds of any Collateral or (ii) if such prepayments are not made pursuant to clause (j)(i), the applicable Payment Conditions are satisfied before and after giving effect thereto.
(j)    Amendments, Etc. of Indebtedness. A new clause (c) is hereby added to Section 7.15 of the Credit Agreement to read as follows:

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(c)    Amend, modify or change in any manner any term or condition of Bridge Note or any other material agreements, supplements and other documents executed in connection therewith, except for any amendments or modifications made to cure any ambiguity, defect or inconsistency.
(k)    Acknowledgment Regarding Supported QFCs. Article X of the Credit Agreement is hereby amended by adding a new Section 10.25, which shall read as follows:
10.25    Acknowledgement Regarding Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap Contract or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
If a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regimes if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regimes if the Supported QFC and Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(l)    Commitments and Applicable Percentages. The “Commitments and Applicable Percentages” table set forth on Schedule 1.01 to the Credit Agreement is amended and restated in its entirety as set forth on Schedule 1 attached hereto.
(m)    Borrowing Base Certificate. Exhibit J to the Credit Agreement is amended and restated in its entirety as set forth on Schedule 2 attached hereto.
3.    Assignment and Reallocation of Commitments. On the Amendment Effective Date (as defined below), each Lender hereby sells, assigns, transfers and conveys to the other Lenders, 

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and each Lender hereby purchases and accepts, so much of the Commitments and the outstanding Loans under the Credit Agreement such that immediately after giving effect to this Amendment, the Commitment of each Lender shall be as set forth on Schedule 2 hereto. The foregoing assignments, transfers and conveyances are without recourse to any Lender and without warranties whatsoever by Administrative Agent as to title, enforceability, collectability or freedom from liens and encumbrances, in whole or in part, other than the warranty of any such assigning Lender that it has not previously sold, transferred, conveyed, encumbered or assigned such interests.
4.    Limited Consent. In reliance upon the representations, warranties, covenants and agreements contained in this Amendment, and subject to the terms and conditions set forth in this Section 4 and the conditions precedent set forth in Section 5 below, and notwithstanding anything to the contrary in the Credit Agreement, the Lenders party hereto hereby consent to the consummation of the C&J Acquisition, the Exchange Transaction and the Change of Control Transaction (collectively, the “Specified Transactions”) and agree that, notwithstanding anything to the contrary in the Credit Agreement or any Loan Document, the consummation of the Specified Transactions shall not constitute a Default or Event of Default under the Credit Agreement or any other Loan Document. The consent granted herein is limited solely to the Specified Transactions, and nothing contained in this Amendment shall be deemed a consent to, or waiver of, any other action or inaction of any Loan Party or any other Person which constitutes (or would constitute) a violation of any provision of the Credit Agreement or any other Loan Document. Neither the Lenders nor the Administrative Agent shall be obligated to grant any future waivers, consents or amendments with respect to any provision of the Credit Agreement or any other Loan Document.
5.    Conditions to Effectiveness. This Amendment shall become effective as of the date first written above only upon satisfaction in full (or written waiver by the Administrative Agent) of the following conditions precedent to the satisfaction of Administrative Agent and the Lenders (the “Amendment Effective Date”):
(a)    Delivery of Documents. Administrative Agent shall have received on or before the Amendment Effective Date the following, each dated the Amendment Effective Date, unless indicated otherwise:
(i)    this Amendment, duly executed by the Borrower, the Guarantors, Administrative Agent and the Super Majority Lenders; 
(ii)    a Security Agreement Supplement (which will include a guaranty joinder) and any other security agreements specified by Administrative Agent, in each case, duly executed by C&J Entities;
(iii)    a copy of the fully executed C&J Acquisition Agreement and all material agreements, supplements and other documents executed in connection therewith, in each case, in form and substance satisfactory to the Administrative Agent;
(iv)    a copy of the fully executed Exchange Agreement (as defined in the C&J Acquisition Agreement), in form and substance satisfactory to the Administrative Agent;
(v)    a copy of the fully executed copy Bridge Note and all material agreements, supplements and other documents executed in connection therewith, in each case, in form and substance satisfactory to the Administrative Agent;

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(vi)    a certificate, in form and substance reasonably satisfactory to Administrative Agent, from a Responsible Officer of each of the C&J Entities certifying and attaching, as applicable, (A) true and correct copies of such C&J Entity’s Organization Documents; (B) resolutions authorizing such C&J Entity to join the Loan Documents as Guarantors, authorizing the execution and delivery of this Amendment and the other transactions contemplated hereunder; (C) good standing certificates such C&J Entity, issued by its jurisdiction of organization; and (D) to the incumbency of each Person authorized to sign the Loan Documents on behalf of such C&J Entity;
(vii)    a certificate, in form and substance reasonably satisfactory to Administrative Agent, from a Responsible Officer of the Borrower certifying as to the representations and warranties set forth in Sections 6(a), (b) and (e);
(viii)    a certificate of each Loan Party certifying (A) that there has been no change to the Loan Parties’ Organization Documents since the Closing Date (or otherwise attaching such changed Organization Documents or resolutions) and (B) resolutions authorizing execution and delivery of this Amendment, the C&J Acquisition and the other transactions contemplated hereunder;
(ix)    good standing certificates of each Loan Party, issued by the Secretary of State or other appropriate official of such Loan Party’s jurisdiction of organization;
(x)    a favorable written opinion of Thompson & Knight LLP, counsel to the Loan Parties addressed to the Administrative Agent and each Lender, with respect to this Amendment and adding the C&J Entities as Guarantors and debtors under the Security Agreement;
(xi)    a copy of the executed Release and Termination Agreements (as defined in the C&J Acquisition Agreement) or other evidence satisfactory to Administrative Agent that each of the C&J Entities has been released from any liability as a guarantor with respect to the Indebtedness arising under the credit agreements listed on Schedule 3.5 of the C&J Acquisition Agreement and all Liens granted by the C&J Entities with respect thereto have been released; 
(xii)    UCC and Lien searches covering the C&J Entities showing that there are no Liens upon the Collateral owned by the C&J Entities, other than Liens permitted by Section 7.01 of the Credit Agreement; 
(xiii)    proper Financing Statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Security Agreement Supplement executed by the C&J Entities; 
(xiv)    an updated Borrowing Base Certificate after giving effect to the C&J Acquisition and this Amendment; and
(xv)    satisfactory certificates of insurance for the C&J Entities naming the Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies with respect to the assets of the C&J Entities that constitute Collateral; 
(b)    Fees and Expenses. The Borrower shall have paid (i) a consent fee of $25,000 to each Lender executing this Amendment, which fee shall be non-refundable and fully earned and 

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due and payable in cash on the date hereof, and (ii) all other fees and expenses to be paid to Administrative Agent pursuant to the Administrative Agent’s supplemental fee letter or incurred on or prior to the Amendment Effective Date that are required to be paid under the Loan Documents, including all accrued fees of Administrative Agent’s legal counsel.
6.    Representations and Warranties. The Borrower hereby represents and warrants to Administrative Agent and Lenders as follows:
(a)    Representations and Warranties. After giving effect to this Amendment, the representations and warranties herein, in Article V of the Credit Agreement and in each other Loan Document are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to materiality in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such date as though made on and as of such date (except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case, such representation or warranty shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to materiality in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date).
(b)    No Default. No Default or Event of Default has occurred and is continuing as of the Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms.
(c)    Authorization, Etc. Each Loan Party is duly authorized to execute, deliver and perform this Amendment and each other Loan Document to which it is a party. The execution, delivery and performance of the Loan Documents, as amended hereby, have been duly authorized by all necessary action, and do not (i) contravene the terms of any Loan Party’s Organization Documents; (ii) conflict with or result in any breach or contravention of, under, or require any payment to be made under any Contractual Obligation to which a Loan Party is a party or affecting a Loan Party or the properties of a Loan Party or any of its Restricted Subsidiaries, except for conflicts, breaches or contraventions that could not reasonably be expected to result in a Material Adverse Effect, (iii) violate any Law or any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which a Loan Party or its property is subject; or (iv) result in the creation or imposition of any Lien on any property of the Borrower or any Restricted Subsidiary except Liens created under the Loan Documents. 
(d)    Enforceability of Loan Documents. This Amendment is, and each other Loan Document to which any Loan Party is a party, is, a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, except as enforceability may be limited by equitable principles or by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.
(e)    Governmental Approvals. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Amendment or any other Loan Document. 

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(f)    Indenture Compliance.  Neither the execution or performance of this Amendment, nor the consummation of any of the Specified Transactions, violates any of the terms of the Senior Notes Indenture, including Sections 3.2 and 3.3 thereof, or any of the other Senior Notes Documents.
7.    Continued Effectiveness of the Credit Agreement and Other Loan Documents. Each Loan Party hereby (a) acknowledges and consents to this Amendment, (b) confirms and agrees that the Credit Agreement and each other Loan Document to which it is a party, in each case, to the extent amended hereby, is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the Amendment Effective Date, all references in any such Loan Document to the “Credit Agreement”, the “Agreement”, “thereto”, “thereof’, “thereunder” or words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended by this Amendment, and (c) confirms and agrees that, to the extent that any such Loan Document purports to assign or pledge to Administrative Agent, for the benefit of it and the Lenders, or to grant to Administrative Agent, for the benefit of it and the Lenders, a security interest in or Lien on any Collateral as security for the Obligations of the Loan Parties from time to time existing in respect of the Credit Agreement and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects. This Amendment does not and shall not affect any of the obligations of the Loan Parties, other than as expressly provided herein, including, without limitation, the Loan Parties’ obligations to repay the Loans in accordance with the terms of the Credit Agreement or the obligations of the Loan Parties under any Loan Document to which they are a party, all of which obligations, as amended hereby, shall remain in full force and effect and are hereby ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under the Credit Agreement or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document.
8.    No Novation. Nothing herein contained shall be construed as a substitution or novation of the Obligations outstanding under the Credit Agreement or instruments securing the same, which shall remain in full force and effect, except as modified hereby.
9.    No Representations by Administrative Agent or Lenders. Each Loan Party hereby acknowledges that it has not relied on any representation, written or oral, express or implied, by Administrative Agent or any Lender, other than those expressly contained herein, in entering into this Amendment.
10.    Further Assurances. The Loan Parties shall execute any and all further documents, agreements and instruments, and take all further actions, as may be required under any applicable Law or as Administrative Agent may reasonably request, in order to effect the purposes of this Amendment.
11.    Miscellaneous.
(a)    This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment.

12

(b)    Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
(c)    UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AMENDMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES THAT WOULD SELECT THE LAWS OF A DIFFERENT STATE EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.
(d)    Each Loan Party hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Credit Agreement.
(e)    Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
[Remainder of page intentionally left blank.]

13

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.
BORROWER:

BASIC ENERGY SERVICES, INC., a Delaware corporation
	
		
	By:
	/s/ Keith L. Schilling

	Name:
	Keith L. Schilling

	Title:
	President and Chief Executive Officer

GUARANTORS:

Basic Energy Services GP, LLC
Basic Energy Services LP, LLC
Basic ESA, Inc.
SCH Disposal, L.L.C.
Taylor Industries, LLC
AGUA LIBRE HOLDCO LLC
AGUA LIBRE ASSET CO LLC
AGUA LIBRE MIDSTREAM LLC

	
		
	By:
	/s/ Keith L. Schilling

	Name:
	Keith L. Schilling

	Title:
	President and Chief Executive Officer

Basic Energy Services, L.P.

By: Basic Energy Services GP, LLC, 
its General Partner

	
		
	By:
	/s/ Keith L. Schilling

	Name:
	Keith L. Schilling

	Title:
	President and Chief Executive Officer

ADMINISTRATIVE AGENT AND LENDERS:

BANK OF AMERICA, N.A., as Administrative Agent, a Lender, an L/C Issuer and Swing Line Lender

	
		
	By:
	/s/ Mark Porter

	Name:
	Mark Porter

	Title:
	Senior Vice President

UBS AG, STAMFORD BRANCH, as a Lender and a L/C Issuer
	
		
	By:
	/s/ Darlene Arias

	Name:
	Darlene Arias

	Title:
	Director

	
		
	By:
	/s/ Kenneth Chin

	Name:
	Kenneth Chin

	Title:
	Director

PNC BANK NATIONAL ASSOCIATION, 
as a Lender and a L/C Issuer
	
		
	By:
	/s/ Thomas N. Tone

	Name:
	Thomas N. Tone

	Title:
	Vice President

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, as a Lender 

	
		
	By:
	/s/ Jerra Hayden

	Name:
	Jerra Hayden

	Title:
	Senior Vice President

SIEMENS FINANCIAL SERVICES, INC., as a Lender 
	
		
	By:
	/s/ Maria Levy

	Name:
	Maria Levy

	Title:
	Vice President

	
		
	By:
	/s/ Michael L. Zion

	Name:
	Michael L. Zion

	Title:
	Vice President

Schedule 1

SCHEDULE 1.01
COMMITMENTS
AND APPLICABLE PERCENTAGES

	
			
	Lender
	Revolving Credit Commitment
	Revolving Credit Applicable Percentage

	Bank of America, N.A.
	$42,000,000.00
	35.00000000%

	PNC Bank National Association
	$40,000,000.00
	33.33333333%

	UBS AG, Stamford Branch
	$15,000,000.00
	12.50000000%

	Siemens Financial Services, Inc.
	$15,000,000.00
	12.50000000%

	Texas Capital Bank, National Association
	$8,000,000.00
	6.66666667%

	TOTAL
	$120,000,000.00
	100.000000000%

Schedule 2
EXHIBIT J
BORROWING BASE CERTIFICATE
[to be attached]

	
											
	Basic Energy Services, Inc.
	Date Prepared / Delivered
	 

	 
	 
	 
	 
	 
	 
	Current Begin Date
	 

	 
	 
	 
	 
	 
	 
	Current End Date
	 

	BORROWING BASE CERTIFICATE

	Line
	 
	 
	 
	 
	 
	 
	 
	 

	#
	 
	 
	 
	 
	As of
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	1
	 
	Gross Accounts
	 
	 
	 
	 
	 

	2
	 
	Less:  Total Ineligible Accounts
	 
	 
	 

	3
	 
	Eligible Accounts
	 
	 
	 
	 
	$
	—
	

	4
	 
	Accounts advance rate
	 
	 
	 
	85.00
	%

	5
	 
	Accounts availability (Line 3 * Line 4)
	 
	 
	$
	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 

	6
	 
	Gross Unbilled Accounts
	 
	 
	 
	 

	7
	 
	Less:  Total Ineligible Accounts
	 
	 
	 

	8
	 
	Eligible Unbilled Accounts
	 
	 
	 
	$
	—
	

	9
	 
	Unbilled Accounts advance rate
	 
	 
	80.00
	%

	10
	 
	Unbilled Accounts availability (lesser of (Line 8 * Line 9) and $30,000)
	 
	$
	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 

	11
	 
	Total collateral availability (Line 5 + Line 10)
	 
	 
	$
	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 

	12
	 
	Rent Reserve
	 
	 
	 
	 
	 

	13
	 
	Sales Tax Reserves
	 
	 
	 
	 
	 

	14
	 
	Share Repurchase Program
	 
	 
	 
	 

	15
	 
	Dilution
	 
	 
	 
	 
	 
	$
	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 

	16
	 
	Total Availability Reserve
	 
	 
	 
	$
	—
	

	17
	 
	Aggregate Commitments
	 
	 
	 
	$
	120,000
	

	18
	 
	Borrowing Base (lesser of Line 15 and Line 16)
	 
	 
	$
	—
	

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Basic Energy Services, Inc., by its duly authorized officer signing below, hereby certifies that (a) the information set forth in this certificate is true and correct as of the date(s) indicated herein and (b) each Borrower is in compliance with all terms and provisions contained in the Credit Agreement, dated as of 10/2/2018, among the Borrower and Bank of America, N.A., and the other Loan Documents (as defined in the Credit Agreement).

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Authorized Officer: David Schorlemer
	Title: Senior VP, CFO, Secretary & Treasurer

	Authorized Signature:
	 Date:

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Note: If this document is being transmitted electronically, the Borrower acknowledges that by entering the name of its duly authorized officer on the Certificate, that officer has reviewed the Certificate and affirmed the representations, warranties and certifications referenced above.Exhibit

Exhibit 10.4
SENIOR SECURED PROMISSORY NOTE
	
		
	US $15,000,000
	March 9, 2020

FOR VALUE RECEIVED, Basic Energy Services, Inc., a Delaware corporation (the “Obligor”), hereby unconditionally promises to pay to Ascribe III Investments LLC, a Delaware limited liability company (the “Payee”), the principal amount set forth in Section 3 hereto, together with interest thereon as provided in Section 2 hereof, on the Maturity Date (as defined below), on the terms and subject to the conditions provided herein.  
1.      Definitions.  
(a)    In this Note, the following terms shall have the following meanings:
“ABL Amendment” has the meaning assigned to such term in Section 5.
“ABL Credit Agreement” means that certain Credit Agreement dated as of October 2, 2018, by and among the Obligor, as borrower, the lenders party thereto and Bank of America, N.A., as administrative agent (the “ABL Agent”), as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“ABL Security Agreement” means that certain Security Agreement dated as of October 2, 2018 by and among the Obligor, the other grantors party thereto and the ABL Agent, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Acquisition” means the acquisition by the Obligor of the production business of NexTier Oilfield Solution Inc. pursuant to that certain Purchase Agreement dated as of the Effective Date by and among the Payee, the Obligor, NexTier Holding Co. and C&J Well Services, Inc.  
“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §101, et seq.).
“Bridge Loan Documents” has the meaning assigned to such term in Section 15. 
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City (New York) are authorized or required by law to close. 
“Collateral” has the meaning assigned to such term in Section 10. 
“Code” means the New York Uniform Commercial Code, as in effect from time to time; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to the Payee’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.
“Default” shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

“Dollars” and “$”means the lawful currency of the United States of America.
“Excluded Property” has the meaning set forth in the Indenture. 
“Guarantied Obligations” means all of the obligations under this Note now or hereafter existing, whether for principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), fees, the Payee’s expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), or otherwise, and 

1

any and all documented out-of-pocket expenses (including reasonable counsel fees and expenses) incurred by the Payee in enforcing any rights under the guaranty set forth herein. Without limiting the generality of the foregoing, Guarantied Obligations shall include all amounts that constitute part of the Guarantied Obligations and would be owed by the Obligor to the Payee but for the fact that they are unenforceable or not allowable, including due to the existence of a bankruptcy, reorganization, other Insolvency Proceeding or similar proceeding involving the Obligor or any Guarantor.
“Guarantors” means each person that is a subsidiary of the Obligor party hereto as a guarantor and each of the Obligor’s Subsidiaries that becomes a guarantor of this Note pursuant to Section 9 hereof. 
“Indenture” means that certain Indenture dated as of October 2, 2018 with respect to 10.75% Senior Secured Notes among Obligor and UMB Bank, N.A., as trustee and collateral agent, as amended or supplemented from time to time. 
“Indenture Security Agreement” means that certain Security Agreement dated as of October 2, 2018 by and among the Obligor, the other grantors party thereto and UMB Bank, N.A., as collateral agent, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions, generally with creditors, or proceedings seeking reorganizations, arrangement, or other similar relief.   
“Lien” means any mortgage, pledge, security interest, hypothecation, assignment for collateral purposes, lien (statutory or other) or similar encumbrance, and any easement, right-of-way, exclusive license, restriction, defect, exception or irregularity in title or similar charge or encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof); provided that in no event shall any operating lease or non-exclusive license with respect to any intellectual property rights entered into in the ordinary course of business or any precautionary UCC filings made pursuant thereto by an applicable lessor or lessee, be deemed to be a Lien.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of operations of the Obligor and its subsidiaries (taken as a whole), (b) the validity or enforceability of this Note, (c) the ability of the Obligor to perform its obligations under this Note, (d) the rights or remedies of the Payee hereunder or (e) the priority of any Liens granted to the Payee in or to the Collateral.
“Material Real Property” has the meaning set forth in the Indenture. 
“Maturity Date” means October 15, 2023.
“Note” means this Senior Secured Promissory Note, as amended, restated, amended and restated, supplemented or otherwise modified from time to time. 
“Person” has the meaning set forth in the Indenture. 
“Solvent” means, with respect to the Obligor and its Subsidiaries on a consolidated basis on any date of determination, that on such date (a) the fair value of the assets of the Obligor and its Subsidiaries exceeds, on a consolidated basis, the debts and liabilities, subordinated, contingent or otherwise, of the Obligor and its Subsidiaries, (b) the present fair saleable value of the property of the Obligor and its Subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability, on a consolidated basis, of the debts and other liabilities, subordinated, contingent or otherwise, of the Obligor and its Subsidiaries as such debts and other liabilities become absolute and matured, (c) the Obligor and its Subsidiaries, on a consolidated basis, are able to pay the debts and liabilities, subordinated, contingent or otherwise, of the Obligor and its Subsidiaries as such liabilities become absolute and matured and (d) the Obligor and its Subsidiaries, on a consolidated basis, are not engaged in, and are not about to engage in, business for which the Obligor and its Subsidiaries have unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that can reasonably be expected to become an actual and matured liability.

2

“Subsidiary” has the meaning set forth in the Indenture. 
(b)    The following terms used herein shall have the respective meanings set forth in the Indenture Security Agreement: “ABL Collateral”, “Collateral Accounts”, “Equipment”, “Fixtures”, “Intellectual Property”, “Investment Property”, “Material Real Property”, “Pledged Equity”, “Proceeds”, “Records”, and “Supporting Obligations”.
(c)    The following terms used herein shall have the respective meanings set forth in the Code: “Commercial Tort Claims”, “Documents”, “General Intangibles”, “Instruments” and “Letter of Credit Rights”.
2.      Interest.  From the date hereof until (but not including) the date this Note is paid in full, interest shall accrue on the outstanding principal amount of this Note at a rate per annum equal to 10.0% (the “Initial Rate”); provided that the Initial Rate shall increase by 2.0% on January 1, 2021 and on each January 1 thereafter (the then effective interest rate referred to herein as the “Rate”).  Interest payable pursuant hereto shall be calculated monthly at the end of each fiscal month on the basis of a 365/366-day year for the actual days elapsed. Accrued interest hereunder shall be payable in cash at the end of each fiscal month in arrears and when the unpaid principal amount hereof is declared due and payable. Upon the occurrence and during the continuance of an Event of Default (as defined below), the unpaid principal amount of this Note and, to the extent permitted by applicable law, any interest payments or any fees or other amounts owed hereunder, shall thereafter bear interest (including post-petition interest in any Insolvency Proceeding, whether or not allowed in such Insolvency Proceeding) payable on demand at a rate that is two percent (2.0%) per annum in excess of the Rate otherwise applicable thereto pursuant to the first sentence of this Section 2 (the “Default Rate”).  Notwithstanding any provision herein to the contrary, no interest shall accrue under this Note at a rate in excess of the highest applicable rate permitted by law.
3.      Advance.  On the terms and subject to the conditions contained in this Note, the principal amount of this Note shall be made available to the Obligor in a single drawing on the date hereof in the aggregate principal amount equal to $15,000,000 (the “Advance”). 
4.      Closing Fee. Upon the effectiveness of this Note, the Obligor shall pay the Payee a closing fee in cash equal to $525,000 (the “Closing Fee”).
5.      Conditions to Advance.  The obligation of the Payee to make the Advance hereunder is subject to the satisfaction of the following conditions precedent (the date upon which the Payee is in receipt of each of the following items, each in form and substance reasonably satisfactory to the Payee, the “Effective Date”):
(a)    Note.  The Payee shall have received this Note, duly executed and delivered by the Obligor and the Guarantors.
(b)    Closing Fee and Expenses. The Obligor shall have paid (i) the Closing Fee, which may be netted from the proceeds of the Advance and (ii) all reasonable and documented out-of-pocket expenses of the Payee (including, without limitation, the reasonable and documented fees and expenses of Fried, Frank, Harris, Shriver & Jacobson LLP). 
(c)    No Default and Representations and Warranties.  Both before and after giving effect to the Advance, (i) no Default or Event of Default shall have occurred and be continuing, and (ii) each of the representations and warranties made by the Obligor herein shall be true and correct in all material respects (to the extent not otherwise qualified by materiality) on and as of such date.
(d)    Drawdown Notice. The Payee shall have received a request for the Advance duly executed by an officer of the Obligor with disbursement instructions attached thereto.
(e)    Financing Statements. The Payee shall have received copies of proper financing statements, filed or duly prepared for filing under the Code in all jurisdictions that the Payee may deem reasonably necessary in order to perfect and protect the Liens on assets of each of the Obligor and the Guarantors created hereunder, covering the Collateral described herein.
(f)    Secretary’s Certificate. The Payee shall have received a certificate of each of the Obligor and the Guarantors certifying that there has been no change to any of the Obligor’s or Guarantors’ (A) certificate or articles of incorporation, formation or organization or (B) bylaws or operating agreements (or equivalent or comparable constitutive 

3

documents) (collectively, “Organization Documents”) since the closing of the ABL Credit Agreement and the Indenture (or otherwise attaching such changed Organization Documents).
(g)    Written Consents: The Payee shall have received true, complete and correct copies of the resolutions or written consents authorizing the borrowing by the Obligor of the Advance and the guarantees of the Guarantied Obligations provided by the Guarantors and the other transactions contemplated hereunder.
(h)    Good Standing Certificates. The Payee shall have received good standing certificates of each of the Obligor and the Guarantors, issued by the Secretary of State or other appropriate official of the jurisdiction of incorporation, organization or formation of the Obligor and such Guarantors.
(i)    Closing Certificate. The Payee shall have received a certificate executed by an officer of the Obligor certifying that the conditions specified in Section 5(c) have been satisfied.
(j)    ABL Amendment. The Obligor shall have entered into an amendment to the ABL Credit Agreement (the “ABL Amendment”).
(k)    Liquidity Condition. As of the Effective Date, pro forma for the Acquisition, the Obligor will have available liquidity equal to or greater than $40,000,000.
6.      Representations and Warranties.  To induce the Payee to make the Advance, the Obligor hereby represents and warrants to the Payee that:
(a)    Status.  Each of the Obligor and the Guarantors (a) is a duly organized or formed and validly existing corporation or other registered entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (b) has duly qualified and is authorized to do business and is in good standing in all jurisdictions where it does business or owns assets, except where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect.
(b)    Power and Authority; Enforceability.  Each of the Obligor and the Guarantors has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of this Note and each other Bridge Loan Document to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of this Note and each other Bridge Loan Document. Each of the Obligor and the Guarantors has duly executed and delivered this Note and each other Bridge Loan Document to which it is a party and this Note constitutes, and each other Bridge Loan Document to which it is a party, constitutes the legal, valid and binding obligation of each of the Obligor and the Guarantors enforceable against the Obligor and each such Guarantor in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law).
(c)    No Violation.  None of the execution, delivery and performance by the Obligor and the Guarantors of this Note and each other Bridge Loan Document to which it is a party and compliance with the terms and provisions thereof or the consummation of the other transactions contemplated hereby or thereby on the relevant dates therefor will (i) contravene any applicable provision of any material applicable law of any governmental authority, (ii) violate any provision of the organization documents of the Obligor or any Guarantor or (iii) conflict with the Indenture or, subject to the ABL Amendment, the ABL Credit Agreement.
(d)    Pari Passu Indebtedness. Obligations under this Note constitute senior indebtedness of the Obligor and rank pari passu in right of payment with all indebtedness of the Obligor under the Indenture and the ABL Credit Agreement.
(e)    Use of Proceeds. The proceeds of the Advance shall be used solely for the consideration for the Acquisition and any related fees and expenses.
(f)    Solvency. As of the date hereof, the Obligor and its subsidiaries, on a consolidated basis, are Solvent. 
7.      Payment.  The full outstanding principal amount of this Note, together with all accrued and unpaid interest hereunder, shall become due and payable on the Maturity Date.  All monies due hereunder shall be paid in 

4

Dollars. If any payment on this Note shall be due on a day which is not a Business Day, it shall be payable on the next succeeding Business Day.  Upon final payment of the full outstanding principal amount of this Note, together with all accrued and unpaid interest hereunder this Note shall be surrendered to the Obligor for cancellation.  Amounts borrowed and repaid hereunder may not be reborrowed.  All payments hereunder shall be applied to accrued and unpaid interest and to outstanding principal in such order as determined by the Payee in its sole discretion.
8.      Prepayment.  The Obligor may, at its option, prepay this Note, in whole or in part, at any time or from time to time without penalty or premium and such prepayment shall be accompanied by payment of accrued and unpaid interest through the date of prepayment. 
9.      Guarantee.  
(a)    In recognition of the direct and indirect benefits to be received by the Guarantors from the proceeds of this Note and by virtue of the financial accommodations to be made to the Obligor, each of the Guarantors, jointly and severally, hereby unconditionally and irrevocably guarantees as a primary obligor and not merely as a surety the full and prompt payment when due, whether upon maturity, acceleration, or otherwise, of all of the Guarantied Obligations. If any or all of the Guarantied Obligations becomes due and payable, each of the Guarantors, unconditionally and irrevocably, and without the need for demand, protest, or any other notice or formality, promises to pay such indebtedness to the Payee, together with any and all expenses (including the Payee’s expenses) that may be incurred by the Payee in demanding, enforcing, or collecting any of the Guarantied Obligations (including the enforcement of any collateral for such Guarantied Obligations or any collateral for the obligations of the Guarantors under the guaranty in this Note). If claim is ever made upon the Payee for repayment or recovery of any amount or amounts received in payment of or on account of any or all of the Guarantied Obligations and the Payee repays all or part of said amount by reason of (i) any judgment, decree, or order of any court or administrative body having jurisdiction over the Payee or any of its property, or (ii) any settlement or compromise of any such claim effected by the Payee with any such claimant (including the Obligor or any Guarantor), then and in each such event, each of the Guarantors agrees that any such judgment, decree, order, settlement, or compromise shall be binding upon the Guarantors, notwithstanding any revocation (or purported revocation) of this Guaranty or other instrument evidencing any liability of the Obligor or any Guarantor, and the Guarantors shall be and remain liable to the Payee hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Payee.  The liability of each of the Guarantors hereunder is primary, absolute, and unconditional, and is independent of any security for or other guaranty of the Guarantied Obligations, whether executed by any other Guarantor or by any other person, and the liability of each of the Guarantors hereunder shall not be affected or impaired by, in each case, to the fullest extent permitted by applicable law, (i) any payment on, or in reduction of, any such other guaranty or undertaking, (ii) any dissolution, termination, or increase, decrease, or change in personnel by the Obligor or any Guarantor, (iii) any payment made to the Payee on account of the obligations which the Payee repays to the Obligor or any Guarantor pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding (or any settlement or compromise of any claim made in such a proceeding relating to such payment), and each of the Guarantors waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, (iv) any action or inaction by the Payee, or (v) any invalidity, irregularity, avoidability, or unenforceability of all or any part of the obligations or of any security therefor.  The guaranty by each of the Guarantors hereunder is a guaranty of payment and not of collection. The obligations of each of the Guarantors hereunder are independent of the obligations of any other Guarantor or any other person and a separate action or actions may be brought and prosecuted against one or more of the Guarantors whether or not action is brought against any other Guarantor or any other person and whether or not any other Guarantor or any other person be joined in any such action or actions. Each Guarantor hereby confirms that it is the intention of all parties hereto that the guaranty contained herein not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law to the extent applicable to this guaranty and the obligations of each Guarantor hereunder. To effectuate the foregoing intention, the parties hereto hereby irrevocably agree that the obligations of each Guarantor hereunder at any time shall be limited to the maximum amount as will result in the obligations of such Guarantor hereunder not constituting a fraudulent transfer or conveyance.
(b)    With respect to any Subsidiary of the Obligor or any Guarantor that is not delivering a guarantee of the Guarantied Obligations on the Effective Date:
(i)    Within 30 days of the Effective Date, and in any event no later than when such entities deliver guarantees of the obligations of the Obligor under the Indenture, the Obligor will cause C&J Well Services, Inc., a Delaware corporation, KVS Transportation, Inc., a California corporation, and Indigo Injection #3, LLC, 

5

a Texas limited liability company to execute and deliver to the Payee a guaranty supplement to this Note in form and substance reasonably satisfactory to the Payee.
(ii)    If any Subsidiary of the Obligor or any Guarantor becomes obligated under or deliver any guarantee of the obligations of the Obligor under the Indenture, such Subsidiary shall grant a guarantee of all Guarantied Obligations by executing and delivering a guaranty supplement in, each case in form and substance reasonably satisfactory to the Payee.
10.      Security.  
(a)    Grant of Security.  Each of the Obligor and the Guarantors hereby unconditionally grants, assigns, and pledges to the Payee to secure the obligations under this Note, a continuing security interest in all of the Obligor’s and each such Guarantor’s right, title, and interest in and to the following, whether now owned or hereafter acquired or arising and wherever located (collectively, the “Collateral”):
(i)    all Equipment;
(ii)    all Fixtures related to Material Real Property
(iii)    all Intellectual Property;
(iv)    all Investment Property (including without limitation the Pledged Equity), all Commercial Tort Claims, all Documents, all General Intangibles, all Instruments and all Letter of Credit Rights, in each case, for the avoidance of doubt, not constituting ABL Collateral;
(v)    all Collateral Accounts;
(vi)    all Records relating to the foregoing and all additions, accessions and improvements to, all substitutions and replacements of the foregoing, and
(vii)    to the extent not otherwise included, all Proceeds of the foregoing, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;
provided, however, that notwithstanding anything to the contrary contained herein, this Note shall not constitute nor evidence a grant of a security interest, collateral assignment or any other type of Lien in Excluded Property provided further, that the Proceeds of Excluded Property shall not constitute Excluded Property solely by virtue of being Proceeds thereof but only to the extent that such Proceeds otherwise independently constitute Excluded Property hereunder.
(b)    Security for this Note. The security interest created hereby secures the payment and performance of this Note. Without limiting the generality of the foregoing, this Note secures the payment of all amounts which constitute part of the obligations owed under this Note and would be owed by the Obligor to the Payee but for the fact that they are unenforceable or not allowable (in whole or in part) as a claim in an Insolvency Proceeding involving the Obligor due to the existence of such Insolvency Proceeding.
(c)    Authorization to file UCC Statements. The Obligor hereby authorizes the Payee, its counsel or designee to file, in the name of the Obligor and each Guarantor any UCC or similar financing and continuation statements the Payee in its sole discretion may deem necessary or appropriate to further protect or maintain the perfection of the security interests.
(d)    Information Regarding Collateral. The Obligor will furnish to the Payee, with respect to the Obligor or any Guarantor, promptly (and in any event within 30 days of such change) written notice of any change in such Person’s (i) legal name, (ii) jurisdiction of organization or formation, (iii) type of legal entity or (iv) organizational identification number. The Obligor also agrees promptly to notify in writing the Payee if any material portion of the Collateral is damaged, destroyed or condemned.

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(e)    Maintenance of Insurance.
(i)    The Obligor and the Guarantors will maintain insurance with respect to the Collateral, covering casualty, hazard, theft, malicious mischief, flood and other risks, with insurers, in such amounts, and with such coverages and deductibles as are at the time of placing such insurance customary for companies similarly situated and which are available at commercially reasonable rates. From time to time upon request, the Obligor shall deliver to the Payee the originals or certified copies of its insurance policies.
(ii)    In addition to the insurance required under clause (i) with respect to Collateral, maintain insurance with insurers, with respect to the properties and business of the Obligor and the Guarantors, of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and deductibles as are at the time of placing such insurance customary for companies similarly situated and which are available at commercially reasonable rates.
11.      Covenants.  
(a)    Taxes. The Obligor and each Guarantor shall make all payments, whether on account of principal, interest, fees or otherwise, free of and without deduction or withholding for any present or future taxes, duties or other charges (“Taxes”). If the Obligor or a Guarantor is compelled by law to deduct or withhold any Taxes it shall promptly pay to the Payee such additional amount as is necessary to ensure that the net amount received by the Payee is equal to the amount payable by the Obligor or such Guarantor had there been no deduction or withholding
(b)    Corporate Existence. The Obligor shall do or cause to be done all things necessary to preserve and keep in full force and effect its and its Subsidiaries’ existence, rights (charter and statutory), licenses and franchises; provided, however, that the Obligor shall not be required to preserve any such Subsidiaries’ right, license or franchise if it shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Obligor and its Subsidiaries, taken as a whole.
12.      Events of Default. 
(a)    The occurrence of any one or more of the following events shall constitute an Event of Default (an “Event of Default”) under this Note:  (i) the failure to pay principal of this Note when due on the Maturity Date or failure to pay interest payable hereunder within (five) 5 Business Days after the same becomes due; provided, that, notwithstanding anything to the contrary contained herein, to the extent the Obligor is not permitted to make a payment under this Note under the terms of the ABL Credit Agreement, failure to make such payment shall not result in an Event of Default hereunder so long as the Obligor makes such payment once permitted under the ABL Credit Agreement; (ii) any representation or warranty made by the Obligor herein shall prove to not have been accurate in all material respects on or as of the date made or deemed made or furnished; (iii) the Obligor or any of its subsidiaries shall: (A) apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the assets or other property of any such person, or make a general assignment for the benefit of creditors; (B) in the absence of such application, consent or acquiesce to or permit or suffer to exist, the appointment of a trustee, receiver, sequestrator or other custodian for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within sixty (60) days; provided that the Obligor hereby expressly authorizes the Payee to appear in any court conducting any relevant proceeding during such sixty (60) day period to preserve, protect and defend their rights under this Note; or (C) permit or suffer to exist the commencement of any Insolvency Proceeding relating to the Obligor or any of its subsidiaries, or its or their debts or assets, whether voluntary or involuntary, or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by such person, such case or proceeding shall be consented to or acquiesced in by such person, or shall result in the entry of an order for relief or shall remain for sixty (60) days undismissed; provided the Obligor hereby expressly authorizes the Payee to appear in any court conducting any such case or proceeding during such sixty (60) day period to preserve, protect and defend their rights under this Note; (iv) any failure by the Obligor to perform, or comply with, any material term or condition contained in this Note, and any written repudiation or assertion of the invalidity of the Liens or guarantee granted herein; (v) a default shall occur in the payment of any amount when due (subject to any applicable grace period), whether by acceleration or otherwise, of any principal or stated amount of, or interest or fees on, the indebtedness incurred under the Indenture, or a default shall occur in the performance or observance of any obligation or condition with respect to any such indebtedness if the effect of such default is to accelerate, or permit the holders of such indebtedness to accelerate, the maturity of such indebtedness to cause or declare such indebtedness to become immediately due and payable; (vi) a default shall 

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occur in the payment of any amount when due (subject to any applicable grace period), whether by acceleration or otherwise, of any principal or stated amount of, or interest or fees on, the indebtedness incurred under the ABL Credit Agreement, or a default shall occur in the performance or observance of any obligation or condition with respect to any such indebtedness if the effect of such default is to accelerate the maturity of such indebtedness to cause or declare such indebtedness to become immediately due and payable; and (vi) any Change of Control (as defined in the Indenture) shall have occurred whereupon Holders (as defined in the Indenture) shall have exercised their right to require the Obligor to make a Change of Control Offer pursuant to Section 3.9 of the Indenture.
(b)    The Obligor hereby agrees that upon an Event of Default under this Note, the unpaid principal balance of and accrued but unpaid interest on this Note shall immediately become due and payable upon written notice by the Payee to the Obligor; provided, however, that upon the occurrence of an Event of Default described in clause 12(a)(iii) above the unpaid balance and accrued but unpaid interest shall become due and payable without notice or demand.  The Payee shall have all other rights and remedies available at law or in equity, under the Code or pursuant to this Note.
13.      Assignment.  Without the prior written consent of the Obligor, the Payee shall not have the right at any time to sell, assign, transfer, negotiate or pledge, all or any part of its interest in this Note (and any attempted assignment or transfer by the Payee without such consent shall be null and void).  The Obligor’s rights or obligations hereunder nor any interest therein may be assigned or delegated by the Obligor without the prior written consent of the Payee (and any attempted assignment or transfer by the Obligor without such consent shall be null and void).  This Note may be transferred only upon surrender of the original Note to the Obligor for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Obligor, and, thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee.  It is the intention that this Note be treated as a registered obligation and in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
14.      No Waiver by Payee.  No delay or omission by the Payee or any other holder hereof to exercise any power, right or remedy accruing to the Payee or any other holder hereof shall impair any such power, right or remedy or shall be construed to be a waiver of the right to exercise any such power, right or remedy.  Payee’s right to accelerate this Note for any late payment or the Obligor’s failure to timely fulfill its other obligations hereunder shall not be waived or deemed waived by the Payee by Payee’s having accepted a late payment or late payments in the past or the Payee otherwise not accelerating this Note or exercising other remedies for the Obligor’s failure to timely perform its obligations hereunder.  The Payee shall not be obligated or be deemed obligated to notify the Obligor that it is requiring the Obligor to strictly comply with the terms and provisions of this Note before accelerating this Note and exercising its other remedies hereunder because of the Obligor’s failure to timely perform its obligations under this Note.
15.      Obligor Waiver; Indemnity; Expense Reimbursement.  
(a)    The Obligor hereby forever waives (i) presentment, presentment for payment, demand, notices of nonperformance, protest, notice of protest, notice of dishonor of this Note and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, (ii) any requirement of diligence or promptness on the part of the Payee in the enforcement of its rights under the provisions of this Note or any other Bridge Loan Document and (iii) any and all notices of every kind and description which may be required to be given by any statute or rule of law.  
(b)    The Obligor will indemnify the Payee and the directors, officers, employees, advisors and agents thereof and each Person, if any, who controls the Payee (any of the foregoing, an “Indemnified Person”) and hold each Indemnified Person harmless from and against any and all claims, damages, liabilities and expenses (including, without limitation, all reasonable and documented out-of-pocket fees and disbursements of a single firm of counsel to all Indemnified Persons and, if necessary, one firm of local counsel in each appropriate jurisdiction and one firm of special counsel in each appropriate specialty which an Indemnified Person may incur or which may be asserted against it in connection with any claim, litigation, investigation or proceeding (whether or not such Indemnified Person is a party to such litigation or investigation)) involving this Note and the other Bridge Loan Documents, the use of any proceeds of the Advance by the Obligor or any Subsidiary or any officer, director or employee thereof (all such claims, damages, liabilities and expenses, “Indemnified Liabilities”), provided that the Obligor shall have no obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities to the extent such Indemnified Liabilities resulted from the gross negligence, bad faith or willful misconduct of such Indemnified Person, in each case, as determined by a final, non-appealable judgment of a court of competent jurisdiction.  No Indemnified Person shall be 

8

liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages in connection with this Agreement.  The agreements in this Section 15(b) shall survive repayment of the Advance and all other amounts payable hereunder.
(c)    The Obligor shall pay (a) all reasonable out of pocket fees and expenses incurred by the Payee (including, but not limited to, (i) the reasonable fees, disbursements and other charges of one primary counsel for the Payee and, to the extent necessary, of one special counsel retained by the Payee in each relevant specialty and of one local counsel retained by the Payee in each relevant jurisdiction and (ii) due diligence expenses) incurred in connection with the preparation, negotiation, execution, delivery and administration of this Note, any amendments, modifications or waivers of the provisions hereof or thereof and any other related document, in each case executed by an officer of the Obligor and delivered to the Payee in accordance with the terms of this Note (collectively, the “Bridge Loan Documents”) (whether or not the transactions contemplated hereby or thereby shall be consummated) and (b) all out of pocket expenses incurred by the Payee (including the fees, charges and disbursements of any counsel for the Payee) in connection with the enforcement or protection of its rights in connection with this Note and the other Bridge Loan Documents, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of the Note.
16.      Section Headings.  Section headings appearing in this Note are for convenient reference only and shall not be used to interpret or limit the meaning of any provision of this Note. 
17.      GOVERNING LAW. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 
18.      VENUE.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE OBLIGOR OR THE PAYEE ARISING OUT OF OR RELATING HERETO SHALL BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, BOROUGH OF MANHATTAN OR, IF THAT COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF THE OBLIGOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESS PROVIDED NEXT TO ITS NAME ON SCHEDULE IV; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE OBLIGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES THAT THE PAYEE RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST THE OBLIGOR IN THE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT THAT THE COURTS SPECIFIED ABOVE DO NOT HAVE SUBJECT MATTER JURISDICTION. 
19.      WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS NOTE OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS NOTE, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 19 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE ADVANCE MADE 

9

HEREUNDER.  IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
20.      Successors and Assigns.  This Note and all the covenants and agreements contained herein shall be binding upon, and shall inure to the benefit of, the respective legal representatives, heirs, successors and permitted assigns of the Obligor and the Payee. 
21.      Records of Payments.  The records of the Payee shall be prima facie evidence of the amounts owing on this Note.
22.      Amendments and Waivers. No term of this Note may be waived, modified or amended except by an instrument in writing signed by all parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
23.      Severability.  In the event any one or more of the provisions contained in this Note should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.  Each waiver in this Note is subject to the overriding and controlling rule that it shall be effective only if and to the extent that (a) it is not prohibited by applicable law and (b) applicable law neither provides for nor allows any material sanctions to be imposed against the Payee for having bargained for and obtained it. 
24.      Notices.  Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering it against receipt for it, by depositing it with an overnight delivery service or by depositing it in a receptacle maintained by the United States Postal Service, postage prepaid, registered or certified mail, return receipt requested, addressed to the respective parties pursuant to the notice information on the signature pages hereto.  All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number or electronic mail address.  The Obligor’s address for notices may be changed at any time and from time to time, but only after five (5) calendar days advance written notice to the Payee and shall be the most recent such address furnished in writing by the Obligor to the Payee.  The Payee’s address for notices may be changed at any time and from time to time, but only after five (5) calendar days advance written notice to the Obligor and shall be the most recent such address furnished in writing by the Payee to the Obligor.  Actual notice, however and from whomever given or received, shall always be effective when received.
25.      ENTIRE AGREEMENT.  THIS NOTE TOGETHER WITH EACH OTHER BRIDGE LOAN DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PAYEE, THE OBLIGOR, THE GUARANTORS AND OTHER PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR CONFLICTING OR INCONSISTENT AGREEMENTS, CONSENTS AND UNDERSTANDINGS RELATING TO SUCH SUBJECT MATTER.  EACH OF THE OBLIGOR AND THE GUARANTORS ACKNOWLEDGES AND AGREES THAT THERE IS NO ORAL AGREEMENT BETWEEN THE OBLIGOR, THE GUARANTORS AND THE PAYEE WHICH HAS NOT BEEN INCORPORATED IN THIS NOTE OR A BRIDGE LOAN DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH.
 [SIGNATURES FOLLOW]
    

10

    
IN WITNESS WHEREOF, the undersigned have executed this Note as of the date first written above. 
	
		
	OBLIGOR:
	BASIC ENERGY SERVICES, INC. 

	 
	 

	By:
	/s/ Keith L. Schilling

	Name: 
	Keith L. Schilling

	Title:
	President and Chief Executive Officer

	 
	 

	 
	Notice Information:

	 
	Basic Energy Services, Inc.

	 
	81 Cherry Street Suite 2100

	 
	Fort Worth, TX 76102

	 
	Attention: Keith L. Schilling

	 
	Email: Keith.Schilling@basicenergyservices.com

	 
	 

	GUARANTORS:

Basic Energy Services GP, LLC
Basic Energy Services LP, LLC
Basic Energy Services, L.P.
Basic ESA, Inc.
SCH Disposal, L.L.C.
Taylor Industries, LLC
AGUA LIBRE HOLDCO LLC
AGUA LIBRE ASSET CO LLC
AGUA LIBRE MIDSTREAM LLC

	 
	 

	By:
	/s/ Keith L. Schilling

	Name: 
	Keith L. Schilling

	Title:
	President and Chief Executive Officer

	 
	 

	 
	BASIC ENERGY SERVICES, L.P. 

	By:
	Basic Energy Services GP, LLC, its general partner

	 
	 

	By:
	/s/ Keith L. Schilling

	Name: 
	Keith L. Schilling

	Title:
	President and Chief Executive Officer

	 
	 

Acknowledged and Agreed By:
ASCRIBE III INVESTMENTS LLC

	
		
	By:
	/s/ Lawrence First

	Name:
	Lawrence First

	Title:
	Managing Director

Notice Information: 
	
	
	Ascribe III Investments LLC

	299 Park Avenue, 34th Floor

	New York, NY 10171

	Attention: Lawrence First

	Email: lfirst@ascribecapital.com

with a copy to (which shall not constitute notice) 
	
	
	Fried, Frank, Harris, Shriver & Jacobson LLP

	One New York Plaza

	New York, New York 10004

	Attention:  Warren S. de Wied

	Email:  warren.de.wied@friedfrank.com

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