Document:

exv10w4

Exhibit 10.4

BB&T EQUIPMENT FINANCE CORPORATION

MASTER OPERATING LEASE AGREEMENT

     THIS MASTER OPERATING LEASE AGREEMENT (this “Lease”) is made as of July 14,
2010, between BB&T EQUIPMENT FINANCE CORPORATION, its successors and assigns (“Lessor”), and C&J
SPEC-RENT SERVICES, INC. and C&J ENERGY SERVICES, INC., their successors and permitted assigns,
jointly and severally (collectively “Lessee”).

     Lessee desires to lease from Lessor the equipment and other property (the “Equipment”)
described in each Equipment Schedule executed pursuant to this Lease
(each, a “Schedule”) incorporating by reference the terms and conditions of this Lease (the term “Lease” shall also
include any Riders to this Lease entered into with respect to such Schedule). Certain definitions
and construction of certain of the terms used in this Lease are provided in Section 19 hereof.

          For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Lease agree as follows:

1. AGREEMENT TO LEASE; TERM. This Lease is effective as of, the date specified above. By entering
into a Schedule, Lessor leases the Equipment described therein to Lessee, and Lessee leases such
Equipment from Lessor, in each case, subject to the terms and conditions in this Lease and such
Schedule and all of the other documents and agreements executed in connection herewith
(collectively, the “Lease Documents”). Each Schedule, incorporating the terms and conditions of
this Lease, will constitute a separate instrument of lease. The term of lease with respect to each
item of Equipment leased under a Schedule shall commence on the date of execution of such Schedule
and continue for the term provided in that Schedule.

2. RENT. Lessee shall pay Lessor (a) the rental installments (“Basic Rent”) as and when specified
in each Schedule, without demand, and (b) all of the other amounts payable in accordance with this
Lease, such Schedule and/or any of the other Lease Documents (“Other Payments”, and together with
the Basic Rent, collectively, the “Rent”). Upon Lessee’s execution thereof, except as expressly
stated in the Lease Documents the related Schedule shall constitute a non-cancelable net lease,
and Lessee’s obligation to pay Rent, and otherwise to perform its obligations under or with
respect to such Schedule and all of the other Lease Documents, are and shall be absolute and
unconditional and shall not be affected by any circumstances whatsoever, including any right of
setoff, counterclaim, recoupment, deduction, defense or other right which Lessee may have against
Lessor, the manufacturer or vendor of the Equipment (the
“Suppliers”), or anyone else, for any
reason whatsoever (each, an “Abatement”). Lessee agrees that all Rent shall be paid in accordance
with Lessor’s or Assignee’s written direction. Time is of the essence. If any Rent is not paid
within five (5) days of the due date, Lessee shall pay a late charge equal to five (5) percent of
the amount in arrears.

3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE. Lessee represents, warrants and agrees
that, as of the effective date of this Lease and of each Schedule: (a) Lessee has the form of
business organization indicated, and is and will remain duly organized and existing in good
standing under the laws of the state specified, under Lessee’s signature and is duly qualified to
do business wherever necessary to perform its obligations under the Lease Documents, including each
jurisdiction in which the Equipment is or will be located. Lessee’s legal name is as shown in the
preamble of this Lease; and Lessee’s Federal Employer Identification Number and organizational
number are as set forth under Lessee’s signature. Except as has been disclosed to Lessor in
writing, within the previous six (6) years, Lessee has not changed its name, done business under
any other name, or merged or been the surviving entity of any merger, except as disclosed to Lessor
in writing. (b) The Lease Documents (1) have been duly authorized by all necessary action
consistent with Lessee’s form of organization, (2) do not require the approval of, or giving notice
to, any governmental authority, (3) do not contravene or constitute a default under any applicable
law, Lessee’s organizational documents, or any agreement, indenture, or other instrument to which
Lessee is a party or by which it may be bound, and (4) constitute legal, valid and binding
obligations of Lessee enforceable against Lessee, in accordance with the terms thereof. (c) There
are no pending actions or proceedings to which Lessee is a party, and there are no other pending or
threatened actions or proceedings of which Lessee has knowledge, before any court, arbitrator or
administrative agency, which, either individually or in the aggregate, would have a Material
Adverse Effect. As used herein, “Material Adverse Effect” shall mean (i) a materially adverse
effect on the business, condition (financial or otherwise), operations, performance or properties
of Lessee which materially impairs Lessee’s ability to pay its debts as they come due, or on
Lessor’s rights and remedies under this Lease,

 

 

or (ii) a material impairment of the ability of Lessee to perform its obligations under or remain
in compliance with such Schedule or any of the other Lease Documents. Further, Lessee is not in
default under any financial or other material agreement that, either individually, or in the
aggregate, would have a Material Adverse Effect. (d) All of the Equipment covered by such Schedule
is located solely in the jurisdiction(s) specified in such Schedule. (e) Under the applicable laws
of each such jurisdiction, such Equipment consists (and shall continue to consist) solely of
personal property and not fixtures. Such Equipment is removable from and is not essential to the
premises at which it is located. (f) The financial statements of Lessee (copies of which have been
furnished to Lessor) have been prepared in accordance with generally accepted accounting
principles consistently applied (“GAAP”), and fairly present Lessee’s financial condition and the
results of its operations as of the date of and for the period covered by such statements, and
since the date of such statements there has been no change which would have a Material Adverse
Effect on such conditions or operations. (g) With respect to any Collateral, Lessee has good title
to, rights in, and/or power to transfer all of the same. (h) The Supplier is not an affiliate of
Lessee. (i) The Supply Contract (as such term is hereinafter defined) represents an arms’ length
transaction and the purchase price for the Equipment specified therein is the amount obtainable in
an arms’ length transaction between a willing and informed buyer and a willing and informed seller
under no compulsion to sell.

4. FURTHER ASSURANCES AND OTHER COVENANTS. Lessee agrees as follows: (a) Lessee will furnish
Lessor with (1) Lessee’s balance sheet, statement of income and statement of retained earnings,
prepared in accordance with GAAP, audited by a recognized firm of certified public accountants,
within one hundred twenty (120) days of the close of each fiscal year of Lessee, (2) Lessee’s
quarterly financial report certified by the chief financial officer of Lessee, within sixty (60)
days of the close of each fiscal quarter of Lessee, and (3) all of Lessee’s Forms 10-K and 10-Q,
if any, filed with the Securities and Exchange Commission (“SEC”) as and when filed (by furnishing
these SEC forms, or making them publicly available in electronic form, in each case, within the
time periods set forth in clauses (1) and (2), Lessee shall be deemed to have satisfied the
requirements of clauses (1), (2) and (3)). (b) Lessee shall obtain and deliver to Lessor and/or
promptly execute or otherwise authenticate any documents, filings, waivers (including any landlord
and mortgagee waivers), releases and other records, and will take such further action as Lessor
may reasonably request in furtherance of Lessor’s rights under any of the Lease Documents
(provided, however, that Lessee will not be required to provide any opinions from legal counsel or
take other action which would result in substantial cost to Lessee). Lessee irrevocably authorizes
Lessor to file UCC financing statements (“UCCs”), and other filings with respect to the Equipment
or any Collateral. Without Lessor’s prior written consent, Lessee agrees not to file any
corrective or termination statements or partial releases with respect to any UCCs filed by Lessor
pursuant to this Lease. (c) Lessee shall provide written notice to Lessor: (1) thirty (30) days
prior to any change in Lessee’s name or jurisdiction or form of organization; (2) promptly upon
the occurrence of any Event of Default (as defined in Section 15) or event which, with the lapse
of time or the giving of notice, or both, would become an Event of Default (a “Default”); and (3)
promptly upon Lessee becoming aware of any alleged violation of applicable law relating to the
Equipment or this Lease. (d) Lessee has been advised by Lessor that the USA Patriot Act
establishes minimum standards of account information to be collected and maintained by Lessor, and
that to help the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify and record information that
identifies each person who opens an account; and specifically, this means that when Lessee
executes this Lease, Lessor may ask for Lessee’s name and address, the date of birth of the
officers executing this Lease, and other information that will allow Lessor to identify Lessee;
and that Lessor may also ask to see the driver’s license or other identifying documents of the
officers of Lessee executing this Lease. (e) Lessee is and will remain in full compliance with all
applicable laws including, without limitation, (i) ensuring that no person who owns a controlling
interest in or otherwise controls Lessee is or shall be (A) listed on the Specially Designated
Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”),
Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation, or (B) a person designated under Sections
1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling
legislation or any other similar Executive Orders, and (ii) compliance with all applicable Bank
Secrecy Act (“BSA”) laws, regulations and government guidance on BSA compliance and on the
prevention and detection of money laundering violations.

5. CONDITIONS PRECEDENT. Lessor’s agreement to purchase and lease any Equipment under a Schedule,
is conditioned upon Lessor’s determination that all of the following have been satisfied: (a)
Lessor having received the following, in form and substance reasonably satisfactory to Lessor: (1)
evidence as to due compliance with the insurance provisions of Section 11; (2) if requested, lien
searches in the jurisdiction of Lessee’s organization, and wherever else Lessor deems appropriate;
(3) UCCs, real property waivers and all other filings required by Lessor; (4) a certificate of an
appropriate officer of Lessee certifying: (A) resolutions duly authorizing the transactions
contemplated in the applicable Lease Documents, and (B) the incumbency and signature of the
officers of Lessee authorized to execute such documents; (5) the only manually executed original of
the Schedule, and counterpart originals of all other Lease Documents; (6) all purchase documents
pertaining to the Equipment (collectively, the “Supply Contract”); (7) if requested by Lessor, good
standing certificates from the jurisdiction of Lessee’s organization and the location of the
Equipment, and evidence of Lessee’s organizational number; and (8) such other documents,
agreements, instruments, certificates and

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assurances (other than legal opinions), as Lessor reasonably may require consistent with the terms
and conditions of the Lease Documents. (b) All representations and warranties provided by Lessee
in favor of Lessor in any of the Lease Documents shall be true and correct in all material
respects on the effective date of the related Schedule (Lessee’s execution and delivery of the
Schedule shall constitute Lessee’s acknowledgment of the same). (c) There shall be no Default or
Event of Default under the Schedule or any other Lease Documents. (d) The Equipment shall have
been delivered to and accepted by Lessee, as evidenced by the Schedule, and shall be in the
condition and repair required hereby; and on the effective date of such Schedule Lessor shall have
received good title to the Equipment described therein, free and clear of any claims, liens,
attachments, rights of others and legal processes (“Liens”). (e) No event shall have occurred
which would have a Material Adverse Effect with respect to Lessee.

6. ACCEPTANCE UNDER LEASE. Upon delivery, Lessee shall inspect and, if conforming to the condition
required by the applicable Supply Contract, accept the Equipment and execute and deliver to Lessor
a Schedule describing such Equipment. The Schedule will evidence Lessee’s unconditional and
irrevocable acceptance under the Schedule of the Equipment described therein. However, if Lessee
fails to accept delivery of any item of the Equipment, or accepts such Equipment but fails to
satisfy any or all of the other conditions set forth in Section 5, Lessor shall have no obligation
to purchase or lease such Equipment. Lessor will cooperate with Lessee (at Lessee’s expense) to
assign to Lessee all of Lessor’s rights with respect to such equipment. In such event, Lessor’s
rights shall include, among other things, the right to demand that Lessee (a) fully assume all
obligations as purchaser of the Equipment, with the effect of causing Lessor to be released from
any liability relating thereto, (b) immediately remit to Lessor an amount sufficient to reimburse
it for all advance payments, costs, taxes or other charges paid or incurred with respect to the
Equipment (including any of such amounts paid by Lessor to Supplier under the Supply Contract or
as a reimbursement to Lessee), together with interest at the Default Rate accruing from the date
or dates such amounts were paid by Lessor until indefeasibly repaid by Lessee in full, and (c)
take all other actions necessary to accomplish such assumption.

7. USE AND MAINTENANCE. (a) Lessee shall (1) use the Equipment solely in the continental United
States and in the conduct of its business, for the purpose for which the Equipment was designed, in
a careful and proper manner, and shall not permanently discontinue use of the Equipment; (2)
operate, maintain, service and repair the Equipment, and maintain all records and other materials
relating thereto, (A) in accordance and consistent with (i) the Supplier’s recommendations and all
maintenance and operating manuals or service agreements, whenever furnished or entered into,
including any subsequent amendments or replacements thereof, issued by the Supplier or service
provider, (ii) the requirements of all applicable insurance policies, (iii) the Supply Contract, so
as to preserve all of Lessee’s and Lessor’s rights thereunder, including all rights to any
warranties, indemnities or other rights or remedies, (iv) all applicable laws, and (v) the prudent
practice of other similar companies in the same business as Lessee, but in any event, to no lesser
standard than that employed by Lessee for comparable equipment owned or leased by it; and (B)
without limiting the foregoing, so as to cause the Equipment to be in good repair and operating
condition and in at least the same condition as when delivered to Lessee hereunder, except for
ordinary wear and tear resulting despite Lessee’s full compliance with the terms hereof; (3)
provide written notice to Lessor not less than thirty (30) days after any change of the location of
any Equipment (or the location of the principal garage of any Equipment, to the extent that such
Equipment is mobile equipment) as specified in the Schedule; and (4) not attach or incorporate the
Equipment to or in any other property in such a manner that the Equipment may be deemed to have
become an accession to or a part of such other property. (b) Within a reasonable time, Lessee will
replace any parts of the Equipment which become worn out, lost, destroyed, damaged beyond repair or
otherwise unfit for use, by new or reconditioned replacement parts which are free and clear of all
Liens and have a value, utility and remaining useful life at least equal to the parts replaced
(assuming that they were in the condition required by this Lease). Any modification or addition to
the Equipment that is required by this Lease shall be made by Lessee. Title to all such parts,
modifications and additions to the Equipment immediately shall vest in Lessor, without any further
action by Lessor or any other person, and they shall be deemed incorporated in the Equipment for
all purposes of the related Schedule. Unless replaced in accordance with this Section, Lessee shall
not remove any parts originally or from time to time attached to the Equipment, if such parts are
essential to the operation of the Equipment, are required by any other provision of this Lease or
cannot be detached from the Equipment without materially interfering with the operation of the
Equipment or adversely affecting the value, utility and remaining useful life which the Equipment
would have had without the addition of such parts. Except as permitted in this Section, Lessee
shall not make any material alterations to the Equipment. (c) Upon forty-eight (48) hours’ notice,
Lessee shall afford Lessor and/or its designated representatives access to the premises where the
Equipment is located for the purpose of inspecting such Equipment and all applicable maintenance or
other records relating thereto at any reasonable time during normal business hours; provided,
however, if a Default or Event of Default shall have occurred and then be continuing, no notice of
any inspection by Lessor shall be required. If any discrepancies are found as they pertain to the
general condition of the Equipment, Lessor will communicate these discrepancies to Lessee in
writing. Lessee shall then have thirty (30) days to rectify these discrepancies at its sole
expense. Lessee shall pay all expenses of a re-inspection by Lessor’s appointed representative, if
corrective measures were required.

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8. DISCLAIMER; QUIET ENJOYMENT. (a) THE EQUIPMENT IS LEASED HEREUNDER “AS IS, WHERE IS”. LESSOR
SHALL NOT BE DEEMED TO HAVE MADE, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, AS TO THE EQUIPMENT, INCLUDING ANY PART, OR ANY MATTER WHATSOEVER, INCLUDING,
AS TO EACH ITEM OF EQUIPMENT, ITS DESIGN, CONDITION, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE, TITLE, ABSENCE OF ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR LATENT DEFECT
(WHETHER OR NOT DISCOVERABLE BY LESSEE), COMPLIANCE OF SUCH ITEM WITH ANY APPLICABLE LAW,
CONFORMITY OF SUCH ITEM TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE DOCUMENT OR TO THE
DESCRIPTION SET FORTH IN THE RELATED SCHEDULE OR ANY OF THE OTHER LEASE DOCUMENTS, OR ANY
INTERFERENCE OR INFRINGEMENT (EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8(b)), OR ARISING FROM ANY
COURSE OF DEALING OR USAGE OF TRADE, NOR SHALL LESSOR BE LIABLE, FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY IN TORT; AND LESSEE HEREBY
WAIVES ANY CLAIMS ARISING OUT OF ANY OF THE FOREGOING. Without limiting the foregoing, Lessor will
not be responsible to Lessee or any other person with respect to, and Lessee agrees to bear sole
responsibility for, any risk or other matter that is the subject of Lessor’s disclaimer; and
Lessor’s agreement to enter into this Lease and any Schedule is in reliance upon the freedom from
and complete negation of liability or responsibility for the matters so waived or disclaimed
herein or covered by the indemnity in this Lease. So long as no Event of Default has occurred,
Lessee may exercise Lessor’s rights, if any, under any warranty, guaranty, indemnity or similar
obligation from the Supplier with respect to the Equipment; and Lessor, at Lessee’s expense, will
execute such documents as Lessee may reasonably request with respect to or in connection with any
such enforcement with respect to the Equipment. Lessee’s exercise of such rights shall be at its
sole risk, shall not result in any prejudice to Lessor, and may be exercised only during the term
of the related Schedule. Lessee shall not attempt to enforce any such warranty, guaranty,
indemnity or similar obligation from the Supplier with respect to the Equipment by legal
proceeding without Lessor’s prior written approval (which approval shall not unreasonably be
withheld or delayed), (b) Lessor warrants that during the term of each Schedule, so long as no
Event of Default has occurred, Lessee’s possession and use of the Equipment leased thereunder
shall not be interfered with by Lessor or anyone rightfully claiming an interest through Lessor.
The preceding warranty is in lieu of all other warranties by Lessor, whether written, oral or
implied, with respect to this Lease or the Equipment. Any actual or purported breach of this
warranty shall not give rise to any Abatement, but Lessee may bring a direct cause of action
against Lessor for any actual damages directly resulting from any such breach. NEITHER LESSOR NOR
LESSEE SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES IN
CONNECTION HEREWITH (EXCEPT AS AND TO THE EXTENT AWARDED AS PART OF THE DAMAGES CONSTITUTING A
CLAIM WITHIN THE SCOPE OF SECTION 14(b) HEREOF).

9. FEES AND TAXES. Lessee agrees to: (a) (1) if permitted by law, file in Lessee’s own name or on
Lessor’s behalf, directly with all appropriate taxing authorities all declarations, returns,
inventories and other documentation with respect to any personal property taxes (or any other
taxes in the nature of or imposed in lieu of property taxes) due or to become due with respect to
the Equipment, and if not so permitted by law, to promptly notify Lessor and provide it with all
information required in order for Lessor to timely file all such declarations, returns,
inventories, or other documentation, and (2) pay on or before the date when due all such taxes
assessed, billed or otherwise payable with respect to the Equipment directly to the appropriate
taxing authorities; (b) (1) pay before past due as requested by Lessor, and (2) defend and
indemnify Lessor on a net after-tax basis against liability for all license and/or registration
fees, assessments, and sales, use, property, excise, value added and other similar taxes or other
charges or fees now or hereafter imposed by any governmental body or agency upon the Equipment or
with respect to the manufacture, shipment, purchase, ownership, delivery, installation, leasing,
operation, possession, use, return, or other disposition thereof or the Rent hereunder (other than
taxes on or measured solely by the net income of Lessor (except as and to the extent expressly
addressed in Section 14(b) hereof), franchise taxes, taxes based on Lessor’s authority to do
business in a particular jurisdiction, and similar taxes); and (c) indemnify Lessor against any
penalties, charges, interest or costs imposed with respect to any items referred to in clauses (a)
and (b) above (the items referred to in clauses (a), (b), and (c) above being referred to herein
as “Impositions”). Any Impositions which are not paid before past due and which are paid by Lessor
shall, at Lessor’s option, become immediately due from Lessee to Lessor.

10. TITLE; GRANTING CLAUSE. (a) Lessee and Lessor intend that: (1) each Schedule, incorporating by
reference the terms of this Lease, constitutes a true “lease” and a “finance lease” as such terms
are defined in Article 2A and not a sale or retention of a security interest; and (2) Lessor is and
shall remain the owner of each item of Equipment (unless sold by Lessor pursuant to any Lease
Document), and Lessee shall not acquire any right, title or interest in or to such Equipment except
the right to use it in accordance with the terms of the related Schedule, (b) In order to secure
the prompt payment of the Rent and all of the other amounts from time to time outstanding with
respect hereto and to each Schedule, and the performance and observance by Lessee of all of the
provisions hereof and thereof and of all of the other Lease Documents, Lessee hereby collaterally
assigns, grants, and conveys to Lessor, a security interest in and lien on all of Lessee’s right,
title and interest in and to all of the following (whether now existing or hereafter created, and
including any other collateral described on any rider hereto; the “Collateral”): (1) (if contrary
to the parties’ intentions a court determines

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that such Schedule is not a true “lease” under the UCC) the Equipment described in such Schedule
or otherwise covered thereby (including all inventory, fixtures or other property comprising the
Equipment), together with all related software (embedded therein or otherwise) and general
intangibles, all additions, attachments, accessories and accessions thereto whether or not
furnished by the Supplier; (2) all subleases and payments becoming due thereunder, chattel paper,
security deposits, and general intangibles relating thereto, and any and all substitutions,
replacements or exchanges for any such item of Equipment or other collateral, in each such case in
which Lessee shall from time to time acquire an interest; and (3) any and all insurance and/or
other proceeds of the property and other collateral in and against which a security interest is
granted hereunder. The collateral assignment, security interest and lien granted herein shall
survive the termination, cancellation or expiration of each Schedule until such time as Lessee’s
obligations thereunder and under the other Lease Documents are fully and indefeasibly discharged.
(c) If contrary to the parties’ intentions a court determines that any Schedule is not a true
“lease”, the parties agree that in such event Lessee agrees that: (1) with respect to the
Equipment, in addition to all of the other rights and remedies available to Lessor hereunder upon
the occurrence of an Event of Default, Lessor shall have all of the rights and remedies of a first
priority secured party under the UCC; and (2) any obligation to pay Basic Rent or any Other
Payment, to the extent constituting the payment of interest, shall be at an interest rate that is
equal to the lesser of the maximum lawful rate permitted by applicable law or the effective
interest rate used by Lessor in calculating such amounts.

11. INSURANCE. Upon acceptance under a Schedule, until the Equipment is returned to Lessor in
accordance with this Lease, Lessee shall maintain all-risk insurance coverage with respect to the
Equipment insuring against, among other things: (a) any casualty to the Equipment (or any portion
thereof), including loss or damage due to fire and the risks normally included in extended
coverage, malicious mischief and vandalism, for not less than the full replacement value of the
Equipment; and (b) any commercial liability arising in connection with the Equipment, including
both bodily injury and property damage with a combined single limit per occurrence of not less
than the amount specified in the Schedule; having a deductible as specified in the applicable
Schedule or (if not so specified) then as reasonably satisfactory to Lessor. The required
insurance policies (including endorsements) shall (i) be in form and amount reasonably
satisfactory to Lessor, and written by insurers of recognized reputation and responsibility
satisfactory to Lessor (but such insurer shall carry a current rating by A.M. Best Company of at
least “A” for a general policyholder and a financial rating of at least “VIII”), (ii) be endorsed
to name Lessor as an additional insured (but without responsibility for premiums), (iii) provide
that any amount payable under the required casualty coverage shall be paid directly to Lessor as
sole loss payee, and (iv) provide for thirty (30) days’ written notice by such insurer of
cancellation, material change, or non-renewal.

12. LOSS AND DAMAGE. (a) At all times until the Equipment is returned to Lessor in accordance with
this Lease, Lessee shall bear the risk of loss, theft, confiscation, taking, unavailability, damage
or partial destruction of the Equipment and shall not be released from its obligations under any
Schedule or other Lease Document in any such event. (b) Lessee shall provide prompt written notice
to Lessor of any Total Loss or any material damage to the Equipment. Any such notice must be
provided together with any damage reports provided to any governmental authority, the insurer or
Supplier, and any documents pertaining to the repair of such damage, including copies of work
orders, and all invoices for related charges. (c) Without limiting any other provision hereof,
Lessee shall repair all damage to any item of Equipment from any and all causes, other than a Total
Loss, so as to cause it to be in the condition and repair required by
this Lease. (d) A “Total Loss”
shall be deemed to have occurred to an item of Equipment upon: (1) the actual or constructive total
loss of any item of the Equipment, (2) the loss, disappearance, theft or destruction of any item of
the Equipment, or damage to any item of the Equipment that is uneconomical to repair or renders it
unfit for normal use, or (3) the condemnation, confiscation, requisition, seizure, forfeiture or
other taking of title to or use of any item of the Equipment or the imposition of any Lien thereon
by any governmental authority. On the next rent payment date following a Total Loss (a “Loss
Payment Date”), Lessee shall pay to Lessor the Basic Rent due on that date plus the Stipulated Loss
Value of the item or items of the Equipment with respect to which the Total Loss has occurred (the
“Lost Equipment”), together with any Other Payments due hereunder with respect to the Lost
Equipment. Upon making such payment, (i) Lessee’s obligation to pay future Basic Rent shall
terminate solely with respect to the items of Lost Equipment so paid for, but Lessee shall remain
liable for, and pay as and when due, all Other Payments, and (ii) Lessor shall convey to Lessee all
of Lessor’s right, title and interest in the Lost Equipment, “AS IS WHERE IS”, but subject to the
requirements of any third party insurance carrier in order to settle an insurance claim. As used in
this Lease, “Stipulated Loss Value” shall mean the product of the Total Invoice Cost of the Lost
Equipment, times the percentage factor applicable to the Loss Payment Date, as set forth in the
Schedule of Stipulated Loss Values incorporated in such Schedule. After the final rent payment date
of the original term of a Schedule, the Stipulated Loss Value shall be determined as of the last
rent payment date during the original term of such Schedule, and the applicable percentage factor
shall be the last percentage factor set forth in the Schedule of Stipulated Loss Values
incorporated in such Schedule. If Lessee exercises its option to renew the term of a Schedule, the
Stipulated Loss Value applicable during such renewal term shall be determined by mutual agreement
of Lessor and Lessee as evidenced by an amended Schedule of Stipulated Loss Values to be
incorporated in such Schedule. (e) Lessor shall be under no duty to Lessee to pursue any claim
against any person in connection with a Total Loss or other loss or damage but upon request from
Lessee, Lessor shall assign to Lessee all of Lessor’s right, title and interest in any such claim
(subject

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to the requirements of any third party insurance carrier in order to settle an insurance claim
relating thereto). (f) if Lessor receives a payment under an insurance policy required under this
Lease in connection with any Total Loss or other loss of or damage to an item of Equipment, and
such payment is both unconditional and indefeasible, then provided Lessee shall have complied with
the applicable provisions of this Section, Lessor shall either (1) if received pursuant to a Total
Loss, remit such proceeds to Lessee up to an amount equal to the amount paid by Lessee to Lessor
as the Stipulated Loss Value, or credit such proceeds against any amounts owed by Lessee pursuant
to Section 12(d), or (2) if received with respect to repairs made pursuant to Section 12(c), remit
such proceeds to Lessee up to an amount equal to the amount of the costs of repair actually
incurred by Lessee, as established to Lessor’s satisfaction.

13. SURRENDER. (a) Lessee shall provide written notice to Lessor not less than one hundred eighty
(180) days and not more than two hundred forty (240) days prior to the expiration of the term of
any Schedule (or of any renewal thereof, if applicable) of Lessee’s intent to surrender the
Equipment described on such Schedule to Lessor upon the expiration of the term of such Schedule.
IF LESSEE FAILS TO PROVIDE THE FOREGOING NOTICE IN A TIMELY MANNER, THE TERM OF THE APPLICABLE
SCHEDULE AUTOMATICALLY SHALL BE DEEMED TO HAVE BEEN EXTENDED, WHICH EXTENSION SHALL CONTINUE UNTIL
ONE HUNDRED EIGHTY (180) DAYS AFTER THE DATE ON WHICH LESSEE PROVIDES THE REQUIRED NOTICE, DURING
WHICH EXTENSION PERIOD LESSEE SHALL CONTINUE TO PAY TO LESSOR PER DIEM RENT AT THE LAST PREVAILING
LEASE RATE UNDER THE APPLICABLE SCHEDULE; provided, however that Lessor may elect to terminate
such extension at any time upon ten (10) days written notice to Lessee. During such extension
period, the terms and conditions of this Lease (including, without limitation, the provisions of
this Section 13) shall continue to be applicable. Solely for purposes of the definition of
Stipulated Loss Value in Section 12(d) hereof, any such extension shall be deemed a renewal of the
term of such Schedule. (b) Upon the expiration or earlier cancellation or termination of any
Schedule, Lessee shall surrender and make available at Lessee’s site in Corpus Christi, Texas, for
pickup by Lessor the Equipment described on such Schedule free and clear of all Liens whatsoever.
Upon surrender, such Equipment shall be: (i) in the same condition as when delivered to Lessee
under the related Schedule, ordinary wear and tear excepted; (ii) mechanically and structurally
sound, capable of performing the functions for which such Equipment was originally designed, in
accordance with the Supplier’s published and recommended specifications (as applicable); (iii)
with all component parts in good operating condition (and all components must meet or exceed the
Supplier’s minimum recommended specifications, unless otherwise agreed by Lessor in writing); (iv)
with all software and documentation necessary for the operation of such Equipment for the
performance of the functions for which such Equipment was originally designed (whether or not such
software is embedded in or otherwise is a part of such Equipment); and (v) cleaned and
cosmetically acceptable, with all Lessee-installed markings removed and all rust, corrosion or
other contamination having been removed or properly treated, and in such condition so that it may
be immediately installed and placed in service by a third party. Upon surrender, such Equipment
shall be in compliance with all applicable Federal, state and local laws, and health and safety
guidelines. Lessee shall be responsible for the cost of all repairs, alterations, inspections,
appraisals, storage charges, insurance costs, demonstration costs and other related costs
necessary to cause such Equipment to be in full compliance with the terms of this Lease. (c) If
requested by Lessor, Lessee shall also surrender all related records and other data in Lessee’s
possession or control to Lessor, including all records of maintenance, modifications, additions
and major repairs, computerized maintenance history, and any maintenance and repair manuals
(collectively, the “Records”). All manuals or other documents surrendered to Lessor that are
subject to periodic revision will be fully up-to-date and current to the latest revision standard
of any particular manual or document received by Lessee. In the event any such Records are missing
or incomplete, Lessor shall have the right to cause the same to be reconstructed at Lessee’s
expense. (d) In addition to Lessor’s other rights and remedies hereunder, if such Equipment and
the related Records are not surrendered in a timely fashion, or if repairs are necessary to place
any item of Equipment in the condition required in this Section, Lessee shall (i) continue to pay
to Lessor per diem rent at the last prevailing lease rate under the applicable Schedule with
respect to such item of Equipment, for the period of delay in surrender, and/or for the period of
time reasonably necessary to accomplish such repairs, and (ii) pay to Lessor an amount equal to
the aggregate cost of any such repairs. Lessor’s acceptance of such rent on account of such delay
and/or repair does not constitute an extension or renewal of the term of the related Schedule or a
waiver of Lessor’s right to prompt surrender of such Equipment in proper condition. Such amount
shall be payable upon the earlier of Lessor’s demand or the surrender of such Equipment in
accordance with this Lease. (e) Without limiting any other terms or conditions of this Lease, the
provisions of this Section are of the essence of each Schedule, and upon application to any court
of equity having jurisdiction, Lessor shall be entitled to a decree against Lessee requiring
Lessee’s specific performance of its agreements in this Section.

14. INDEMNITY. (a) General. Lessee shall indemnify, defend and keep harmless Lessor and any
Assignee (as defined in Section 17), and their respective agents and employees (each, an
“Indemnitee”), from and against any and all Claims (other than such as may directly and proximately
result from the actual, but not imputed, negligence or willful misconduct of such Indemnitee), by
paying, on a net after-tax basis, or otherwise discharging same, when and as such Claims shall
become due. Lessee agrees that the indemnity provided for in this Section includes the agreement by
Lessee to indemnify each Indemnitee with respect to Claims for which such Indemnitee is strictly
liable. Lessor shall give Lessee

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prompt notice of any Claim hereby indemnified against and Lessee shall be entitled to control the
defense of and/or to settle any Claim, in each case, so long as (1) no Default or Event of Default
has occurred and is then continuing, (2) Lessee confirms, in writing, its unconditional and
irrevocable commitment to indemnify each Indemnitee with respect to such Claim, (3) Lessee is
financially capable of satisfying its obligations under this Section, (4) Lessor approves the
defense counsel selected by Lessee (such approval not to be unreasonably withheld or delayed), and
(5) there is no reasonable risk of criminal liability being imposed on Lessor or any of its
directors, officers or employees as a result of such Claim. The term “Claims” shall mean all
claims, allegations, harms, judgments, settlements, suits, actions, debts, obligations, damages to
third parties (whether incidental, consequential or direct), demands (for compensation,
indemnification, reimbursement or otherwise), losses, penalties, fines, liabilities (including
strict liability), charges that Lessor has incurred or for which it is responsible, in the nature
of interest, Liens, and costs (including attorneys’ fees and disbursements and any other legal or
non-legal expenses of investigation or defense of any Claim, whether or not such Claim is
ultimately defeated or enforcing the rights, remedies or indemnities provided for hereunder, or
otherwise available at law or equity to Lessor), of whatever kind or nature, contingent or
otherwise, matured or unmatured, foreseeable or unforeseeable, by or against any person, arising
on account of (A) any Lease Document, including the performance, breach (including any Default or
Event of Default) or enforcement of any of the terms thereof, or (B) the Equipment, or any part or
other contents thereof, any substance at any time contained therein or emitted therefrom,
including any hazardous substances, or the premises at which the Equipment may be located from
time to time, or (C) the ordering, acquisition, delivery, installation or rejection of the
Equipment, the possession of any property to which it may be attached from time to time,
maintenance, use, condition, ownership or operation of any item of Equipment, and by whomsoever
owned, used, possessed or operated, during the term of any Schedule with respect to that item of
Equipment, the existence of latent and other defects (whether or not discoverable by Lessor or
Lessee) any claim in tort for negligence (other than from the actual, but not imputed, negligence
or willful misconduct of such Indemnitee) or strict liability, and any claim for patent, trademark
or copyright infringement, or the loss, damage, destruction, theft, removal, return, surrender,
sale or other disposition of the Equipment, or any item thereof, including, Claims involving or
alleging environmental damage, or any criminal or terrorist act, or for whatever other reason
whatsoever. If any Claim is made against Lessee or an Indemnitee, the party receiving notice of
such Claim shall promptly notify the other, but the failure of the party receiving notice to so
notify the other shall not relieve Lessee of any obligation hereunder.

     (b) Tax Indemnity. (1) Lessee represents and warrants that: (A) it believes that it
is reasonable to estimate that the useful life of the Equipment exceeds the lease term (including
any interim and fixed rental renewal periods) by the greater of one (1) year or twenty (20)
percent of such estimated useful life, and that said Equipment will have a value at the end of the
lease term, including any fixed rate renewal period, of at least twenty (20) percent of the Total
Invoice Cost of the Equipment, without including in such value any increase or decrease for
inflation or deflation during the original lease term; and (B) the Equipment is, and will be used
by Lessee so as to remain, property eligible for the MACRS Deductions (as defined below).

          (2) If (A) Lessor in computing its taxable income or liability for tax, shall lose, or shall
not have, or shall lose the right to claim or there shall be disallowed or recaptured for Federal
and/or state income tax purposes, in whole or in part, the benefit of MACRS Deductions; or (B)
Lessor shall become liable for additional tax as a result of Lessee having added an attachment or
made an alteration to the Equipment, including (without limitation) any such attachment or
alteration which would increase the productivity or capability of the Equipment so as to violate
the provisions of Rev. Proc. 2001-28, 2001-1 C.B. 1156 (as it may hereafter be modified or
superseded); or (C) the statutory full-year marginal Federal tax rate (including any surcharge)
for corporations is other than thirty-five (35) percent; hereinafter referred to as a “Loss”; then
Lessee shall pay Lessor the Tax Indemnification Payment as additional rent and Lessor shall revise
the Schedule(s) of Stipulated Loss Values to reflect the Loss. As used herein, “MACRS Deductions”
shall mean the deductions under Section 167 of the Internal Revenue Code of 1986, as now or
hereafter amended (the “Code”), determined in accordance with the modified Accelerated Cost
Recovery System with respect to the Total Invoice Cost of any item of the Equipment using the
accelerated method set forth in Section 168(b)(1) or 168(b)(2) of the Code as in effect on the
date of this Lease for property assigned to the class of property specified in the Schedule
pertaining thereto; “Lessor” shall be deemed to include the consolidated Federal taxpayer group of
which Lessor is a member; and “Tax Indemnification Payment” shall mean such amount as, after
consideration of (i) all taxes required to be paid by Lessor in respect of the receipt thereof
under the laws of any governmental or taxing authority in the United States, and (ii) the amount
of any interest or penalty which may be payable by Lessor in connection with the Loss, shall be
required to cause Lessor’s after-tax net return (the
“Net Return”) to be equal to, but no greater
than, the Net Return computed consistently with current tax laws (and with the assumption that
Lessor is taxed at the highest marginal Federal and state tax rates) as of the date of this Lease
that would have been available to Lessor had the Loss not occurred.

     (3) Lessor shall be responsible for, and shall not be entitled to a Tax Indemnification
Payment by Lessee on account of, any Loss arising solely as a direct result of the occurrence of
any one or more of the following events: (A) the failure of Lessor to timely and properly claim
MACRS Deductions in the tax return of Lessor other than as a result of changes in the

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Code or applicable regulations unless in the reasonable opinion of Lessor’s tax counsel there is
no basis for such claim; or (B) the failure of Lessor to have sufficient taxable income before
application of the MACRS Deductions to offset the full amount of such MACRS Deductions other than
as a result of changes in the Code or applicable regulations; or (C) any event which by the terms
of the Lease requires payment by Lessee of the Stipulated Loss Value if such payment is thereafter
actually made to Lessor, to the extent that such payment reimburses Lessor for amounts otherwise
payable by Lessee pursuant hereto; or (D) a disqualifying disposition due to sale of any item of
the Equipment or the Lease by Lessor prior to a Default.

     (4) Lessor promptly shall notify Lessee in writing of such Loss and Lessee shall pay to
Lessor the Tax Indemnification Payment within thirty (30) days of such notice. For these purposes,
a Loss shall occur upon the earliest of: (A) the happening of any event (such as disposition or
change in use of any item of the Equipment) which will cause such Loss, (B) the payment by Lessor
to the Internal Revenue Service or state taxing authority of the tax increase (including an
increase in estimated taxes) resulting from such Loss; (C) the date on which the Loss is realized
by Lessor; or (D) the adjustment of the tax return of Lessor to reflect such Loss.

15. DEFAULT. A default shall be deemed to have occurred hereunder and under a Schedule upon the
occurrence of any of the following (each, an “Event of Default”): (a) non-payment of Basic Rent on
the applicable rent payment date, which non-payment continues for a period of three (3) days after
notice by Lessor to Lessee; (b) non-payment of any Other Payment within ten (10) days after notice
from Lessor to Lessee that such Other Payment is due; (c) failure to maintain, use or operate the
Equipment in compliance with applicable law; (d) breach by Lessee of its covenants pursuant to
Sections 4(e) hereof; (e) failure to obtain, maintain and comply with all of the insurance
coverages required under this Lease; (f) any transfer or encumbrance, or the existence of any
Lien, that is prohibited by this Lease; (g) a payment or other default by Lessee under any loan,
lease, guaranty or other financial obligation to Lessor or its affiliates which default entitles
the other party to such obligation to exercise remedies; (h) a payment or other default by Lessee
under any material (that is, for an amount in excess of $5,000,000) loan, lease, guaranty or other
material financial obligation to any third party which default has been declared; (i) an
inaccuracy in any representation or breach of warranty by Lessee (including any false or
misleading representation or warranty) in any financial statement or Lease Document, including any
omission of any substantial contingent or unliquidated liability or claim against Lessee; (j) the
commencement of any bankruptcy, insolvency, receivership or similar proceeding by or against
Lessee or any of its properties or business (unless, if involuntary, the proceeding is dismissed
within sixty (60) days of the filing thereof) or the rejection of this Lease or any other Lease
Document in any such proceeding; (k) the failure by Lessee generally to pay its debts as they
become due or its admission in writing of its inability to pay the same; (l) Lessee shall (1)
enter into any transaction of merger or consolidation, unless Lessee shall be the surviving entity
or sell, transfer or otherwise dispose of all or substantially all of its assets to a person (such
actions being referred to as an “Event”), unless the surviving entity or purchasing entity is
organized and existing under the laws of the United States or any state, and prior to such Event:
(A) such person executes and delivers to Lessor (x) an agreement satisfactory to Lessor (which
shall not unreasonably be withheld or delayed), in its sole discretion, containing such person’s
effective assumption, and its agreement to pay, perform, comply with and otherwise be liable for,
in a due and punctual manner, all of Lessee’s obligations having previously arisen, or then or
thereafter arising, under any and all of the Lease Documents, and (y) any and all other documents,
agreements, instruments, certificates (other than legal opinions) and filings reasonably requested
by Lessor; and (B) the creditworthiness of such person is equivalent to or better than the
creditworthiness of Lessee, and Lessor reasonably determines that such person conforms to the
other standard criteria then used by Lessor when approving transactions similar to the
transactions contemplated in this Lease; or (2) cease to do business as a going concern,
liquidate, or dissolve; (m) effective control of Lessee’s voting capital stock, issued and
outstanding from time to time, is not retained by the present holders (unless Lessee shall have
provided thirty (30) days’ prior written notice to Lessor of the proposed disposition and Lessor
shall have consented thereto in writing (which consent shall not unreasonably be withheld or
delayed)); (n) there occurs a default or anticipatory
repudiation under the Guaranty; or (o) breach by Lessee of any other covenant, condition or agreement (other than those in items (a)-(n))
under this Lease or any of the other Lease Documents that continues for thirty (30) days after
Lessor’s written notice to Lessee (but such notice and cure period will not be applicable unless
such breach is curable by practical means within such notice period). The occurrence of an Event
of Default with respect to any Schedule shall, at the sole discretion of Lessor, constitute an
Event of Default with respect to any or all Schedules to which it is then a party. Notwithstanding
anything to the contrary set forth herein, Lessor may exercise all rights and remedies hereunder
independently with respect to each Schedule.

16. REMEDIES. (a) If an Event of Default occurs with respect to any Schedule, the Lessor thereunder
may (in its sole discretion) exercise any one or more of the following remedies with respect to
such Schedule and any or all other Schedules to which such Lessor is then a party: (1) proceed at
law or in equity, to enforce specifically Lessee’s performance or to recover damages; (2) declare
each such Schedule in default, and cancel each such Schedule or otherwise terminate Lessee’s right
to use the Equipment and Lessee’s other rights, but not its obligations, thereunder and Lessee
shall immediately assemble, make available and, if Lessor requests, return the Equipment to Lessor
in

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accordance with the terms of this Lease; (3) enter any premises where any item of Equipment is
located without breach of the peace and in accordance with applicable law, and take immediate
possession of and remove (or disable in place) such item (and/or any unattached parts) by
self-help, summary proceedings or otherwise without liability except for negligence or willful
misconduct; (4) use Lessee’s premises for storage without liability except for negligence or
willful misconduct; (5) sell, re-lease or otherwise dispose of any or all of the Equipment,
whether or not in Lessor’s possession, at public or private sale, with five (5) days’ prior notice
to Lessee, and apply or retain the net proceeds of such disposition, with Lessee remaining liable
for any deficiency and with any excess being retained by Lessor; (6) enforce any or all of the
preceding remedies with respect to any related Collateral, and apply any deposit or other cash
collateral, or any proceeds of any such Collateral, at any time to reduce any amounts due to
Lessor; (7) demand and recover from Lessee all Liquidated Damages and all Other Payments whenever
the same shall be due; and (8) exercise any and all other remedies allowed by applicable law,
including the UCC. As used herein, “Liquidated Damages” shall mean the liquidated damages (all of
which, Lessee hereby acknowledges, are damages to be paid in lieu of future Basic Rent and are
reasonable in light of the anticipated harm arising by reason of an Event of Default, and are not
a penalty) described in the first sentence of parts (1) or (2) of Section 16(b), depending upon
the recovery and disposition of the Equipment leased under the applicable Schedule. Upon the
occurrence of the Event of Default described in Section 15(j) hereof, the remedy provided in
Clause (7) above shall be automatically exercised without the requirement of prior written notice
to Lessee or of any other act or declaration by Lessor, and the Liquidated Damages described
therein shall be immediately due and payable.

          (b) (1) If an Event of Default occurs with respect to any Schedule, if Lessor recovers the
Equipment and disposes of it by a lease or elects not to dispose of the Equipment after recovery,
upon demand, Lessee shall pay to Lessor an amount equal to the sum of (A) any accrued and unpaid
Rent as of the date Lessor recovers possession of the Equipment, plus (B) the present
value as of such date of the total Basic Rent for the then remaining term of such Schedule,
minus (C) either, as applicable, (i) the present value, as of the commencement date of any
substantially similar re-lease of the Equipment, of the re-lease rent payable for that period,
commencing on such date, which is comparable to the then remaining term of such Schedule or (ii)
the present value, as of that certain date which may be determined by taking into account Lessor’s
having a reasonable opportunity to remarket the Equipment, of the “market rent” for such Equipment
(as computed pursuant to Article 2A) in the continental United States on that date, computed for
that period, commencing on such date, which is comparable to the then remaining term of such
Schedule; provided, however, Lessee acknowledges that if Lessor is unable after reasonable effort
to dispose of the Equipment at a reasonable price and pursuant to other reasonable terms, or the
circumstances reasonably indicate that such an effort will be unavailing, the “market rent” in
such event will be deemed to be $0.00, but in the event that Lessor does eventually re-lease or
otherwise dispose of the Equipment, it will apply the net proceeds of such disposition, to the
extent received in good and indefeasible funds, as a credit or reimbursement, as applicable, in a
manner consistent with the applicable provisions of Article 2A. Any amounts discounted to present
value, shall be discounted at the rate of three percent (3%) per annum, compounded annually.

               (2) If an Event of Default occurs with respect to any Schedule, if Lessee fails to surrender
the Equipment in the manner and condition required by this Lease, or Lessor recovers and sells the
Equipment, upon demand, Lessee shall pay to Lessor an amount calculated as the Stipulated Loss
Value of the Equipment (determined as of the next rent payment date after the date of the
occurrence of the subject Event of Default), together with all other Rent due with respect to the
related Schedule as of such determination date, and all Enforcement Costs (defined in Section
16(c)), less a credit for any disposition proceeds, if applicable pursuant to the application
provisions in the next sentence. If Lessor demands the Liquidated Damages under this part (2), and
recovers and sells the Equipment, any proceeds received in good and indefeasible funds shall be
applied by Lessor, with respect to the related Schedule: first, to pay all Enforcement Costs, to
the extent not previously paid; second, to pay to Lessor an amount equal to any unpaid
Rent due and payable, together with the Liquidated Damage amounts specified in this part (2), to
the extent not previously paid; third, to pay to Lessor any interest accruing on the
amounts covered by the preceding clauses, at the Default Rate, from and after the date the same
becomes due, through the date of payment; and fourth, (A) if the Lessor under such
Schedule is also the Lessor under any other Schedules (whether by retaining the same, or as
Assignee), to satisfy any remaining obligations under any or all such other Schedules, or (B) if
such Lessor is not the Lessor under any other Schedule, or if Lessee’s obligations to such Lessor
under such other Schedules have been fully and indefeasibly satisfied, to reimburse Lessee for
such amounts to the extent paid by Lessee as Liquidated Damages pursuant to this part (2).

     (c) A cancellation of any Schedule shall occur only upon written notice by Lessor to Lessee.
Unless already specifically provided for in Section 16(b), if an Event of Default occurs with
respect to any Schedule, Lessee shall also be liable for all of the following (“Enforcement
Costs”): (1) all unpaid Rent due before, during or after exercise of any of the foregoing remedies,
and (2) all reasonable legal fees (including consultation, drafting notices or other documents,
expert witness fees, sending notices or instituting, prosecuting or defending litigation or
arbitration) and other reasonable enforcement costs and expenses incurred by reason of any Default
or Event of Default or the exercise of Lessor’s rights

9

 

or remedies, including all expenses incurred in connection with the return or other recovery of
any Equipment in accordance with the terms of this Lease or in placing such Equipment in the
condition required hereby, or the sale, release or other disposition (including but not limited to
costs of transportation, possession, storage, insurance, taxes, lien removal, repair,
refurbishing, advertising and brokers’ fees), and sales or use taxes incurred by Lessor in
connection with any disposition of the Equipment after the occurrence of an Event of Default, and
all other pre-judgment and post-judgment enforcement related actions taken by Lessor or any
actions taken by Lessor in any bankruptcy case involving Lessee or the Equipment. From and after
the date on which an Event of Default occurs, Lessee shall pay interest to Lessor with respect to
all amounts due hereunder until such amounts are received by Lessor in good funds at a per annum
interest rate that is the lesser of ten (10) percent or the maximum rate permitted by applicable
law (the “Default Rate”). No right or remedy is exclusive and each may be used successively and
cumulatively. Any failure to exercise the rights granted hereunder upon any Default or Event of
Default shall not constitute a waiver of any such right. No extension of time for payment or
performance of any of Lessee’s obligations hereunder shall operate to release, discharge, modify,
change or affect the original liability of Lessee for such obligations, either in whole or in
part. In any action to repossess any Equipment or other Collateral, Lessee waives any bonds and
any surety or security required by any applicable laws as an incident to such repossession.
Notices of Lessor’s intention to accelerate, acceleration, nonpayment, presentment, protest,
dishonor or any other notice whatsoever (other than as expressly set forth herein) are waived by
Lessee. Any notice given by Lessor of any disposition of the Equipment or any Collateral or other
intended action of Lessor which is given in accordance with this Lease at least five (5) business
days prior to such action, shall constitute fair and reasonable notice of such action. The
execution of a Schedule shall not constitute a waiver by Lessor of any pre-existing Default or
Event of Default. With respect to any disposition of any Equipment or Collateral pursuant to this
Section, (i) Lessor shall have no obligation, subject to the requirements of commercial
reasonableness, to clean-up or otherwise prepare the same for disposition, (ii) Lessor may comply
with any applicable law in connection with any such disposition, and any actions taken in
connection therewith shall not be deemed to have adversely affected the commercial reasonableness
of any disposition thereof, (iii) Lessor may disclaim any title or other warranties in connection
with any such disposition, and (iv) Lessee shall remain responsible for any deficiency remaining
after Lessor’s exercise of its remedies and application of any funds or credits against Lessee’s
obligations under any Schedule, and Lessor shall retain any excess after such application.

17. ASSIGNMENT. (a) LESSEE SHALL NOT ASSIGN, DELEGATE, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER OR UNDER ANY SCHEDULE, OR ITS LEASEHOLD INTEREST OR ANY COLLATERAL, SUBLET
THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR
REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE. Notwithstanding the foregoing, Lessee may sublease
or otherwise permit the Equipment to be operated or used by an affiliate of Lessee provided that
such sublease or right of possession is pursuant to a written agreement which is expressly subject
and subordinate to this Lease and the rights of Lessor hereunder; which shall not permit any
further subleasing or other disposition of the Equipment; shall not be for a term longer than the
then remaining term of this Lease; and shall not contain provisions that are inconsistent with the
provisions of this Lease. Without limiting the foregoing, (1) Lessee may not attempt to dispose of
any of the Equipment, and (2) Lessee shall (A) maintain the Equipment free from all Liens, other
than Permitted Liens, (B) notify Lessor immediately upon receipt of notice of any Lien affecting
the Equipment, and (C) defend Lessor’s title to the Equipment. A “Permitted Lien” shall mean any
Lien for Impositions, Liens of mechanics, materialmen, or suppliers and similar Liens arising by
operation of law, provided that any such Lien is incurred by Lessee in the ordinary course of
business, for sums that are not yet delinquent or are being contested in good faith and with due
diligence, by negotiations or by appropriate proceedings which suspend the collection thereof and,
in Lessor’s reasonable discretion, (i) do not involve any substantial danger of the sale,
forfeiture or loss of the Equipment or any interest therein, and (ii) for the payment of which
adequate assurances or security have been provided to Lessor. No subleasing, permitted use or
disposition referred to in this Section shall relieve Lessee of its obligations, and Lessee shall
remain primarily liable under each Schedule and all of the other Lease Documents. (b) Lessor may at
any time with or without notice to Lessee grant a security interest in, sell, assign, delegate or
otherwise transfer (an “Assignment”) all or any part of its interest in the Equipment, this Lease
or any Schedule and any related Lease Documents or any Rent thereunder, or the right to enter into
any Schedule, and Lessee (after receipt of written notice of the applicable Assignment) shall
perform all of its obligations thereunder, to the extent so transferred, for the benefit of the
beneficiary of such Assignment (such beneficiary, including any successors and assigns, an
“Assignee”). Lessee agrees not to assert against any Assignee any Abatement (without limiting the
provisions of Section 2) or Claim that Lessee may have against Lessor, and Assignee shall not be
bound by, or otherwise required to perform any of Lessor’s obligations, unless expressly assumed by
such Assignee. Lessor shall be relieved of any such assumed obligations. If so directed in writing,
Lessee shall pay all Rent and all other sums that become due under the assigned Schedule and other
Lease Documents directly to the Assignee or any other party designated in writing by Lessor or such
Assignee. Lessee acknowledges that Lessor’s right to enter into an Assignment is essential to
Lessor and, accordingly, waives any restrictions under applicable law with respect to an Assignment
and any related remedies. Upon the request of Lessor or any Assignee, Lessee also agrees (i) to
promptly execute and deliver to Lessor or to such Assignee an acknowledgment of the Assignment in
form and substance satisfactory to the requesting

10

 

party, an insurance certificate and such other documents and assurances reasonably requested by
Lessor or Assignee to confirm Lessee’s acknowledgment of the Assignment, and (ii) to comply with
all other reasonable requirements of any such Assignee in connection with any such Assignment to
confirm Lessee’s acknowledgment of the Assignment, provided that Lessee shall not be required to
provide a legal opinion in connection with any such Assignment or to change the terms and
conditions of the Lease Documents. Upon such Assignment and except as may otherwise be provided
herein, all references in this Lease to “Lessor” shall include such Assignee. (c) Subject always
to the foregoing, this Lease and each Schedule shall inure to the benefit of, and are binding
upon, Lessee’s and Lessor’s respective successors and assigns.

18. MISCELLANEOUS. (a) This Lease, each Schedule, any Riders hereto or thereto and any commitment
letter between the parties, constitute the entire agreement between the parties with respect to the
subject matter hereof and thereof and shall not be amended or modified in any manner except by a
document in writing executed by both parties. (b) Any provision of this Lease 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 provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. (c) The representations, warranties and
agreements of Lessee herein shall be deemed to be continuing and to survive the execution and
delivery of this Lease, each Schedule and any other Lease Documents. With respect to each Schedule,
the obligations of Lessee under Sections 8, 9, 10, 12, 13 and 14 hereof, together with any of
Lessee’s obligations under the other provisions of this Lease (as incorporated therein) which have
accrued but not been fully satisfied, performed or complied with prior to the expiration or earlier
cancellation or termination of such Schedule, shall survive the expiration or earlier cancellation
or termination thereof. (d) All of Lessee’s obligations hereunder and under any Schedule shall be
performed at Lessee’s sole expense. Lessee shall reimburse Lessor promptly upon demand for all
expenses incurred by Lessor in connection with (1) any action taken by Lessor at Lessee’s request,
or in connection with any option, (2) the filing or recording of real property waivers and UCCs,
(3) any Enforcement Costs not recovered pursuant to Section 16, (4) all inspections, and (5) all
lien search reports (and copies of filings) requested by Lessor. If Lessee fails to perform any of
its obligations with respect to a Schedule, Lessor shall have the right, but shall not be
obligated, to effect such performance, and Lessee shall reimburse Lessor, upon demand, for all
expenses incurred by Lessor in connection with such performance. Lessor’s effecting such compliance
shall not be a waiver of Lessee’s default. (e) Lessee irrevocably appoints Lessor as Lessee’s
attorney-in-fact (which power shall be deemed coupled with an interest) to: (1) make minor
corrections to manifest errors in factual data in any Schedule and/or any addenda, attachments,
exhibits and/or riders to this Lease or any Schedule; and (2) execute, endorse and deliver any
documents and checks or drafts relating to or received in payment for any loss or damage under the
policies of insurance required by this Lease, but only to the extent that the same relates to the
Equipment, or are required by titling agencies in order to reflect Lessor as the owner and/or
lienholder with respect to certificates of title pertaining to motor vehicles (if any) comprising
the Equipment. (f) LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH
LESSEE AND/OR LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE. (g) All
notices (excluding billings and communications in the ordinary course of business) hereunder shall
be in writing, personally delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt), or sent by certified mail, return receipt requested,
addressed to the other party at its respective address stated below the signature of such party or
at such other address as such party shall from time to time designate in writing to the other
party; and shall be effective from the date of receipt. (h) This Lease shall not be effective
unless and until accepted by execution by an officer of Lessor. THIS LEASE AND ALL OF THE
 OTHER
LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER, SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE (OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW)), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT. The parties agree that any action or
proceeding arising out of or relating to this Lease may be commenced in any state or Federal court
in the State of New York, and agree that a summons and complaint commencing an action or proceeding
in any such court shall be properly served and shall confer personal jurisdiction if served
personally or by certified mail to it at the mailing address below Lessee’s signature, or as it may
provide in writing from time to time, or as otherwise provided under the laws of the State of New
York. (i) This Lease and all of the other Lease Documents may be executed in counterparts.
Photocopies or facsimile transmissions of signatures shall be deemed original signatures and shall
be fully binding on the parties to the same extent as original signatures. The transfer or
possession of the “Original” of this Lease shall be irrelevant to the full or collateral assignment
of, or grant of security interest in, any Schedule; provided, however, no security interest in any
Schedule may be created through the transfer, possession or control, as applicable, of any
counterpart of such Schedule other than the original thereof, which shall be identified as the
document or record (as applicable) marked “Original” and all other counterparts shall be marked
“Duplicate”. (j) If Lessor is required by the terms hereof to pay to or for the benefit of Lessee
any amount received as a refund of an Imposition or as insurance proceeds, Lessor shall not be
required to pay such amount, if any Default has occurred and not been cured or any Event of Default
shall have occurred and not been waived by Lessor. In addition, if Lessor is required by the terms
hereof to cooperate with Lessee in connection with

11

 

certain matters, such cooperation shall not be required if a Default or Event of Default has then
occurred and is continuing. (k) To the extent Lessor is required to give its consent or approval
with respect to any matter, the reasonableness of Lessor’s withholding of such consent shall be
determined based on the then existing circumstances; provided, that Lessor’s withholding of its
consent shall be deemed reasonable for all purposes if (i) the taking of the action that is the
subject of such request, might reasonably (A) result in an impairment of Lessor’s rights, title or
interests hereunder or under any Schedule or other Lease Document, or to the Equipment, or (B)
expose Lessor to any Claims or Impositions, or (ii) Lessee fails to provide promptly to Lessor any
filings, certificates, or indemnities reasonably required by Lessor as a condition to such
consent. (I) There is no restriction (either express or implied) on any disclosure or
dissemination of the tax treatment or tax structure of the transactions contemplated by this Lease
or any documents executed in connection herewith. Further, each party hereto acknowledges that it
has no proprietary rights to any tax matter or tax idea or to any element of the transaction
structure contemplated by this Lease; and each party hereto (and any employee, representative or
agent of any party hereto) may disclose to any and all persons (without limitation of any kind),
the Federal tax treatment and Federal tax structure of the transaction contemplated by this Lease.
This Section 18(1) is intended to cause the transaction contemplated by this Lease to be treated
as not having been offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section
6011 of the Code and Section 6111 of the Code and the Treasury Regulations promulgated thereunder;
and shall be construed in a manner consistent with such purpose.

19. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when used in this Lease or in
any of the Schedules have the following meanings: (1) “affiliate”: with respect to any given
person, shall mean (i) each person that directly or indirectly owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, five (5) percent or more of the voting
stock, membership interest or similar equity interest having ordinary voting power in the election
of directors or managers of such person, (ii) each person that controls, is controlled by, or is
under common control with, such person, or (iii) each of such person’s officers, directors,
members, joint venturers and partners. For the purposes of this definition, “control” of a person
means the possession, directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by contract or
otherwise; (2) “applicable law” or “law”: any law, rule, regulation, ordinance, order, code, common
law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award,
permit or similar norm or decision of any governmental authority; (3) “AS IS, WHERE IS”: AS IS,
WHERE IS, without warranty, express or implied, with respect to any matter whatsoever; (4)
“business day”: any day, other than a Saturday, Sunday, or legal holiday for commercial banks under
the laws of the state of the Lessor’s notice address; (5) “governmental authority”: any federal,
state, county, municipal, regional or other governmental authority, agency, board, body,
instrumentality or court, in each case, whether domestic or foreign; (6) “person”: any individual,
corporation, limited liability entity, partnership, joint venture, or other legal entity or a
governmental authority, whether employed, hired, affiliated, owned, contracted with, or otherwise
related or unrelated to Lessee or Lessor; and (7) “UCC” or “Uniform Commercial Code”: the Uniform
Commercial Code as in effect in the State or in any other applicable jurisdiction; and any
reference to an article (including Article 2A) or section thereof shall mean the corresponding
article or section (however termed) of any such applicable version of the Uniform Commercial Code.
(b) The following terms when used herein or in any of the Schedules shall be construed as follows:
(1) “herein,” “hereof,” “hereunder,” etc.: in, of, under, etc. this Lease or such other Lease
Document in which such term appears (and not merely in, of, under, etc. the section or provision
where the reference occurs); (2) “including”: means including without limitation unless such term
is followed by the words “and limited to,” or similar words; and (3) “or”: at least one, but not
necessarily only one, of the alternatives enumerated. Any defined term used in the singular
preceded by “any” indicates any number of the members of the relevant class. Any Lease Document or
other agreement or instrument referred to herein means such agreement or instrument as supplemented
and amended from time to time. Any reference to Lessor or Lessee shall include their permitted
successors and assigns. Any reference to an applicable law shall also mean such law as amended,
superseded or replaced from time to time.

20. RIDER. Rider No. 1 attached hereto is incorporated in this Lease.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

12

 

     IN WITNESS WHEREOF, the parties hereto have caused this Master Operating Lease Agreement to be
duly executed, under seal, as of the day and year first above set forth.

	 	 	 	 	 	 	 	 	 	 	 	 	 

	BB&T EQUIPMENT FINANCE CORPORATION
Lessor	 	 	 	 	 	C&J SPEC-RENT SERVICES, INC.
Lessee	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen Gray
	 	[SEAL]
	 	 	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	Name:

	 	 

Stephen Gray
	 	 	 	 	 	Name:
	 	 

Randy McMullen
	 	 
	Title:

	 	Senior Vice President
	 	 	 	 	 	Title:
	 	VP Finance	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	600 Washington Avenue
Suite 201
	 	 	 	 	 	 	 	500 N. Shoreline
Suite 350	 	 
	 

	 	Towson, Maryland 21204
	 	 	 	 	 	 	 	Corpus Christi, Texas 78401	 	 
	 

	 	Facsimile: 410-825-1691
	 	 	 	 	 	 	 	Facsimile: 361-653-9444	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Form of Organization: Corporation	 	 
	 	 	 	 	 	 	 	 	Jurisdiction of Organization: Indiana	 	 
	 	 	 	 	 	 	 	 	Organizational No.: 2005071200306	 	 
	 	 	 	 	 	 	 	 	Federal Employer Identification No. 87-0750712	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	C&J ENERGY SERVICES, INC.
 Lessee	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	 

	 	 	 	 	 	 	 	Name:
	 	 

Randy McMullen
	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	VP Finance	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	500 N. Shoreline	 	 
	 

	 	 	 	 	 	 	 	 	 	Suite 350	 	 
	 

	 	 	 	 	 	 	 	 	 	Corpus Christi, Texas 78401	 	 
	 

	 	 	 	 	 	 	 	 	 	Facsimile: 361-653-9444	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Form of Organization: Corporation	 	 
	 	 	 	 	 	 	 	 	Jurisdiction of Organization: Texas	 	 
	 	 	 	 	 	 	 	 	Organizational No.: 0800716424	 	 
	 	 	 	 	 	 	 	 	Federal Employer Identification No. 20-5673219	 	 

13

 

BB&T EQUIPMENT FINANCE CORPORATION

RIDER NO. 1 TO MASTER OPERATING LEASE AGREEMENT

To and part of Master Operating Lease Agreement dated as of the 14th day of July, 2010 (the
“Lease”) between BB&T EQUIPMENT FINANCE CORPORATION, its successors and assigns (“Lessor”), and
C&J SPEC-RENT SERVICES, INC. and C&J ENERGY SERVICES, INC., their successors and permitted
assigns, jointly and severally (collectively “Lessee”).

     JOINT AND SEVERAL OBLIGATIONS. The obligations of C&J Spec-Rent Services, Inc. and C&J Energy
Services, Inc. are joint and several. Each reference to the term “Lessee” shall be deemed to refer
to each of C&J Spec-Rent Services, Inc. and C&J Energy Services, Inc; each representation and
warranty made by Lessee shall be deemed to have been made by each such party; each covenant and
undertaking on the part of Lessee shall be deemed individually applicable with respect to each
such party; and each event constituting an Event of Default under this Lease shall be determined
with respect to each such party. A separate action or actions may be brought and prosecuted
against any such party whether an action is brought against any other party or whether any other
party is joined in any such action or actions. Each such party waives any right to require Lessor
to: (a) proceed against any other party; (b) proceed against or exhaust any security held from any
other party; or (c) pursue any other remedy in Lessor’s power whatsoever. Notices hereunder
required to be provided to Lessee shall be effective if provided to any such party. Any consent on
the part of Lessee hereunder shall be effective when provided by any such party and Lessor shall
be entitled to rely upon any notice or consent given by any such party as being notice or consent
given by Lessee hereunder.

     In the event any obligation of Lessee under this Lease is deemed to be an agreement by any
individual Lessee to answer for the debt or default of another individual Lessee (including each
other) or as a hypothecation of property as security therefor, each Lessee represents and warrants
that: (x) no representation has been made to it as to the creditworthiness of any other obligor,
and (y) it has established adequate means of obtaining from each other obligor on a continuing
basis, financial or other information pertaining to each other obligor’s financial condition.
Except as expressly provided in the Lease Documents, each Lessee expressly waives diligence,
demand, presentment, protest and notice of every kind and nature whatsoever, consents to the taking
by Lessor from any other obligor of any additional security for the obligations secured hereby, or
the alteration or release in any manner of any security now or hereafter held in connection with
any obligations now or hereafter secured by this Lease, and consents that Lessor and any obligor
may deal with each other in connection with said obligations or otherwise, or alter any contracts
now or hereafter existing between them, in any manner whatsoever, including without limitation the
renewal, extension, acceleration, changes in time for payment, and increases or decreases in any
rent, rate of interest or other amounts owing, all without in any way altering the liability of
each Lessee, or affecting any security for such obligations. Should any default be made in the
payment of any such obligations or in the terms or conditions of any security held, Lessor is
hereby expressly given the right, at its option, to proceed in the enforcement of this Lease
independently of any other remedy or security it may at any time hold in connection with such
obligations secured and it shall not be necessary for Lessor to proceed upon or against and/or
exhaust any other security or remedy before proceeding to enforce its rights against any Lessee.
Until such time as Lessor has been fully and indefeasibly paid under the Lease Documents, each
Lessee further waives any right of subrogation, reimbursement, exoneration, contribution,
indemnification, setoff or other recourse in respect of sums paid to Lessor by any Lessee.

	 	 	 	 	 	 	 	 	 	 	 	 	 

	BB&T EQUIPMENT FINANCE CORPORATION	 	 	 	C&J SPEC-RENT SERVICES, INC.	 	 
	Lessor	 	 	 	 	 	Lessee	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen Gray
	 	[SEAL]
	 	 	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	Name:

	 	 

Stephen Gray
	 	 	 	 	 	Name:
	 	 

Randy McMullen
	 	 
	Title:

	 	Senior Vice President
	 	 	 	 	 	Title:
	 	VP Finance	 	 

 

 

	 	 	 	 	 	 	 
	 	 	C&J ENERGY SERVICES, INC. 

Lessee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	 

	 	Name:
	 	 

Randy McMullen
	 	 
	 

	 	Title:
	 	VP Finance	 	 

2

 

BB&T EQUIPMENT FINANCE CORPORATION

CORPORATE CERTIFICATE OF RESOLUTIONS

     I hereby certify to BB&T EQUIPMENT FINANCE CORPORATION, its successors and assigns
(“Lessor”), that I am the Secretary of C&J ENERGY SERVICES, INC., a corporation of the State of
Texas (the “Corporation”), and that the following is a true copy of resolutions duly adopted by
the Board of Directors of the Corporation on the 14th day of July, 2010, and further that such
resolutions are in conformity with the Charter and By-Laws of the Corporation and are in full
force and effect on the date hereof and have not been modified or rescinded:

     “RESOLVED, That the form, terms and provisions of the Master Operating Lease Agreement and
Schedules thereto to be or heretofore having been entered into by and between this Corporation and
BB&T Equipment Finance Corporation and/or its assignees (‘Lessor’), copies of which have been
submitted to the Board of Directors, providing for the leasing of equipment by this Corporation
be, and the same hereby are, in all respects approved; and

     “FURTHER RESOLVED, That any officer of this Corporation be, and each of them hereby is,
authorized in the name and on behalf of this Corporation (and all actions of any officer of this
Corporation heretofore taken in connection therewith are hereby ratified and confirmed as and for
actions of the Corporation) to sell to (if applicable) and lease from Lessor, under the terms of
said Master Operating Lease Agreement and any Schedule thereto, such equipment as such officer, in
his sole discretion, may determine, and for this purpose to execute and deliver in the name and on
behalf of this Corporation the Master Operating Lease Agreement and any Schedule thereto, in
substantially the form submitted to the Board of Directors, with such changes, additions and
amendments thereto as shall be approved by the officer who executes the same, and such other
agreements, documents and instruments (including, without limitation, one or more bills of sale),
and to do all such other acts and things as may be required to consummate this leasing
arrangement; and

     “FURTHER RESOLVED, That the Secretary of this Corporation is authorized and directed to
deliver and certify to Lessor a certified copy of these resolutions and that the same are in
conformity with the Charter and By-Laws of this Corporation.”

     I further certify that the following persons are duly elected, qualified and acting officers
of the Corporation, holding the offices indicated opposite their respective names, and the
signature appearing opposite their respective names are the genuine signatures of such persons,
respectively:

	 	 	 	 	 	 	 
	Name	 	Office	 	Signature	 	 
	 
	 	 	 	 	 	 
	Randy McMullen

	 	VP Finance
	 	/s/ Randy McMullen	 	 
	 

	 	 

	 	 

	 	 
	Brett Barrier

	 	VP Frac-Sure Div.
	 	/s/ Brett Barrier	 	 
	 

	 	 

	 	 

	 	 
	Josh Comstock

	 	CEO
	 	/s/ Josh Comstock	 	 
	 

	 	 

	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 

	 	 

	 	 

 

 

     IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of this Corporation
this 14th day of July, 2010.

	 	 	 	 	 
	 	 	 
	 	                                                      /s/ Randy McMullen
 	 
	 	Secretary 	 
	 	 	 
	 

[CORPORATE SEAL]

     I certify that the person having executed the foregoing Certificate as Secretary is the duly
elected, qualified and acting Secretary of the Corporation, and the signature of such person
set forth above is his/her genuine signature.

	 	 	 	 	 
	 	 	 
	 	                                             /s/ Josh Comstock
 	 
	 	Name:  	Josh Comstock 	 
	 	Title:  	CEO 	 
	 

2

 

BB&T EQUIPMENT FINANCE CORPORATION

CORPORATE CERTIFICATE OF RESOLUTIONS

     I hereby certify to BB&T EQUIPMENT FINANCE CORPORATION, its successors and assigns
(“Lessor”), that I am the Secretary of C&J SPEC-RENT SERVICES, INC., a corporation of the State of
Indiana (the “Corporation”), and that the following is a true copy of resolutions duly adopted by
the Board of Directors of the Corporation on the 14th day of
July, 2010, and further that such resolutions are in conformity with the Charter and By-Laws of the
Corporation and are in full force and effect on the date hereof and have not been modified or
rescinded:

     “RESOLVED, That the form, terms and provisions of the Master Operating Lease Agreement and
Schedules thereto to be or heretofore having been entered into by and between this Corporation and
BB&T Equipment Finance Corporation and/or its assignees (‘Lessor’), copies of which have been
submitted to the Board of Directors, providing for the leasing of equipment by this Corporation be,
and the same hereby are, in all respects approved; and

     “FURTHER RESOLVED, That any officer of this Corporation be, and each of them hereby is,
authorized in the name and on behalf of this Corporation (and all actions of any officer of this
Corporation heretofore taken in connection therewith are hereby ratified and confirmed as and for
actions of the Corporation) to sell to (if applicable) and lease from Lessor, under the terms of
said Master Operating Lease Agreement and any Schedule thereto, such equipment as such officer, in
his sole discretion, may determine, and for this purpose to execute and deliver in the name and on
behalf of this Corporation the Master Operating Lease Agreement and any Schedule thereto, in
substantially the form submitted to the Board of Directors, with such changes, additions and
amendments thereto as shall be approved by the officer who executes the same, and such other
agreements, documents and instruments (including, without limitation, one or more bills of sale),
and to do all such other acts and things as may be required to consummate this leasing
arrangement; and

     “FURTHER RESOLVED, That the Secretary of this Corporation is authorized and directed to
deliver and certify to Lessor a certified copy of these resolutions and that the same are in
conformity with the Charter and By-Laws of this Corporation.”

     I further certify that the following persons are duly elected, qualified and acting officers
of the Corporation, holding the offices indicated opposite their respective names, and the
signature appearing opposite their respective names are the genuine signatures of such persons,
respectively:

	 	 	 	 	 	 	 
	Name	 	Office	 	Signature	 	 
	 
	 	 	 	 	 	 
	Randy McMullen

	 	VP Finance
	 	/s/ Randy McMullen	 	 
	 
	 	 
	 	 

	 	 
	Brett Barrier

	 	VP Frac-Sure Div.
	 	/s/ Brett Barrier	 	 
	 
	 	 
	 	 

	 	 
	Josh Comstock

	 	CEO
	 	/s/ Josh Comstock	 	 
	 
	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 

	 	 

	 	 

 

 

     IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of this
Corporation this 14th day of July, 2010.

	 	 	 	 	 
	 	 	 
	 	/s/ Randy McMullen
 	 
	 	Secretary 	 
	 	 	 
	 

[CORPORATE SEAL]

     I certify that the person having executed the foregoing Certificate as Secretary is the duly
elected, qualified and acting Secretary of the Corporation, and the signature of such person set
forth above is his/her genuine signature.

	 	 	 	 	 
	 	 	 
	 	                                                /s/ Josh Comstock
 	 
	 	Name:  	Josh Comstock 	 
	 	Title:  	CEO 	 
	 

2

 

BB&T EQUIPMENT FINANCE CORPORATION

AGENCY AGREEMENT

THIS AGENCY AGREEMENT (“Agreement”) is made as of the 14th day of July, 2010,
between BB&T EQUIPMENT FINANCE CORPORATION, its successors and assigns (“Lessor”), and C&J
SPEC-RENT SERVICES, INC. and C&J ENERGY SERVICES, INC., their successors and permitted assigns,
jointly and severally (collectively “Lessee”). Capitalized terms not defined herein shall have the
meanings assigned to them in the Lease (as that term is defined below).

          Lessor and Lessee have or will entered into an Master Operating Lease Agreement dated as of
even date herewith (the “Master Lease Agreement”), which contemplates the execution of one or more
Equipment Schedules incorporating by reference the terms and conditions of the Master Lease
Agreement. Each Equipment Schedule, incorporating by reference the Master Lease Agreement, is
hereinafter referred to as the “Lease”. Capitalized terms used herein without definition shall
have the meaning given them in the Lease. Pursuant to the Lease, Lessor, as the lessor, has agreed
to lease certain items of equipment to Lessee, as lessee (all such equipment leased thereunder is
hereinafter collectively referred to as the “Equipment”).

          Lessee desires to be appointed as Lessor’s agent to order, receive and pay for, in the name
and on behalf of Lessor, the Equipment and Lessor is willing to so appoint Lessee, on and subject
to the terms and conditions more fully set forth below..

          NOW, THEREFORE, in consideration of the above premises and the mutual promises contained
herein, as well as other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

GENERAL UNDERTAKING

          Section 1.01 Ordering of Equipment. From time to time, Lessee shall issue its purchase orders
to, or shall enter into purchase agreements with, suppliers of equipment (each a “Supplier” and
collectively, the “Suppliers”).

          Section 1.02 Appointment. Lessor hereby appoints Lessee, and Lessee hereby accepts such
appointment, as the agent of Lessor, without any fee for acting as such agent, pursuant to the
terms and conditions of this Agreement, for the purpose of (a) subject to the conditions set forth
in Section 2.01 hereof, ordering the Equipment on Lessor’s behalf for leasing to Lessee under the
Lease; (b) accepting the Equipment on Lessor’s behalf for leasing to Lessee under the Lease; and
(c) paying, on behalf of Lessor, any and all amounts required to purchase such Equipment from the
respective Suppliers thereof (“Purchase Price”). It is specifically agreed that all of the power
and authority vested to Lessee herein shall be subject to any modifications as may from time to
time be made by Lessor.

          Section 1.03 Powers. Except as otherwise may be expressly provided in this Agreement, Lessee
is hereby granted the authority to act, and hereby agrees to act, on behalf of Lessor and in the
name of Lessor, solely to the extent necessary to carry out its duties under this Agreement.

          Section 1.04 Lease. This Agreement is entered into in connection with and subject to the terms
of the Lease and in the event of a conflict between the terms of this Agreement and the Lease, the
Lease shall control. Lessee and Lessor may from time to time hereafter enter into Equipment
Schedules to the Lease, and it is the intent of the parties that this Agreement facilitate the
leasing of Equipment under the Lease. NOTHING IN THIS AGREEMENT SHALL BE OR SHALL BE DEEMED TO BE,
A COMMITMENT ON THE PART OF LESSOR TO EXECUTE OR OTHERWISE ENTER INTO ANY EQUIPMENT SCHEDULES AFTER
THE DATE OF THIS AGREEMENT.

 

 

ARTICLE II

DUTIES OF AGENT

          Section 2.01 Equipment Orders.

               (a) Concurrently with issuance by Lessee of a purchase order hereunder with respect to the
Equipment, Lessee shall provide a copy thereof to Lessor. Each purchase order issued by Lessee
pursuant hereto shall comply with the terms and conditions of this Section 2.01.

               (b) Lessee, pursuant to the agency granted to it by Lessor in Article I hereof, may receive,
accept and pay for the Equipment to be leased by Lessor to Lessee pursuant to the Lease. Upon and
as of the date of issuance hereunder by Lessee of a purchase order with respect to the Equipment,
Lessee shall be unconditionally obligated to lease such Equipment from Lessor pursuant to the
terms and conditions of the Lease. Upon and as of the date of acceptance of the Equipment by
Lessee and satisfaction of the conditions precedent provided for herein and in the Lease, Lessor
shall be unconditionally obligated to purchase such Equipment pursuant to the terms of the
applicable purchase order and to lease such Equipment to Lessee pursuant to the terms and
conditions of the Lease.

               (c) Notwithstanding any provision to the contrary herein, Lessee’s ability to act as Lessor’s
agent hereunder, and unconditionally to obligate Lessor to purchase Equipment pursuant to such
agency, shall be limited by the following: (1) Lessee must disclose in writing to all Suppliers
that it is ordering the Equipment as agent for “ BB&T Equipment Finance Corporation or its
nominee”; (2) all of the Equipment ordered and/or accepted hereunder must meet at least one of the
general description categories, and must be within the quantity, specific description,
manufacturers, hard/soft cost allocation, and total cost parameters, contained on Schedule A
attached hereto; (3) with respect to each investor or entity which will be the lessor of such
Equipment, the aggregate Purchase Price for all Equipment purchased in connection with the Lease
(whether such Equipment is on one or more than one Equipment Schedule) must be less than, or equal
to, the Total Invoice Cost specified for such investor or other entity on Schedule A attached
hereto (as amended from time to time); (4) the Equipment must be delivered to, and accepted by,
Lessee on or before the Last Delivery Date specified in Schedule A attached hereto; (5) the
Purchase Price of each item of the Equipment must not be more than the then current fair market
value of such Equipment; and (6) with respect to any documentation, technical or confidential
business information and/or software relating to the Equipment, if applicable (collectively,
“Software”), the purchase order will grant Lessor a license to use the Software and will allow
Lessor to grant a sublicense to Lessee to use such Software pursuant to the Lease and will allow
Lessor to grant a sublicense to a third party after termination or the expiration of the Lease in
the event Lessee does not elect to exercise any purchase option that may be provided for in the
Lease. Lessor may refuse to purchase Equipment pursuant to such agency if Lessor determines, in
its sole discretion, that the foregoing conditions have not been satisfied; and such refusal shall
not constitute a breach by Lessor hereunder or under the Lease.

               (d) Lessee additionally agrees that all purchase orders issued hereunder by Lessee shall: (1)
include the following provisions:

SOLD TO PARTY: All invoices are to show BB&T Equipment Finance Corporation or its
nominee as the “sold to” party.

ASSIGNMENT OF PURCHASE ORDER: The equipment which is the subject of this
Purchase Order is to be acquired by BB&T Equipment Finance Corporation or its
nominee (“BB&T”) for the purpose of leasing it to the customer to whom it is to
be delivered as noted on this Purchase Order (the “Customer”) pursuant to the
terms of a master lease agreement (the “Lease”) between BB&T and the Customer.
If a default under the Lease occurs, or if the equipment is not delivered to
and accepted by the Customer on or before the date specified on the face page
of this Purchase Order, BB&T may assign all rights and obligations of BB&T
hereunder to Customer, and Seller agrees to accept the novation of such
assignment and, upon receipt of notice from BB&T of such assignment, Seller
shall look solely to Customer for performance of the obligations of BB&T
hereunder.

; (2) not permit passage of title to the Equipment earlier than such acceptance by Lessee; (3) not
permit the Supplier or any other person or entity to retain any security interest in, or lien on,
any of the Equipment; and (4) otherwise be on terms and conditions acceptable to Lessor in its sole
discretion. Prior to passage of risk of loss of the Equipment under the

2

 

terms of the Purchase Orders, Lessee shall insure the Equipment, and provide to Lessor evidence of
insurance, in accordance with the provisions of the Lease.

          Section 2.02 Receipt of and Payment for the Equipment. With respect to any purchase order
issued by Lessee pursuant hereto, Lessee agrees to pay and perform all obligations of the
purchaser in the time and manner required thereby. Without limiting the foregoing, upon receipt
and acceptance by Lessee of any Equipment, Lessee shall execute and deliver to Lessor an Equipment
Schedule describing all items of the Equipment so received and accepted by Lessee (together with
evidence of the insurance required by the Lease with respect thereto) and, on behalf of Lessor,
Lessee shall pay the Purchase Price thereof to the Supplier in the time and manner required by the
purchase order. Notwithstanding the foregoing, at the sole discretion of Lessor, Lessor may pay
the Purchase Price directly to the Supplier in the time and manner required by the purchase order
for any Equipment ordered by Lessee as Lessor’s agent under this Agreement. Receipt and acceptance
of any Equipment by Lessee from the Supplier shall be deemed to be an unconditional and
irrevocable acceptance of such Equipment by Lessee for all purposes of the Lease and the
applicable Equipment Schedule.

          Section 2.03 Reimbursement of Purchase Price. Lessee shall present to Lessor documentation
(“Purchase Documentation”), in form and substance satisfactory to Lessor in its sole discretion,
which includes (1) an Equipment Schedule which describes all units of Equipment ordered, received
and accepted by Lessee as agent for Lessor in connection with such Equipment Schedule, (2) an
invoice issued by the Supplier in the name of Lessor stating the Purchase Price of such Equipment,
(3) evidence of the payment of the Purchase Price paid to Supplier for each such unit of Equipment
and of passage of title thereto to Lessor, and (4) confirmation reasonably acceptable to Lessor
that such Equipment has then been placed in service by Lessee pursuant to the Lease. Upon Lessor’s
receipt of the Purchase Documentation on or before the Base Lease Commencement Date by Lessor, if
no Event of Default or event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, has then occurred, Lessor shall reimburse Lessee for the
aggregate Purchase Price paid by Lessee for all Equipment purchased hereunder in connection with
such Equipment Schedule.

          Section 2.04 Books and Records. Lessee shall maintain full and accurate books and records of
all Equipment orders, receipts and payments. All such books and records shall be maintained in a
form acceptable to Lessor in its sole discretion. Such books and records shall be open for
inspection and examination by Lessor and its respective representatives and/or accountants during
Lessee’s normal business hours.

ARTICLE III

TERMINATION

          Section 3.01 Termination.

               (a) So long as no default exists and is continuing hereunder and no Event of Default exists
and is continuing under the Lease, either party may terminate this Agreement at any time upon thirty
(30) days’ prior written notice to the other party.

               (b) In the event Lessee is in default hereunder or an Event of Default has then occurred
under the Lease, Lessor may elect to terminate this Agreement immediately, which shall be
effective upon the receipt of written notice thereof by Lessee. If Lessee invokes the protection
of any bankruptcy or insolvency law, or any such law is invoked against or with respect to Lessee
or its property, without further action this Agreement automatically shall terminate. Upon any
such termination Lessor shall have no continuing obligation under Section 2.03 hereof.

               (c) Any termination under this Section 3.01 automatically shall result in the immediate
revocation of all authority vested in Lessee under this Agreement to order, accept or pay for any
Equipment on behalf of Lessor.

ARTICLE IV

MISCELLANEOUS

          Section 4.01 Choice of Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES

3

 

OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. The parties agree
that any action or proceeding arising out of or relating to this Agreement may be commenced in any
state or Federal court in the City and State of New York, and agree that a summons and complaint
commencing an action or proceeding in any such court shall be properly served and shall confer
personal jurisdiction if served personally or by certified mail to it at its address hereinbelow
set forth, or as it may provide in writing from time to time, or as otherwise provided under the
laws of the State of New York.

          Section 4.02 Entire Agreement. This Agreement, the Lease and the Equipment Schedules
constitute the entire agreement between the parties with respect to the subject matter hereof and
shall not be rescinded, amended or modified in any manner except by a document in writing executed
by both parties.

          Section 4.03 Severability. Any provision of this Agreement which 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 provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

          Section 4.04 Jury Trial Waiver. LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING TO
THIS AGREEMENT. IT IS HEREBY AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL
BY JURY OF ALL CLAIMS AGAINST PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST
PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
MADE BY THE PARTIES AND THE PARTIES HEREBY ACKNOWLEDGE THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR
NULLIFY ITS EFFECT. LESSOR AND LESSEE FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN THE
SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED
OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.

          Section 4.05 Assignment. This Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the parties hereto. This Agreement may not be assigned by any
party without the prior written consent of the other party hereto, which shall not unreasonably be
withheld; provided, however, Lessor shall not be required to obtain such prior consent in
connection with any assignment by Lessor to an assignee of all of Lessor’s rights hereunder with
respect to those certain items of Equipment to be leased under a particular Equipment Schedule
between such assignee, as lessor, and Lessee, as lessee.

          Section 4.06 Notices. All notices and other communications hereunder shall be in writing,
personally delivered, delivered by overnight courier service, sent by facsimile transmission (with
confirmation of receipt), or sent by certified mail, return receipt requested, addressed to the
parties at the respective addresses set forth beneath the signature of such party, or to such
other address as such party shall from time to time designate in writing to the other parties; and
shall be effective from the date of receipt.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

4

 

     IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to
execute and deliver, under seal, this Agency Agreement as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 

	BB&T EQUIPMENT FINANCE CORPORATION	 	 	 	 	 	C&J SPEC-RENT SERVICES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen Gray
	 	[SEAL]
	 	 	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	Name:

	 	 

Stephen Gray
	 	 	 	 	 	Name:
	 	 

Randy McMullen
	 	 
	Title:

	 	Senior Vice President
	 	 	 	 	 	Title:
	 	VP Finance	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	600 Washington Avenue
Suite 201	 	 	 	 	 	500 N. Shoreline
Suite 350	 	 
	 	 	Towson, Maryland 21204	 	 	 	 	 	Corpus Christi, TX 78401	 	 
	 

	 	Facsimile: 410-825-1691	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	C&J ENERGY SERVICES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	 

	 	 	 	 	 	 	 	Name:
	 	 

Randy McMullen
	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	VP Finance	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	500 N. Shoreline	 	 
	 	 	 	 	 	 	 	 	Suite 350	 	 
	 	 	 	 	 	 	 	 	Corpus Christi, TX 78401	 	 

5

 

SCHEDULE A TO

AGENCY AGREEMENT

Description of Equipment: Frac Trailers and Trailers with trailer mounted frac pumps as more
fully described on the attached

Equipment Parameters: See attachments

Aggregate Total Invoice Cost: $7,700,000.00 (investor break out shown below)

BBTEF: $5,200,000.00

Total Invoice Cost for Wells Fargo Equipment Finance, Inc.: $2,500,000.00

Last Delivery Date: July 31, 2010exv10w5

Exhibit 10.5

AIG COMMERCIAL EQUIPMENT FINANCE, INC.

MASTER OPERATING LEASE AGREEMENT

     THIS MASTER OPERATING LEASE AGREEMENT (this “Lease”) is made as of July 21, 2010, between AIG
COMMERCIAL EQUIPMENT FINANCE, INC its successors and assigns (“Lessor”), and C&J SPEC-RENT
SERVICES, INC and C&J ENERGY SERVICES, INC, their successors and permitted assigns, jointly and
severally (collectively “Lessee”)

     Lessee desires to lease from Lessor the equipment and other property (the “Equipment”)
described in each Equipment Schedule executed pursuant to this Lease (each, a “Schedule”)
incorporating by reference the terms and conditions of this Lease (the term “Lease” shall also
include any Riders to this Lease entered into with respect to such Schedule) Certain definitions
and construction of certain of the terms used in this Lease are provided in Section 19 hereof

          For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged the parties to this Lease agree as follows

1 AGREEMENT TO LEASE; TERM This Lease is effective as of the date specified above By entering
into a
Schedule, Lessor leases the Equipment described therein to Lessee, and Lessee leases such
Equipment from Lessor, in each case, subject to the terms and conditions in this Lease and such
Schedule and all of the other documents and agreements executed in connection herewith
(collectively the “Lease Documents”) Each Schedule, incorporating the terms and conditions of this
Lease, will constitute a separate instrument of lease The term of lease with respect to each item
of Equipment leased under a Schedule shall commence on the date of execution of such Schedule and
continue for the term provided in that Schedule

2 RENT Lessee shall pay Lessor (a) the rental installments
(“Basic Rent”) as and when specified
in each Schedule without demand, and (b) all of the other amounts payable in accordance with this
Lease, such Schedule and/or any of the other Lease Documents (“Other Payments”, and together with
the Basic Rent, collectively, the “Rent”) Upon Lessee’s execution thereof, except as expressly
stated in the Lease Documents the related Schedule shall constitute a non-cancelable net lease, and
Lessee’s obligation to pay Rent, and otherwise to perform its obligations under or with respect to
such Schedule and all of the other Lease Documents, are and shall be absolute and unconditional and
shall not be affected by any circumstances whatsoever, including any right of setoff, counterclaim,
recoupment, deduction, defense or other right which Lessee may have against Lessor, the
manufacturer or vendor of the Equipment (the “Suppliers”), or anyone else, for any reason
whatsoever (each, an “Abatement”) Lessee agrees that all Rent shall be paid in accordance with
Lessor’s or Assignee’s written direction Time is of the essence If any Rent is not paid within five
(5) days of the due date, Lessee shall pay a late charge equal to five (5) percent of the amount in
arrears

3 REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE Lessee represents, warrants and agrees
that, as of the effective date of this Lease and of each Schedule (a) Lessee has the form of
business organization indicated, and is and will remain duly organized and existing in good
standing under the laws of the state specified, under Lessee’s signature and is duly qualified to
do business wherever necessary to perform its obligations under the Lease Documents, including each
jurisdiction in which the Equipment is or will be located Lessee’s legal name is as shown in the
preamble of this Lease, and Lessee’s Federal Employer Identification Number and organizational
number are as set forth under Lessee’s signature Except as has been disclosed to Lessor in writing,
within the previous six (6) years, Lessee has not changed its name, done business under any other
name, or merged or been the surviving entity of any merger, except as disclosed to Lessor in writing
(b) The Lease Documents (1) have been duly authorized by all necessary action consistent with
Lessee’s form of organization, (2) do not require the approval of, or giving notice to, any
governmental authority, (3) do not contravene or constitute a default under any applicable law,
Lessee’s organizational documents, or any agreement, indenture or other instrument to which Lessee
is a party or by which it may be bound, and (4) constitute legal, valid and binding obligations of
Lessee enforceable against Lessee, in accordance with the terms thereof (c) There are no pending
actions or proceedings to which Lessee is a party, and there are no other pending or threatened
actions or proceedings of which Lessee has knowledge, before any court, arbitrator or
administrative agency, which, either individually or in the aggregate, would have a Material
Adverse Effect As used herein, “Material Adverse Effect” shall mean (i) a materially adverse effect
on the business, condition (financial or otherwise), operations performance or properties of Lessee
which materially impairs Lessee’s ability to pay its debts as they come due or on Lessor’s rights
and remedies under this Lease or (II) a material impairment of the ability of Lessee to perform its
obligations under or remain in compliance with such

 

Schedule or any of the other Lease Documents. Further, Lessee is not in default under any
financial or other material agreement that, either individually, or in the aggregate, would have a
Material Adverse Effect, (d) All of the Equipment covered by such Schedule is located solely in the
jurisdiction(s) specified in such Schedule, (e) Under the applicable laws of each such
jurisdiction, such Equipment consists (and shall continue to consist) solely of personal property
and not fixtures. Such Equipment is removable from and is not essential to the premises at which it
is located, (f) The financial statements of Lessee (copies of which have been furnished to Lessor)
have been prepared in accordance with generally accepted accounting principles consistently applied
(“GAAP”), and fairly present Lessee’s financial condition and the results of its operations as of
the date of and for the period covered by such statements, and since the date of such statements
there has been no change which would have a Material Adverse Effect on such conditions or
operations, (g) With respect to any Collateral, Lessee has good title to, rights in, and/or power
to transfer all of the same, (h) The Supplier is not an affiliate of Lessee, (i) The Supply
Contract (as such term is hereinafter defined) represents an arms’ length transaction and the
purchase price for the Equipment specified therein is the amount obtainable in an arms’ length
transaction between a willing and informed buyer and a willing and informed seller under no
compulsion to sell.

4. FURTHER ASSURANCES AND OTHER COVENANTS. Lessee agrees as follows: (a) Lessee will furnish
Lessor with (1) Lessee’s balance sheet, statement of income and statement of retained earnings,
prepared in accordance with GAAP, audited by a recognized firm of certified public accountants,
within one hundred twenty (120) days of the close of each fiscal year of Lessee, (2) Lessee’s
quarterly financial report certified by the chief financial officer of Lessee, within sixty (60)
days of the close of each fiscal quarter of Lessee, and (3) all of Lessee’s Forms 10-K and 10-Q, if
any, filed with the Securities and Exchange Commission (“SEC”) as and when filed (by furnishing
these SEC forms, or making them publicly available in electronic form, in each case, within the
time periods set forth in clauses (1) and (2), Lessee shall be deemed to have satisfied the
requirements of clauses (1), (2) and (3)). (b) Lessee shall obtain and deliver to Lessor and/or
promptly execute or otherwise authenticate any documents, filings, waivers (including any landlord
and mortgagee waivers), releases and other records, and will take such further action as Lessor may
reasonably request in furtherance of Lessor’s rights under any of the Lease Documents (provided,
however, that Lessee will not be required to provide any opinions from legal counsel or take other
action which would result in substantial cost to Lessee). Lessee irrevocably authorizes Lessor to
file UCC financing statements (“UCCs”), and other filings with respect to the Equipment or any
Collateral. Without Lessor’s prior written consent, Lessee agrees not to file any corrective or
termination statements or partial releases with respect to any UCCs filed by Lessor pursuant to
this Lease, (c) Lessee shall provide written notice to Lessor: (1) thirty (30) days prior to any
change in Lessee’s name or jurisdiction or form of organization; (2) promptly upon the occurrence
of any Event of Default (as defined in Section 15) or event which, with the lapse of time or the
giving of notice, or both, would become an Event of Default (a “Default”); and (3) promptly upon
Lessee becoming aware of any alleged violation of applicable law relating to the Equipment or this
Lease, (d) Lessee has been advised by Lessor that the USA Patriot Act establishes minimum standards
of account information to be collected and maintained by Lessor, and that to help the government
fight the funding of terrorism and money laundering activities, Federal law requires all financial
institutions to obtain, verify and record information that identifies each person who opens an
account; and specifically, this means that when Lessee executes this Lease, Lessor may ask for
Lessee’s name and address, the date of birth of the officers executing this Lease, and other
information that will allow Lessor to identify Lessee; and that Lessor may also ask to see the
driver’s license or other identifying documents of the officers of Lessee executing this Lease, (e)
Lessee is and will remain in full compliance with all applicable laws including, without
limitation, (i) ensuring that no person who owns a controlling interest in or otherwise controls
Lessee is or shall be (A) listed on the Specially Designated Nationals and Blocked Person List
maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any
other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or
regulation, or (B) a person designated under Sections 1(b), (c) or (d) of Executive Order No. 13224
(September 23, 2001), any related enabling legislation or any other similar Executive Orders, and
(ii) compliance with all applicable Bank Secrecy Act (“BSA”) laws, regulations and government
guidance on BSA compliance and on the prevention and detection of money laundering violations.

5. CONDITIONS PRECEDENT. Lessor’s agreement to purchase and lease any Equipment under a
Schedule, is conditioned upon Lessor’s determination that all of the following have been satisfied:
(a) Lessor having received the following, in form and substance reasonably satisfactory to Lessor:
(1) evidence as to due compliance with the insurance provisions of Section 11; (2) if requested,
lien searches in the jurisdiction of Lessee’s organization, and wherever else Lessor deems
appropriate; (3) UCCs, real property waivers and all other filings required by Lessor; (4) a
certificate of an appropriate officer of Lessee certifying: (A) resolutions duly authorizing the
transactions contemplated in the applicable Lease Documents, and (B) the incumbency and signature
of the officers of Lessee authorized to execute such documents; (5) the only manually executed
original of the Schedule, and counterpart originals of all other Lease Documents; (6) all purchase
documents pertaining to the Equipment (collectively, the “Supply Contract”); (7) if requested by
Lessor, good standing certificates from the jurisdiction of Lessee’s organization and the location
of the Equipment, and evidence of Lessee’s organizational number; and (8) such other documents,
agreements, instruments, certificates and assurances (other than legal opinions), as Lessor
reasonably may require consistent with the terms and conditions of the

2

 

Lease Documents, (b) All representations and warranties provided by Lessee in favor of Lessor
in any of the Lease Documents shall be true and correct in all material respects on the effective
date of the related Schedule (Lessee’s execution and delivery of the Schedule shall constitute
Lessee’s acknowledgment of the same), (c) There shall be no Default or Event of Default under the
Schedule or any other Lease Documents, (d) The Equipment shall have been delivered to and accepted
by Lessee, as evidenced by the Schedule, and shall be in the condition and repair required hereby;
and on the effective date of such Schedule Lessor shall have received good title to the Equipment
described therein, free and clear of any claims, liens, attachments, rights of others and legal
processes (“Liens”), (e) No event shall have occurred which would have a Material Adverse Effect
with respect to Lessee.

6. ACCEPTANCE UNDER LEASE. Upon delivery, Lessee shall inspect and, if conforming to the condition
required by the applicable Supply Contract, accept the Equipment and execute and deliver to Lessor
a Schedule describing such Equipment. The Schedule will evidence Lessee’s unconditional and
irrevocable acceptance under the Schedule of the Equipment described therein. However, if Lessee
fails to accept delivery of any item of the Equipment, or accepts such Equipment but fails to
satisfy any or all of the other conditions set forth in Section 5, Lessor shall have no obligation
to purchase or lease such Equipment. Lessor will cooperate with Lessee (at Lessee’s expense) to
assign to Lessee all of Lessor’s rights with respect to such equipment. In such event, Lessor’s
rights shall include, among other things, the right to demand that Lessee (a) fully assume all
obligations as purchaser of the Equipment, with the effect of causing Lessor to be released from
any liability relating thereto, (b) immediately remit to Lessor an amount sufficient to reimburse
it for all advance payments, costs, taxes or other charges paid or incurred with respect to the
Equipment (including any of such amounts paid by Lessor to Supplier under the Supply Contract or as
a reimbursement to Lessee), together with interest at the Default Rate accruing from the date or
dates such amounts were paid by Lessor until indefeasibly repaid by Lessee in full, and (c) take
all other actions necessary to accomplish such assumption.

7. USE AND MAINTENANCE. (a) Lessee shall (1) use the Equipment solely in the continental United
States and in the conduct of its business, for the purpose for which the Equipment was designed, in
a careful and proper manner, and shall not permanently discontinue use of the Equipment; (2)
operate, maintain, service and repair the Equipment, and maintain all records and other materials
relating thereto, (A) in accordance and consistent with (i) the Supplier’s recommendations and all
maintenance and operating manuals or service agreements, whenever furnished or entered into,
including any subsequent amendments or replacements thereof, issued by the Supplier or service
provider, (ii) the requirements of all applicable insurance policies, (iii) the Supply Contract, so
as to preserve all of Lessee’s and Lessor’s rights thereunder, including all rights to any
warranties, indemnities or other rights or remedies, (iv) all applicable laws, and (v) the prudent
practice of other similar companies in the same business as Lessee, but in any event, to no lesser
standard than that employed by Lessee for comparable equipment owned or leased by it; and (B)
without limiting the foregoing, so as to cause the Equipment to be in good repair and operating
condition and in at least the same condition as when delivered to Lessee hereunder, except for
ordinary wear and tear resulting despite Lessee’s full compliance with the terms hereof; (3)
provide written notice to Lessor not less than thirty (30) days after any change of the location of
any Equipment (or the location of the principal garage of any Equipment, to the extent that such
Equipment is mobile equipment) as specified in the Schedule; and (4) not attach or incorporate the
Equipment to or in any other property in such a manner that the Equipment may be deemed to have
become an accession to or a part of such other property, (b) Within a reasonable time, Lessee will
replace any parts of the Equipment which become worn out, lost, destroyed, damaged beyond repair or
otherwise unfit for use, by new or reconditioned replacement parts which are free and clear of all
Liens and have a value, utility and remaining useful life at least equal to the parts replaced
(assuming that they were in the condition required by this Lease). Any modification or addition to
the Equipment that is required by this Lease shall be made by Lessee. Title to all such parts,
modifications and additions to the Equipment immediately shall vest in Lessor, without any further
action by Lessor or any other person, and they shall be deemed incorporated in the Equipment for
all purposes of the related Schedule. Unless replaced in accordance with this Section, Lessee shall
not remove any parts originally or from time to time attached to the Equipment, if such parts are
essential to the operation of the Equipment, are required by any other provision of this Lease or
cannot be detached from the Equipment without materially interfering with the operation of the
Equipment or adversely affecting the value, utility and remaining useful life which the Equipment
would have had without the addition of such parts. Except as permitted in this Section, Lessee
shall not make any material alterations to the Equipment, (c) Upon forty-eight (48) hours’ notice,
Lessee shall afford Lessor and/or its designated representatives access to the premises where the
Equipment is located for the purpose of inspecting such Equipment and all applicable maintenance or
other records relating thereto at any reasonable time during normal business hours; provided,
however, if a Default or Event of Default shall have occurred and then be continuing, no notice of
any inspection by Lessor shall be required. If any discrepancies are found as they pertain to the
general condition of the Equipment, Lessor will communicate these discrepancies to Lessee in
writing. Lessee shall then have thirty (30) days to rectify these discrepancies at its sole
expense. Lessee shall pay all expenses of a re-inspection by Lessor’s appointed representative, if
corrective measures were required.

3

 

8. DISCLAIMER; QUIET ENJOYMENT, (a) THE EQUIPMENT IS LEASED HEREUNDER “AS IS, WHERE IS”.
LESSOR SHALL NOT BE DEEMED TO HAVE MADE, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY,
EITHER EXPRESS OR IMPLIED, AS TO THE EQUIPMENT, INCLUDING ANY PART, OR ANY MATTER WHATSOEVER,
INCLUDING, AS TO EACH ITEM OF EQUIPMENT, ITS DESIGN, CONDITION, MERCHANTABILITY, FITNESS FOR ANY
PARTICULAR PURPOSE, TITLE, ABSENCE OF ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR LATENT
DEFECT (WHETHER OR NOT DISCOVERABLE BY LESSEE), COMPLIANCE OF SUCH ITEM WITH ANY APPLICABLE LAW,
CONFORMITY OF SUCH ITEM TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE DOCUMENT OR TO THE
DESCRIPTION SET FORTH IN THE RELATED SCHEDULE OR ANY OF THE OTHER LEASE DOCUMENTS, OR ANY
INTERFERENCE OR INFRINGEMENT (EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8(b)), OR ARISING FROM ANY
COURSE OF DEALING OR USAGE OF TRADE, NOR SHALL LESSOR BE LIABLE, FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY IN TORT; AND LESSEE HEREBY
WAIVES ANY CLAIMS ARISING OUT OF ANY OF THE FOREGOING. Without limiting the foregoing, Lessor will
not be responsible to Lessee or any other person with respect to, and Lessee agrees to bear sole
responsibility for, any risk or other matter that is the subject of Lessor’s disclaimer; and
Lessor’s agreement to enter into this Lease and any Schedule is in reliance upon the freedom from
and complete negation of liability or responsibility for the matters so waived or disclaimed herein
or covered by the indemnity in this Lease. So long as no Event of Default has occurred, Lessee may
exercise Lessor’s rights, if any, under any warranty, guaranty, indemnity or similar obligation
from the Supplier with respect to the Equipment; and Lessor, at Lessee’s expense, will execute such
documents as Lessee may reasonably request with respect to or in connection with any such
enforcement with respect to the Equipment. Lessee’s exercise of such rights shall be at its sole
risk, shall not result in any prejudice to Lessor, and may be exercised only during the term of the
related Schedule. Lessee shall not attempt to enforce any such warranty, guaranty, indemnity or
similar obligation from the Supplier with respect to the Equipment by legal proceeding without
Lessor’s prior written approval (which approval shall not unreasonably be withheld or delayed), (b)
Lessor warrants that during the term of each Schedule, so long as no Event of Default has occurred,
Lessee’s possession and use of the Equipment leased thereunder shall not be interfered with by
Lessor or anyone rightfully claiming an interest through Lessor. The preceding warranty is in lieu
of all other warranties by Lessor, whether written, oral or implied, with respect to this Lease or
the Equipment. Any actual or purported breach of this warranty shall not give rise to any
Abatement, but Lessee may bring a direct cause of action against Lessor for any actual damages
directly resulting from any such breach. NEITHER LESSOR NOR LESSEE SHALL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES IN CONNECTION HEREWITH (EXCEPT AS AND TO THE
EXTENT AWARDED AS PART OF THE DAMAGES CONSTITUTING A CLAIM WITHIN THE SCOPE OF SECTION 14(b)
HEREOF).

9. FEES AND TAXES. Lessee agrees to: (a) (1) if permitted by law, file in Lessee’s own name or
on Lessor’s behalf, directly with all appropriate taxing authorities all declarations, returns,
inventories and other documentation with respect to any personal property taxes (or any other taxes
in the nature of or imposed in lieu of property taxes) due or to become due with respect to the
Equipment, and if not so permitted by law, to promptly notify Lessor and provide it with all
information required in order for Lessor to timely file all such declarations, returns,
inventories, or other documentation, and (2) pay on or before the date when due all such taxes
assessed, billed or otherwise payable with respect to the Equipment directly to the appropriate
taxing authorities; (b) (1) pay before past due as requested by Lessor, and (2) defend and
indemnify Lessor on a net after-tax basis against liability for all license and/or registration
fees, assessments, and sales, use, property, excise, value added and other similar taxes or other
charges or fees now or hereafter imposed by any governmental body or agency upon the Equipment or
with respect to the manufacture, shipment, purchase, ownership, delivery, installation, leasing,
operation, possession, use, return, or other disposition thereof or the Rent hereunder (other than
taxes on or measured solely by the net income of Lessor (except as and to the extent expressly
addressed in Section 14(b) hereof), franchise taxes, taxes based on Lessor’s authority to do
business in a particular jurisdiction, and similar taxes); and (c) indemnify Lessor against any
penalties, charges, interest or costs imposed with respect to any items referred to in clauses (a)
and (b) above (the items referred to in clauses (a), (b), and (c) above being referred to herein as
“Impositions”). Any Impositions which are not paid before past due and which are paid by Lessor
shall, at Lessor’s option, become immediately due from Lessee to Lessor.

10. TITLE; GRANTING CLAUSE. (a) Lessee and Lessor intend that: (1) each Schedule,
incorporating by reference the terms of this Lease, constitutes a true “lease” and a “finance
lease” as such terms are defined in Article 2A and not a sale or retention of a security interest;
and (2) Lessor is and shall remain the owner of each item of Equipment (unless sold by Lessor
pursuant to any Lease Document), and Lessee shall not acquire any right, title or interest in or to
such Equipment except the right to use it in accordance with the terms of the related Schedule, (b)
In order to secure the prompt payment of the Rent and all of the other amounts from time to time
outstanding with respect hereto and to each Schedule, and the performance and observance by Lessee
of all of the provisions hereof and thereof and of all of the other Lease Documents, Lessee hereby
collaterally assigns, grants, and conveys to Lessor, a security interest in and lien on all of
Lessee’s right, title and interest in and to all of the following (whether now existing or
hereafter created, and including any other collateral described on any rider hereto; the
“Collateral”): (1) (if contrary to the parties’ intentions a court determines

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that such Schedule is not a true “lease” under the UCC) the Equipment described in such Schedule or
otherwise covered thereby (including all inventory, fixtures or other property comprising the
Equipment), together with all related software (embedded therein or otherwise) and general
intangibles, all additions, attachments, accessories and accessions thereto whether or not
furnished by the Supplier; (2) all subleases and payments becoming due thereunder, chattel paper,
security deposits, and general intangibles relating thereto, and any and all substitutions,
replacements or exchanges for any such item of Equipment or other collateral, in each such case in
which Lessee shall from time to time acquire an interest; and (3) any and all insurance and/or
other proceeds of the property and other collateral in and against which a security interest is
granted hereunder. The collateral assignment, security interest and lien granted herein shall
survive the termination, cancellation or expiration of each Schedule until such time as Lessee’s
obligations thereunder and under the other Lease Documents are fully and indefeasibly discharged,
(c) If contrary to the parties’ intentions a court determines that any Schedule is not a true
“lease”, the parties agree that in such event Lessee agrees that: (1) with respect to the
Equipment, in addition to all of the other rights and remedies available to Lessor hereunder upon
the occurrence of an Event of Default, Lessor shall have all of the rights and remedies of a first
priority secured party under the UCC; and (2) any obligation to pay Basic Rent or any Other
Payment, to the extent constituting the payment of interest, shall be at an interest rate that is
equal to the lesser of the maximum lawful rate permitted by applicable law or the effective
interest rate used by Lessor in calculating such amounts.

11. INSURANCE. Upon acceptance under a Schedule, until the Equipment is returned to Lessor in
accordance with this Lease, Lessee shall maintain all-risk insurance coverage with respect to the
Equipment insuring against, among other things: (a) any casualty to the Equipment (or any portion
thereof), including loss or damage due to fire and the risks normally included in extended
coverage, malicious mischief and vandalism, for not less than the full replacement value of the
Equipment; and (b) any commercial liability arising in connection with the Equipment, including
both bodily injury and property damage with a combined single limit per occurrence of not less than
the amount specified in the Schedule; having a deductible as specified in the applicable Schedule
or (if not so specified) then as reasonably satisfactory to Lessor. The required insurance policies
(including endorsements) shall (i) be in form and amount reasonably satisfactory to Lessor, and
written by insurers of recognized reputation and responsibility satisfactory to Lessor (but such
insurer shall carry a current rating by A.M. Best Company of at least “A” for a general
policyholder and a financial rating of at least “VIII”), (ii) be endorsed to name Lessor as an
additional insured (but without responsibility for premiums), (iii) provide that any amount payable
under the required casualty coverage shall be paid directly to Lessor as sole loss payee, and (iv)
provide for thirty (30) days’ written notice by such insurer of cancellation, material change, or
non-renewal.

12. LOSS AND DAMAGE. (a) At all times until the Equipment is returned to Lessor in accordance
with this Lease, Lessee shall bear the risk of loss, theft, confiscation, taking, unavailability,
damage or partial destruction of the Equipment and shall not be released from its obligations under
any Schedule or other Lease Document in any such event, (b) Lessee shall provide prompt written
notice to Lessor of any Total Loss or any material damage to the Equipment. Any such notice must be
provided together with any damage reports provided to any governmental authority, the insurer or
Supplier, and any documents pertaining to the repair of such damage, including copies of work
orders, and all invoices for related charges, (c) Without limiting any other provision hereof,
Lessee shall repair all damage to any item of Equipment from any and all causes, other than a Total
Loss, so as to cause it to be in the condition and repair required by this Lease, (d) A “Total
Loss” shall be deemed to have occurred to an item of Equipment upon: (1) the actual or constructive
total loss of any item of the Equipment, (2) the loss, disappearance, theft or destruction of any
item of the Equipment, or damage to any item of the Equipment that is uneconomical to repair or
renders it unfit for normal use, or (3) the condemnation, confiscation, requisition, seizure,
forfeiture or other taking of title to or use of any item of the Equipment or the imposition of any
Lien thereon by any governmental authority. On the next rent payment date following a Total Loss (a
“Loss Payment Date”), Lessee shall pay to Lessor the Basic Rent due on that date plus the
Stipulated Loss Value of the item or items of the Equipment with respect to which the Total Loss
has occurred (the “Lost Equipment”), together with any Other Payments due hereunder with respect to
the Lost Equipment. Upon making such payment, (i) Lessee’s obligation to pay future Basic Rent
shall terminate solely with respect to the items of Lost Equipment so paid for, but Lessee shall
remain liable for, and pay as and when due, all Other Payments, and (ii) Lessor shall convey to
Lessee all of Lessor’s right, title and interest in the Lost Equipment, “AS IS WHERE IS”, but
subject to the requirements of any third party insurance carrier in order to settle an insurance
claim. As used in this Lease, “Stipulated Loss Value” shall mean the product of the Total Invoice
Cost of the Lost Equipment, times the percentage factor applicable to the Loss Payment Date, as set
forth in the Schedule of Stipulated Loss Values incorporated in such Schedule. After the final rent
payment date of the original term of a Schedule, the Stipulated Loss Value shall be determined as
of the last rent payment date during the original term of such Schedule, and the applicable
percentage factor shall be the last percentage factor set forth in the Schedule of Stipulated Loss
Values incorporated in such Schedule. If Lessee exercises its option to renew the term of a
Schedule, the Stipulated Loss Value applicable during such renewal term shall be determined by
mutual agreement of Lessor and Lessee as evidenced by an amended Schedule of Stipulated Loss Values
to be incorporated in such Schedule, (e) Lessor shall be under no duty to Lessee to pursue any
claim against any person in connection with a Total Loss or other loss or damage but upon request
from Lessee, Lessor shall assign to Lessee all of Lessor’s right, title and interest in any such
claim (subject

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to the requirements of any third party insurance carrier in order to settle an insurance claim
relating thereto) (f) If Lessor receives a payment under an insurance policy required under this
Lease in connection with any Total Loss or other loss of or damage to an item of Equipment, and
such payment is both unconditional and indefeasible, then provided Lessee shall have complied with
the applicable provisions of this Section, Lessor shall either (1) if received pursuant to a Total
Loss remit such proceeds to Lessee up to an amount equal to the amount paid by Lessee to Lessor as
the Stipulated Loss Value, or credit such proceeds against any amounts owed by Lessee pursuant to
Section 12(d), or (2) if received with respect to repairs made pursuant to Section 12(c), remit
such proceeds to Lessee up to an amount equal to the amount of the costs of repair actually
incurred by Lessee, as established to Lessor’s satisfaction

13 SURRENDER (a) Lessee shall provide written notice to Lessor not less than one hundred
eighty (180) days and not more than two hundred forty (240) days prior to the expiration of the
term of any Schedule (or of any renewal thereof, if applicable) of Lessee’s intent to surrender the
Equipment described on such Schedule to Lessor upon the expiration of the term of such Schedule IF
LESSEE FAILS TO PROVIDE THE FOREGOING NOTICE IN A TIMELY MANNER, THE TERM OF THE APPLICABLE
SCHEDULE AUTOMATICALLY SHALL BE DEEMED TO HAVE BEEN EXTENDED, WHICH EXTENSION SHALL CONTINUE UNTIL
ONE HUNDRED EIGHTY (180) DAYS AFTER THE DATE ON WHICH LESSEE PROVIDES THE REQUIRED NOTICE, DURING
WHICH EXTENSION PERIOD LESSEE SHALL CONTINUE TO PAY TO LESSOR PER DIEM RENT AT THE U\ST PREVAILING
LEASE RATE UNDER THE APPLICABLE SCHEDULE, provided, however that Lessor may elect to terminate such
extension at any time upon ten (10) days written notice to Lessee During such extension period, the
terms and conditions of this Lease (including, without limitation, the provisions of this Section
13) shall continue to be applicable Solely for purposes of the definition of Stipulated Loss Value
in Section 12(d) hereof any such extension shall be deemed a renewal of the term of such Schedule
(b) Upon the expiration or earlier cancellation or termination of any Schedule, Lessee shall
surrender and make available at Lessee s site in Corpus Christi Texas, for pickup by Lessor the
Equipment described on such Schedule free and clear of all Liens whatsoever Upon surrender, such
Equipment shall be (i) in the same condition as when delivered to Lessee under the related
Schedule, ordinary wear and tear excepted, (n) mechanically and structurally sound, capable of
performing the functions for which such Equipment was originally designed, in accordance with the
Suppliers published and recommended specifications (as applicable), (m) with all component parts in
good operating condition (and all components must meet or exceed the Supplier’s minimum recommended
specifications unless otherwise agreed by Lessor in writing), (iv) with all software and
documentation necessary for the operation of such Equipment for the performance of the functions
for which such Equipment was originally designed (whether or not such software is embedded in or
otherwise is a part of such Equipment), and (v) cleaned and cosmetically acceptable, with all
Lessee-installed markings removed and all rust, corrosion or other contamination having been
removed or properly treated, and in such condition so that it may be immediately installed and
placed in service by a third party Upon surrender, such Equipment shall be in compliance with all
applicable Federal, state and local laws and health and safety guidelines Lessee shall be
responsible for the cost of all repairs, alterations, inspections, appraisals, storage charges,
insurance costs, demonstration costs and other related costs necessary to cause such Equipment to
be in full compliance with the terms of this Lease (c) If requested by Lessor, Lessee shall also
surrender all related records and other data in Lessee’s possession or control to Lessor, including
all records of maintenance, modifications, additions and major repairs, computerized maintenance
history, and any maintenance and repair manuals (collectively, the “Records”) All manuals or other
documents surrendered to Lessor that are subject to periodic revision will be fully up-to-date and
current to the latest revision standard of any particular manual or document received by Lessee In
the event any such Records are missing or incomplete, Lessor shall have the right to cause the same
to be reconstructed at Lessee’s expense (d) In addition to Lessor’s other rights and remedies
hereunder, if such Equipment and the related Records are not surrendered in a timely fashion, or if
repairs are necessary to place any item of Equipment in the condition required in this Section,
Lessee shall (i) continue to pay to Lessor per diem rent at the last prevailing lease rate under
the applicable Schedule with respect to such item of Equipment, for the period of delay in
surrender, and/or for the period of time reasonably necessary to accomplish such repairs, and (n)
pay to Lessor an amount equal to the aggregate cost of any such repairs Lessor’s acceptance of such
rent on account of such delay and/or repair does not constitute an extension or renewal of the term
of the related Schedule or a waiver of Lessor’s right to prompt surrender of such Equipment in
proper condition Such amount shall be payable upon the earlier of Lessor’s demand or the surrender
of such Equipment in accordance with this Lease (e) Without limiting any other terms or conditions
of this Lease, the provisions of this Section are of the essence of each Schedule, and upon
application to any court of equity having jurisdiction, Lessor shall be entitled to a decree against
Lessee requiring Lessee’s specific performance of its agreements in this Section

14 INDEMNITY (a) General Lessee shall indemnify, defend and keep harmless Lessor and any
Assignee (as defined in Section 17) and their respective agents and employees (each, an
“Indemnitee”) from and against any and all Claims (other than such as may directly and proximately
result from the actual, but not imputed, negligence or willful misconduct of such Indemnitee), by
paying, on a net after-tax basis, or otherwise discharging same, when and as such Claims shall
become due Lessee agrees that the indemnity provided for in this Section includes the agreement by
Lessee to indemnify each Indemnitee with respect to Claims for which such Indemnitee is strictly
liable Lessor shall give Lessee

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prompt notice of any Claim hereby indemnified against and Lessee shall be entitled to control
the defense of and/or to settle any Claim, in each case, so long as (1) no Default or Event of
Default has occurred and is then continuing, (2) Lessee confirms, in writing, its unconditional and
irrevocable commitment to indemnify each Indemnitee with respect to such Claim, (3) Lessee is
financially capable of satisfying its obligations under this Section, (4) Lessor approves the
defense counsel selected by Lessee (such approval not to be unreasonably withheld or delayed), and
(5) there is no reasonable risk of criminal liability being imposed on Lessor or any of its
directors, officers or employees as a result of such Claim. The term “Claims” shall mean all
claims, allegations, harms, judgments, settlements, suits, actions, debts, obligations, damages to
third parties (whether incidental, consequential or direct), demands (for compensation,
indemnification, reimbursement or otherwise), losses, penalties, fines, liabilities (including
strict liability), charges that Lessor has incurred or for which it is responsible, in the nature
of interest, Liens, and costs (including attorneys’ fees and disbursements and any other legal or
non-legal expenses of investigation or defense of any Claim, whether or not such Claim is
ultimately defeated or enforcing the rights, remedies or indemnities provided for hereunder, or
otherwise available at law or equity to Lessor), of whatever kind or nature, contingent or
otherwise, matured or unmatured, foreseeable or unforeseeable, by or against any person, arising on
account of (A) any Lease Document, including the performance, breach (including any Default or
Event of Default) or enforcement of any of the terms thereof, or (B) the Equipment, or any part or
other contents thereof, any substance at any time contained therein or emitted therefrom, including
any hazardous substances, or the premises at which the Equipment may be located from time to time,
or (C) the ordering, acquisition, delivery, installation or rejection of the Equipment, the
possession of any property to which it may be attached from time to time, maintenance, use,
condition, ownership or operation of any item of Equipment, and by whomsoever owned, used,
possessed or operated, during the term of any Schedule with respect to that item of Equipment, the
existence of latent and other defects (whether or not discoverable by Lessor or Lessee) any claim
in tort for negligence (other than from the actual, but not imputed, negligence or willful
misconduct of such Indemnitee) or strict liability, and any claim for patent, trademark or
copyright infringement, or the loss, damage, destruction, theft, removal, return, surrender, sale
or other disposition of the Equipment, or any item thereof, including, Claims involving or alleging
environmental damage, or any criminal or terrorist act, or for whatever other reason whatsoever. If
any Claim is made against Lessee or an Indemnitee, the party receiving notice of such Claim shall
promptly notify the other, but the failure of the party receiving notice to so notify the other
shall not relieve Lessee of any obligation hereunder.

     (b) Tax Indemnity. (1) Lessee represents and warrants that: (A) it believes that it is
reasonable to estimate that the useful life of the Equipment exceeds the lease term (including any
interim and fixed rental renewal periods) by the greater of one (1) year or twenty (20) percent of
such estimated useful life, and that said Equipment will have a value at the end of the lease term,
including any fixed rate renewal period, of at least twenty (20) percent of the Total Invoice Cost
of the Equipment, without including in such value any increase or decrease for inflation or
deflation during the original lease term; and (B) the Equipment is, and will be used by Lessee so
as to remain, property eligible for the MACRS Deductions (as defined below).

          (2) If (A) Lessor in computing its taxable income or liability for tax, shall lose, or shall
not have, or shall lose the right to claim or there shall be disallowed or recaptured for Federal
and/or state income tax purposes, in whole or in part, the benefit of MACRS Deductions; or (B)
Lessor shall become liable for additional tax as a result of Lessee having added an attachment or
made an alteration to the Equipment, including (without limitation) any such attachment or
alteration which would increase the productivity or capability of the Equipment so as to violate
the provisions of Rev. Proc. 2001-28, 2001-1 C.B. 1156 (as it may hereafter be modified or
superseded); or (C) the statutory full-year marginal Federal tax rate (including any surcharge) for
corporations is other than thirty-five (35) percent; hereinafter referred to as a “Loss”; then
Lessee shall pay Lessor the Tax Indemnification Payment as additional rent and Lessor shall revise
the Schedule(s) of Stipulated Loss Values to reflect the Loss. As used herein, “MACRS Deductions”
shall mean the deductions under Section 167 of the Internal Revenue Code of 1986, as now or
hereafter amended (the “Code”), determined in accordance with the modified Accelerated Cost
Recovery System with respect to the Total Invoice Cost of any item of the Equipment using the
accelerated method set forth in Section 168(b)(1) or 168(b)(2) of the Code as in effect on the date
of this Lease for property assigned to the class of property specified in the Schedule pertaining
thereto; “Lessor” shall be deemed to include the consolidated Federal taxpayer group of which
Lessor is a member; and “Tax Indemnification Payment” shall mean such amount as, after
consideration of (i) all taxes required to be paid by Lessor in respect of the receipt thereof
under the laws of any governmental or taxing authority in the United States, and (ii) the amount of
any interest or penalty which may be payable by Lessor in connection with the Loss, shall be
required to cause Lessor’s after-tax net return (the “Net Return”) to be equal to, but no greater
than, the Net Return computed consistently with current tax laws (and with the assumption that
Lessor is taxed at the highest marginal Federal and state tax rates) as of the date of this Lease
that would have been available to Lessor had the Loss not occurred.

     (3) Lessor shall be responsible for, and shall not be entitled to a Tax Indemnification
Payment by Lessee on account of, any Loss arising solely as a direct result of the occurrence of
any one or more of the following events: (A) the failure of Lessor to timely and properly claim
MACRS Deductions in the tax return of Lessor other than as a result of changes in the

7

 

Code or applicable regulations unless in the reasonable opinion of Lessor’s tax counsel there
is no basis for such claim; or (B) the failure of Lessor to have sufficient taxable income before
application of the MACRS Deductions to offset the full amount of such MACRS Deductions other than
as a result of changes in the Code or applicable regulations; or (C) any event which by the terms
of the Lease requires payment by Lessee of the Stipulated Loss Value if such payment is thereafter
actually made to Lessor, to the extent that such payment reimburses Lessor for amounts otherwise
payable by Lessee pursuant hereto; or (D) a disqualifying disposition due to sale of any item of
the Equipment or the Lease by Lessor prior to a Default.

     (4) Lessor promptly shall notify Lessee in writing of such Loss and Lessee shall pay to Lessor
the Tax Indemnification Payment within thirty (30) days of such notice. For these purposes, a Loss
shall occur upon the earliest of: (A) the happening of any event (such as disposition or change in
use of any item of the Equipment) which will cause such Loss, (B) the payment by Lessor to the
Internal Revenue Service or state taxing authority of the tax increase (including an increase in
estimated taxes) resulting from such Loss; (C) the date on which the Loss is realized by Lessor; or
(D) the adjustment of the tax return of Lessor to reflect such Loss.

15. DEFAULT. A default shall be deemed to have occurred hereunder and under a Schedule upon
the occurrence of any of the following (each, an “Event of Default”): (a) non-payment of Basic Rent
on the applicable rent payment date, which non-payment continues for a period of three (3) days
after notice by Lessor to Lessee; (b) non-payment of any Other Payment within ten (10) days after
notice from Lessor to Lessee that such Other Payment is due; (c) failure to maintain, use or
operate the Equipment in compliance with applicable law; (d) breach by Lessee of its covenants
pursuant to Sections 4(e) hereof; (e) failure to obtain, maintain and comply with all of the
insurance coverages required under this Lease; (f) any transfer or encumbrance, or the existence of
any Lien, that is prohibited by this Lease; (g) a payment or other default by Lessee under any
loan, lease, guaranty or other financial obligation to Lessor or its affiliates which default
entitles the other party to such obligation to exercise remedies; (h) a payment or other default by
Lessee under any material (that is, for an amount in excess of $5,000,000) loan, lease, guaranty or
other material financial obligation to any third party which default has been declared; (i) an
inaccuracy in any representation or breach of warranty by Lessee (including any false or misleading
representation or warranty) in any financial statement or Lease Document, including any omission of
any substantial contingent or unliquidated liability or claim against Lessee; (j) the commencement
of any bankruptcy, insolvency, receivership or similar proceeding by or against Lessee or any of
its properties or business (unless, if involuntary, the proceeding is dismissed within sixty (60)
days of the filing thereof) or the rejection of this Lease or any other Lease Document in any such
proceeding; (k) the failure by Lessee generally to pay its debts as they become due or its
admission in writing of its inability to pay the same; (I) Lessee shall (1) enter into any
transaction of merger or consolidation, unless Lessee shall be the surviving entity or sell,
transfer or otherwise dispose of all or substantially all of its assets to a person (such actions
being referred to as an “Event”), unless the surviving entity or purchasing entity is organized and
existing under the laws of the United States or any state, and prior to such Event: (A) such person
executes and delivers to Lessor (x) an agreement satisfactory to Lessor (which shall not
unreasonably be withheld or delayed), in its sole discretion, containing such person’s effective
assumption, and its agreement to pay, perform, comply with and otherwise be liable for, in a due
and punctual manner, all of Lessee’s obligations having previously arisen, or then or thereafter
arising, under any and all of the Lease Documents, and (y) any and all other documents, agreements,
instruments, certificates (other than legal opinions) and filings reasonably requested by Lessor;
and (B) the creditworthiness of such person is equivalent to or better than the creditworthiness of
Lessee, and Lessor reasonably determines that such person conforms to the other standard criteria
then used by Lessor when approving transactions similar to the transactions contemplated in this
Lease; or (2) cease to do business as a going concern, liquidate, or dissolve; (m) effective
control of Lessee’s voting capital stock, issued and outstanding from time to time, is not retained
by the present holders (unless Lessee shall have provided thirty (30) days’ prior written notice to
Lessor of the proposed disposition and Lessor shall have consented thereto in writing (which
consent shall not unreasonably be withheld or delayed)); (n) there occurs a default or anticipatory
repudiation under the Guaranty;
or (o) breach by Lessee of any other covenant, condition or
agreement (other than those in items (a)-(n)) under this Lease or any of the other Lease Documents
that continues for thirty (30) days after Lessor’s written notice to Lessee (but such notice and
cure period will not be applicable unless such breach is curable by practical means within such
notice period). The occurrence of an Event of Default with respect to any Schedule shall, at the
sole discretion of Lessor, constitute an Event of Default with respect to any or all Schedules to
which it is then a party. Notwithstanding anything to the contrary set forth herein, Lessor may
exercise all rights and remedies hereunder independently with respect to each Schedule.

16. REMEDIES. (a) If an Event of Default occurs with respect to any Schedule, the Lessor
thereunder may (in its sole discretion) exercise any one or more of the following remedies with
respect to such Schedule and any or all other Schedules to which such Lessor is then a party: (1)
proceed at law or in equity, to enforce specifically Lessee’s performance or to recover damages;
(2) declare each such Schedule in default, and cancel each such Schedule or otherwise terminate
Lessee’s right to use the Equipment and Lessee’s other rights, but not its obligations, thereunder
and Lessee shall immediately assemble, make available and, if Lessor requests, return the Equipment
to Lessor in

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accordance with the terms of this Lease; (3) enter any premises where any item of Equipment is
located without breach of the peace and in accordance with applicable law, and take immediate
possession of and remove (or disable in place) such item (and/or any unattached parts) by
self-help, summary proceedings or otherwise without liability except for negligence or willful
misconduct; (4) use Lessee’s premises for storage without liability except for negligence or
willful misconduct; (5) sell, re-lease or otherwise dispose of any or all of the Equipment, whether
or not in Lessor’s possession, at public or private sale, with five (5) days’ prior notice to
Lessee, and apply or retain the net proceeds of such disposition, with Lessee remaining liable for
any deficiency and with any excess being retained by Lessor; (6) enforce any or all of the
preceding remedies with respect to any related Collateral, and apply any deposit or other cash
collateral, or any proceeds of any such Collateral, at any time to reduce any amounts due to
Lessor; (7) demand and recover from Lessee all Liquidated Damages and all Other Payments whenever
the same shall be due; and (8) exercise any and all other remedies allowed by applicable law,
including the UCC. As used herein, “Liquidated Damages” shall mean the liquidated damages (all of
which, Lessee hereby acknowledges, are damages to be paid in lieu of future Basic Rent and are
reasonable in light of the anticipated harm arising by reason of an Event of Default, and are not a
penalty) described in the first sentence of parts (1) or (2) of Section 16(b), depending upon the
recovery and disposition of the Equipment leased under the applicable Schedule. Upon the occurrence
of the Event of Default described in Section 150) hereof, the remedy provided in Clause (7) above
shall be automatically exercised without the requirement of prior written notice to Lessee or of
any other act or declaration by Lessor, and the Liquidated Damages described therein shall be
immediately due and payable.

     (b) (1) If an Event of Default occurs with respect to any Schedule, if Lessor recovers the
Equipment and disposes of it by a lease or elects not to dispose of the Equipment after recovery,
upon demand, Lessee shall pay to Lessor an amount equal to the sum of (A) any accrued and unpaid
Rent as of the date Lessor recovers possession of the Equipment, plus (B) the present value as of
such date of the total Basic Rent for the then remaining term of such Schedule, minus (C) either,
as applicable, (i) the present value, as of the commencement date of any substantially similar
re-lease of the Equipment, of the re-lease rent payable for that period, commencing on such date,
which is comparable to the then remaining term of such Schedule or (ii) the present value, as of
that certain date which may be determined by taking into account Lessor’s having a reasonable
opportunity to remarket the Equipment, of the “market rent” for such Equipment (as computed
pursuant to Article 2A) in the continental United States on that date, computed for that period,
commencing on such date, which is comparable to the then remaining term of such Schedule; provided,
however, Lessee acknowledges that if Lessor is unable after reasonable effort to dispose of the
Equipment at a reasonable price and pursuant to other reasonable terms, or the circumstances
reasonably indicate that such an effort will be unavailing, the “market rent” in such event will be
deemed to be $0.00, but in the event that Lessor does eventually re-lease or otherwise dispose of
the Equipment, it will apply the net proceeds of such disposition, to the extent received in good
and indefeasible funds, as a credit or reimbursement, as applicable, in a manner consistent with
the applicable provisions of Article 2A. Any amounts discounted to present value, shall be
discounted at the rate of three percent (3%) per annum, compounded annually.

          (2) If an Event of Default occurs with respect to any Schedule, if Lessee fails to surrender
the Equipment in the manner and condition required by this Lease, or Lessor recovers and sells the
Equipment, upon demand, Lessee shall pay to Lessor an amount calculated as the Stipulated Loss
Value of the Equipment (determined as of the next rent payment date after the date of the
occurrence of the subject Event of Default), together with all other Rent due with respect to the
related Schedule as of such determination date, and all Enforcement Costs (defined in Section
16(c)), less a credit for any disposition proceeds, if applicable pursuant to the application
provisions in the next sentence. If Lessor demands the Liquidated Damages under this part (2), and
recovers and sells the Equipment, any proceeds received in good and indefeasible funds shall be
applied by Lessor, with respect to the related Schedule: first, to pay all Enforcement Costs, to
the extent not previously paid; second, to pay to Lessor an amount equal to any unpaid Rent due and
payable, together with the Liquidated Damage amounts specified in this part (2), to the extent not
previously paid; third, to pay to Lessor any interest accruing on the amounts covered by the
preceding clauses, at the Default Rate, from and after the date the same becomes due, through the
date of payment; and fourth. (A) if the Lessor under such Schedule is also the Lessor under any
other Schedules (whether by retaining the same, or as Assignee), to satisfy any remaining
obligations under any or all such other Schedules, or (B) if such Lessor is not the Lessor under
any other Schedule, or if Lessee’s obligations to such Lessor under such other Schedules have been
fully and indefeasibly satisfied, to reimburse Lessee for such amounts to the extent paid by Lessee
as Liquidated Damages pursuant to this part (2).

     (c) A cancellation of any Schedule shall occur only upon written notice by Lessor to Lessee.
Unless already specifically provided for in Section 16(b), if an Event of Default occurs with
respect to any Schedule, Lessee shall also be liable for all of the following (“Enforcement
Costs”): (1) all unpaid Rent due before, during or after exercise of any of the foregoing remedies,
and (2) all reasonable legal fees (including consultation, drafting notices or other documents,
expert witness fees, sending notices or instituting, prosecuting or defending litigation or
arbitration) and other reasonable enforcement costs and expenses incurred by reason of any Default
or Event of Default or the exercise of Lessor’s rights

9

 

or remedies, including all expenses incurred in connection with the return or other recovery
of any Equipment in accordance with the terms of this Lease or in placing such Equipment in the
condition required hereby, or the sale, release or other disposition (including but not limited to
costs of transportation, possession, storage, insurance, taxes, hen removal, repair, refurbishing,
advertising and brokers’ fees), and sales or use taxes incurred by Lessor in connection with any
disposition of the Equipment after the occurrence of an Event of Default, and all other
pre-judgment and post-judgment enforcement related actions taken by Lessor or any actions taken by
Lessor in any bankruptcy case involving Lessee or the Equipment From and after the date on which an
Event of Default occurs, Lessee shall pay interest to Lessor with respect to all amounts due
hereunder until such amounts are received by Lessor in good funds at a per annum interest rate that
is the lesser of ten (10) percent or the maximum rate permitted by applicable law (the “Default
Rate”) No right or remedy is exclusive and each may be used successively and cumulatively Any
failure to exercise the rights granted hereunder upon any Default or Event of Default shall not
constitute a waiver of any such right No extension of time for payment or performance of any of
Lessees obligations hereunder shall operate to release, discharge, modify, change or affect the
original liability of Lessee for such obligations, either in whole or in part In any action to
repossess any Equipment or other Collateral, Lessee waives any bonds and any surety or security
required by any applicable laws as an incident to such repossession Notices of Lessor’s intention
to accelerate acceleration, nonpayment, presentment, protest, dishonor or any other notice
whatsoever (other than as expressly set forth herein) are waived by Lessee Any notice given by
Lessor of any disposition of the Equipment or any Collateral or other intended action of Lessor
which is given in accordance with this Lease at least five (5) business days prior to such action
shall constitute fair and reasonable notice of such action The execution of a Schedule shall not
constitute a waiver by Lessor of any pre-existing Default or Event of Default With respect to any
disposition of any Equipment or Collateral pursuant to this Section, (i) Lessor shall have no
obligation, subject to the requirements of commercial reasonableness, to clean-up or otherwise
prepare the same for disposition, (11) Lessor may comply with any applicable law in connection with
any such disposition, and any actions taken in connection therewith shall not be deemed to have
adversely affected the commercial reasonableness of any disposition thereof, (m) Lessor may
disclaim any title or other warranties in connection with any such disposition, and (iv) Lessee
shall remain responsible for any deficiency remaining after Lessor’s exercise of its remedies and
application of any funds or credits against Lessee’s obligations under any Schedule, and Lessor
shall retain any excess after such application

17. ASSIGNMENT (a) LESSEE SHALL NOT ASSIGN, DELEGATE, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER OR UNDER ANY SCHEDULE, OR ITS LEASEHOLD INTEREST OR ANY COLLATERAL, SUBLET
THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR
REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE Notwithstanding the foregoing, Lessee may sublease
or otherwise permit the Equipment to be operated or used by an affiliate of Lessee provided that
such sublease or right of possession is pursuant to a written agreement which is expressly subject
and subordinate to this Lease and the rights of Lessor hereunder, which shall not permit any
further subleasing or other disposition of the Equipment, shall not be for a term longer than the
then remaining term of this Lease, and shall not contain provisions that are inconsistent with the
provisions of this Lease Without limiting the foregoing, (1) Lessee may not attempt to dispose of
any of the Equipment, and (2) Lessee shall (A) maintain the Equipment free from all Liens, other
than Permitted Liens, (B) notify Lessor immediately upon receipt of notice of any Lien affecting
the Equipment, and (C) defend Lessor’s title to the Equipment A “Permitted Lien” shall mean any
Lien for Impositions, Liens of mechanics materialmen, or suppliers and similar Liens arising by
operation of law, provided that any such Lien is incurred by Lessee in the ordinary course of
business, for sums that are not yet delinquent or are being contested in good faith and with due
diligence, by negotiations or by appropriate proceedings which suspend the collection thereof and
in Lessor’s reasonable discretion (i) do not involve any substantial danger of the sale, forfeiture
or loss of the Equipment or any interest therein and (n) for the payment of which adequate
assurances or security have been provided to Lessor No subleasing, permitted use or disposition
referred to in this Section shall relieve Lessee of its obligations, and Lessee shall remain
primarily liable under each Schedule and all of the other Lease Documents (b) Lessor may at any
time with or without notice to Lessee grant a security interest in, sell, assign, delegate or
otherwise transfer (an “Assignment’) all or any part of its interest in the Equipment, this Lease
or any Schedule and any related Lease Documents or any Rent thereunder, or the right to enter into
any Schedule, and Lessee (after receipt of written notice of the applicable Assignment) shall
perform all of its obligations thereunder, to the extent so transferred, for the benefit of the
beneficiary of such Assignment (such beneficiary including any successors and assigns, an
“Assignee”) Lessee agrees not to assert against any Assignee any Abatement (without limiting the
provisions of Section 2) or Claim that Lessee may have against Lessor, and Assignee shall not be
bound by, or otherwise required to perform any of Lessor’s obligations, unless expressly assumed by
such Assignee Lessor shall be relieved of any such assumed obligations If so directed in writing,
Lessee shall pay all Rent and all other sums that become due under the assigned Schedule and other
Lease Documents directly to the Assignee or any other party designated in writing by Lessor or such
Assignee Lessee acknowledges that Lessor’s right to enter into an Assignment is essential to Lessor
and accordingly, waives any restrictions under applicable law with respect to an Assignment and any
related remedies Upon the request of Lessor or any Assignee Lessee also agrees (i) to promptly
execute and deliver to Lessor or to such Assignee an acknowledgment of the Assignment in form and
substance satisfactory to the requesting

10

 

party, an insurance certificate and such other documents and assurances reasonably requested
by Lessor or Assignee to confirm Lessee’s acknowledgment of the Assignment, and (n) to comply with
all other reasonable requirements of any such Assignee in connection with any such Assignment to
confirm Lessee’s acknowledgment of the Assignment, provided that Lessee shall not be required to
provide a legal opinion in connection with any such Assignment or to change the terms and
conditions of the Lease Documents Upon such Assignment and except as may otherwise be provided
herein, all references in this Lease to “Lessor” shall include such Assignee (c) Subject always to
the foregoing this Lease and each Schedule shall mure to the benefit of, and are binding upon,
Lessee’s and Lessor’s respective successors and assigns

18. MISCELLANEOUS (a) This Lease, each Schedule, any Riders hereto or thereto and any
commitment letter between the parties, constitute the entire agreement between the parties with
respect to the subject matter hereof and thereof and shall not be amended or modified in any manner
except by a document in writing executed by both parties (b) Any provision of this Lease 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 provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction (c) The representations warranties
and agreements of Lessee herein shall be deemed to be continuing and to survive the execution and
delivery of this Lease each Schedule and any other Lease Documents With respect to each Schedule,
the obligations of Lessee under Sections 8, 9, 10, 12, 13 and 14 hereof, together with any of
Lessee’s obligations under the other provisions of this Lease (as incorporated therein) which have
accrued but not been fully satisfied, performed or complied with prior to the expiration or earlier
cancellation or termination of such Schedule shall survive the expiration or earlier cancellation
or termination thereof (d) All of Lessee’s obligations hereunder and under any Schedule shall be
performed at Lessee’s sole expense Lessee shall reimburse Lessor promptly upon demand for all
expenses incurred by Lessor in connection with (1) any action taken by Lessor at Lessee’s request,
or in connection with any option, (2) the filing or recording of real property waivers and UCCs,
(3) any Enforcement Costs not recovered pursuant to Section 16, (4) all inspections, and (5) all
hen search reports (and copies of filings) requested by Lessor If Lessee fails to perform any of
its obligations with respect to a Schedule, Lessor shall have the right, but shall not be
obligated, to effect such performance, and Lessee shall reimburse Lessor, upon demand, for all
expenses incurred by Lessor in connection with such performance Lessor’s effecting such compliance
shall not be a waiver of Lessee’s default (e) Lessee irrevocably appoints Lessor as Lessee’s
attorney-in-fact (which power shall be deemed coupled with an interest) to (1) make minor
corrections to manifest errors in factual data in any Schedule and/or any addenda attachments,
exhibits and/or riders to this Lease or any Schedule, and (2) execute, endorse and deliver any
documents and checks or drafts relating to or received in payment for any loss or damage under the
policies of insurance required by this Lease, but only to the extent that the same relates to the
Equipment or are required by titling agencies in order to reflect Lessor as the owner and/or
lienholder with respect to certificates of title pertaining to motor vehicles (if any) comprising
the Equipment (f) LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH
LESSEE AND/OR LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS LEASE (g) All
notices (excluding billings and communications in the ordinary course of business) hereunder shall
be in writing, personally delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt) or sent by certified mail return receipt requested,
addressed to the other party at its respective address stated below the signature of such party or
at such other address as such party shall from time to time designate in writing to the other
party, and shall be effective from the date of receipt (h) This Lease shall not be effective unless
and until accepted by execution by an officer of Lessor THIS LEASE AND ALL OF THE OTHER LEASE
DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW)), INCLUDING ALL MATTERS OF CONSTRUCTION VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE EQUIPMENT The parties agree that any action or proceeding arising
out of or relating to this Lease may be commenced in any state or Federal court in the State of New
York, and agree that a summons and complaint commencing an action or proceeding in any such court
shall be properly served and shall confer personal jurisdiction if served personally or by
certified mail to it at the mailing address below Lessee s signature, or as it may provide in
writing from time to time, or as otherwise provided under the laws of the State of New York (i)
This Lease and all of the other Lease Documents may be executed in counterparts Photocopies or
facsimile transmissions of signatures shall be deemed original signatures and shall be fully
binding on the parties to the same extent as original signatures The transfer or possession of the
“Original” of this Lease shall be irrelevant to the full or collateral assignment of, or grant of
security interest in, any Schedule, provided however, no security interest in any Schedule may be
created through the transfer, possession or control, as applicable of any counterpart of such
Schedule other than the original thereof, which shall be identified as the document or record (as
applicable) marked “Original” and all other counterparts shall be marked “Duplicate” (j) If Lessor
is required by the terms hereof to pay to or for the benefit of Lessee any amount received as a
refund of an Imposition or as insurance proceeds, Lessor shall not be required to pay such amount
if any Default has occurred and not been cured or any Event of Default shall have occurred and not
been waived by Lessor In addition, if Lessor is required by the terms hereof to cooperate with
Lessee in connection with

11

 

certain matters, such cooperation shall not be required if a Default or Event of Default has
then occurred and is continuing, (k) To the extent Lessor is required to give its consent or
approval with respect to any matter, the reasonableness of Lessor’s withholding of such consent
shall be determined based on the then existing circumstances; provided, that Lessor’s withholding
of its consent shall be deemed reasonable for all purposes if (i) the taking of the action that is
the subject of such request, might reasonably (A) result in an impairment of Lessor’s rights, title
or interests hereunder or under any Schedule or other Lease Document, or to the Equipment, or (B)
expose Lessor to any Claims or Impositions, or (ii) Lessee fails to provide promptly to Lessor any
filings, certificates, or indemnities reasonably required by Lessor as a condition to such consent.
(I) There is no restriction (either express or implied) on any disclosure or dissemination of the
tax treatment or tax structure of the transactions contemplated by this Lease or any documents
executed in connection herewith. Further, each party hereto acknowledges that it has no proprietary
rights to any tax matter or tax idea or to any element of the transaction structure contemplated by
this Lease; and each party hereto (and any employee, representative or agent of any party hereto)
may disclose to any and all persons (without limitation of any kind), the Federal tax treatment and
Federal tax structure of the transaction contemplated by this Lease. This Section 18(1) is intended
to cause the transaction contemplated by this Lease to be treated as not having been offered under
conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provision)
of the Treasury Regulations promulgated under Section 6011 of the Code and Section 6111 of the Code
and the Treasury Regulations promulgated thereunder; and shall be construed in a manner consistent
with such purpose.

19. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when used in this Lease or
in any of the Schedules have the following meanings: (1) “affiliate”: with respect to any given
person, shall mean (i) each person that directly or indirectly owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, five (5) percent or more of the voting
stock, membership interest or similar equity interest having ordinary voting power in the election
of directors or managers of such person, (ii) each person that controls, is controlled by, or is
under common control with, such person, or (iii) each of such person’s officers, directors,
members, joint venturers and partners. For the purposes of this definition, “control” of a person
means the possession, directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by contract or
otherwise; (2) “applicable law” or “law”: any law, rule, regulation, ordinance, order, code, common
law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award,
permit or similar norm or decision of any governmental authority; (3) “AS IS, WHERE IS”: AS IS,
WHERE IS, without warranty, express or implied, with respect to any matter whatsoever; (4)
“business day”: any day, other than a Saturday, Sunday, or legal holiday for commercial banks under
the laws of the state of the Lessor’s notice address; (5) “governmental authority”: any federal,
state, county, municipal, regional or other governmental authority, agency, board, body,
instrumentality or court, in each case, whether domestic or foreign; (6) “person”: any individual,
corporation, limited liability entity, partnership, joint venture, or other legal entity or a
governmental authority, whether employed, hired, affiliated, owned, contracted with, or otherwise
related or unrelated to Lessee or Lessor; and (7) “UCC” or “Uniform Commercial Code”: the Uniform
Commercial Code as in effect in the State or in any other applicable jurisdiction; and any
reference to an article (including Article 2A) or section thereof shall mean the corresponding
article or section (however termed) of any such applicable version of the Uniform Commercial Code,
(b) The following terms when used herein or in any of the Schedules shall be construed as follows:
(1) “herein,” “hereof,” “hereunder,” etc.: in, of, under, etc. this Lease or such other Lease
Document in which such term appears (and not merely in, of, under, etc. the section or provision
where the reference occurs); (2) “including”: means including without limitation unless such term
is followed by the words “and limited to,” or similar words; and (3) “or”: at least one, but not
necessarily only one, of the alternatives enumerated. Any defined term used in the singular
preceded by “any” indicates any number of the members of the relevant class. Any Lease Document or
other agreement or instrument referred to herein means such agreement or instrument as supplemented
and amended from time to time. Any reference to Lessor or Lessee shall include their permitted
successors and assigns. Any reference to an applicable law shall also mean such law as amended,
superseded or replaced from time to time.

20. RIDER. Rider No. 1 attached hereto is incorporated in this Lease.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

12

 

     IN WITNESS WHEREOF, the parties hereto have caused this Master Operating Lease Agreement to be
duly executed, under seal, as of the day and year first above set forth.

	 	 	 	 	 	 	 	 	 	 	 

	AIG COMMERCIAL EQUIPMENT FINANCE, INC.	 	 	 	C&J SPEC-RENT SERVICES, INC.	 	 
	Lessor	 	 	 	Lessee	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William S. Anderson
	 	[SEAL]
	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	William S. Anderson
	 	 	 	Name:
	 	Randy McMullen	 	 
	Title:

	 	Investment Manager
	 	 	 	Title:
	 	VP Finance	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	5700 Granite Park Drive	 	 	 	500 N. Shoreline
	 	 	Suite 850	 	 	 	Suite 350
	 	 	Plano, Texas 75025	 	 	 	Corpus Christi, Texas 78401
	 	 	Facsimile: (972) 987-3799	 	 	 	Facsimile: 361-653-9444
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Form of Organization: Corporation	 	 
	 	 	 	 	 	 	Jurisdiction of Organization: Indiana	 	 
	 	 	 	 	 	 	Organizational No.: 2005071200306	 	 
	 	 	 	 	 	 	Federal Employer Identification No. 87-0750712	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	C&J ENERGY SERVICES, INC.	 	 
	 	 	 	 	 	 	Lessee	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Randy McMullen
	 	[SEAL]
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Randy McMullen	 	 
	 

	 	 	 	 	 	Title:
	 	VP Finance	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	500 N. Shoreline
	 	 	 	 	 	 	 	 	Suite 350
	 	 	 	 	 	 	 	 	Corpus Christi, Texas 78401
	 	 	 	 	 	 	 	 	Facsimile: 361-653-9444
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Form of Organization: Corporation	 	 
	 	 	 	 	 	 	Jurisdiction of Organization: Texas	 	 
	 	 	 	 	 	 	Organizational No.: 0800716424	 	 
	 	 	 	 	 	 	Federal Employer Identification No. 20-5673219	 	 

13

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