Document:

Exhibit 10.15

 

COMMERCIAL PROMISSORY NOTE

(Equipment Loan; Purchase Money)

 

	$1,401,558.91 USD	Date: February 27, 2020

 

FOR VALUE RECEIVED
and WITHOUT GRACE, on the dates, and in the amounts so herein stipulated, the undersigned, 5J
Oil Field Services, LLC and 5J Trucking, LLC whose address are
710 N. Post Oak Road, Suite 315, Houston, Texas 77024, together with SMG Industries,
Inc. whose address is 710 N. Post Oak Road, Suite 315, Houston, Texas 77024 (hereinafter called “Maker”),
promises to pay to the order of AMERISOURCE FUNDING, INC (“Lender”) at its principal office located at 7225 Langtry,
Houston, Texas 77040, in coin or currency of the United States of America, which at the time of payment is legal tender for the
payment of public and private debts, the principal sum of ONE MILLION FOUR HUNDRED AND ONE THOUSAND AND FIVE HUNDRED AND FIFTY-EIGHT
AND 91/100 DOLLARS ($1,401,558.91), together with accrued interest on the principal amount hereof remaining unpaid from time to
time, computed from the date hereof until maturity at a per annum rate, calculated on the basis of a three hundred sixty (360)
day year [except for calculation of the Maximum Rate, which will be calculated on the basis of a three hundred sixty five (365)
or three hundred sixty six (366) day year, as the case may be] determined on a fixed per annum basis, equal to the lesser of (i)
or (ii) as follows:

 

(i)       The
prime rate plus five and one-quarter percent (5.250%) per annum as determined from time to time in the Wall Street Journal (currently
10.00%) (the “Applicable Rate”); or

 

(ii)       the
Maximum Rate (as hereinafter defined),

 

which interest rate is further limited
and controlled by the provisions of this Note hereinafter set forth. The term “Maximum Rate”, as used herein, shall
mean, on any day, the highest non-usurious rate of interest (if any) permitted by applicable law on such day. For purposes of the
Texas Finance Code, as it may from time to time be amended, the Maximum Rate shall be referred to in and determined under the Texas
Finance Code, from time to time in effect; provided, however, that to the extent permitted by applicable law, Lender reserves the
right to change, from time to time by further notice and disclosure to Maker, the ceiling on which the Maximum Rate is based under
the Texas Finance Code; and, provided further, that the “highest non-usurious rate of interest permitted by applicable law”
for purposes of this Note shall not be limited to the applicable rate ceiling under the Texas Finance Code if federal laws or other
state laws now or hereafter in effect and applicable to this Note (and the interest contracted for, charged and collected hereunder)
shall permit a higher rate of interest. In no event shall the Applicable Rate herein exceed the Maximum Rate.

 

This Note is payable
as follows, to-wit:

 

(a)       Accrued
and unpaid interest on this Note shall be payable monthly, commencing one calendar month from the date hereof, and continuing thereafter
on the same day of each succeeding calendar month, and ending upon the maturity of this Note, however such maturity may be brought
about; and

 

(b)       All
outstanding principal of this Note and all accrued and unpaid interest hereon shall be due and payable on or before February 27,
2023 (the “Maturity Date.

 

Upon execution hereof,
Maker shall pay an origination fee equal to $21,962.30. Said fees shall not be construed as interest.

 

THE WRITTEN LOAN AGREEMENT REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

 

     

     

    

 

It is especially agreed that if default
shall be made in any payment due hereon, either principal or interest, or if there is a default in any of the terms, covenants
or provisions set forth in that certain Security Agreement, as hereinafter defined, or any other document given to secure this
Note or any Guaranty executed to support Lender’s entering into the Note or Security Agreement (collectively, the “Security
Instruments”) or in any other note or obligation of Maker to Lender (including guaranty agreements), then, in any such event,
at the option of Lender or any other holder hereof at any time thereafter without notice of intent to accelerate, notice of acceleration,
or any other demand or notice, the unpaid principal balance of this Note and all accrued interest shall at once become due and
payable. Any sum, principal or interest, payable under this Note which is not paid when due shall bear interest from the date such
payment is due until paid at the Maximum Rate, or if no Maximum Rate is established by applicable law, then at the Applicable Rate
plus five percent (5%) per annum. If default is made in the prompt payment of this Note when due or declared due and the same is
placed in the hands of an attorney for collection, or suit is brought on same, or the same is collected through probate, bankruptcy
or other judicial proceedings, then Maker agrees and promises to pay to Lender its reasonable and necessary attorney’s fees
and court costs.

 

If Lender or its successor
has not received the full amount of any installment payment at the end of the 10th day after it is due, Maker agrees to pay a late
charge to Lender. The amount of the late charge will be five percent (5%) of the amount of the overdue installment payment. Maker
agrees to pay the late charge promptly. The late charge will be charged only one time with respect to any late installment payment.

 

It is agreed that time
is of the essence of this agreement. Upon the occurrence of an event of default (as such term is defined in the herein defined
Security Agreement), Lender may accelerate and declare this Note immediately due and payable without notice. Any failure to exercise
this option shall not constitute a waiver by Lender of the right to exercise the same at any other time.

 

All payments under
the Security Instruments received by Lender during the existence of any event of default may be applied by Lender against the indebtedness
(herein due Lender) in any manner and in such priority as Lender may specify, including without limitation, in accordance with
the provisions of any of the Security Instruments.

 

Maker and any and all
endorsers, guarantors and sureties severally waive all notices, demands for payment, presentment for payment, protest and notice
of protest, notice of intent to accelerate, notice of acceleration, any other notices of any kind, the filing of suit hereon for
the purpose of fixing liability and diligence in taking any action to collect amounts called for hereunder and in the handling
of collateral or securities at any time existing in connection herewith, and consent that the time of payment hereof may be extended
and re-extended from time to time without notice to any of them.

 

In addition to any
other security interests granted but Maker in the Security Instruments, Maker specifically provides, represents and warrants a
first priority lien and a Purchase Money Security Interest in the Equipment described on the attached Equipment Schedule and that
Maker’s grant of such lien hereunder does not constitute a fraudulent conveyance under any applicable law or contract and
that Maker is the owner of all right, title, and interest in the equipment free and clear of all liens, encumbrances, and security
interests.

 

It is further agreed
that Maker grants to Lender or any other holder hereof a first lien and security interest on (and the express right of setoff against)
all deposits and other sums at any time credited by or due from Lender or any other holder hereof to Maker, or any endorser, surety
or guarantor hereof as collateral security for the payment of this Note, and Lender or other holder hereof, at its option, may
at any time, without notice and without any liability, hold all or any part of any such deposits or other sums until all sums owing
on this Note have been paid in full and/or apply or set off all or any part of any such deposits or other sums credited by or due
from Lender or any other holder hereof to or against any sums due on this Note in any manner and in any order of preference which
Lender or other holder hereof, at its sole discretion, chooses.

 

     

     

    

 

It is the
intention of the parties hereto to comply with the usury laws of the State of Texas and of the United States of America. The
parties hereto do not intend to contract for, charge or receive any interest or other charge that is usurious, and by
execution of this Note, Maker agrees that Lender has no such intent. This Note, the hereinafter mentioned Security Agreement
and Security Instruments, and all other agreements between Maker and Lender or any other holder hereof, which are now
existing or hereafter arising, whether written or oral, are hereby expressly limited so that in no event whatsoever, whether
by reason of acceleration of maturity hereof, or otherwise, shall the amount paid, or agreed to be paid, to Lender or any
other holder hereof for the use, forbearance or detention of the money to be due hereunder or otherwise, or for the payment
or performance of any covenant or obligation contained herein or in any other document evidencing, securing, or pertaining to
the indebtedness evidenced hereby, exceed the Maximum Rate. If from any circumstance whatsoever fulfillment of any provisions
hereof or other document, at the time performance of such provisions shall be due, shall involve transcending the valid
limits prescribed by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the Maximum Rate, and if from
any such circumstance Lender or any other holder shall ever receive as interest or otherwise an amount which will exceed the
Maximum Rate, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing
hereunder or on account of any other principal indebtedness of Maker to the holder and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal hereof and such other indebtedness, such excess shall be
refunded to Maker. All sums paid and agreed to be paid to Lender or any other holder for use, forbearance or detention of the
indebtedness of Maker shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the periods until payment in full of this Note (or any renewals, extensions and rearrangements hereof) so that the
actual rate of interest on account of this indebtedness evidenced by this Note is uniform throughout the term of this Note
(and all renewals, extensions and rearrangements hereof) and does not exceed the Maximum Rate. The terms and provisions of
this paragraph shall control and supersede any other provisions of this Note.

 

Except as otherwise
stated herein, all payments under this Note shall be applied first against the accrued and unpaid interest and the remainder against
the principal balance hereof. All partial prepayments shall be applied toward the payment of principal installments in the inverse
order of maturity. Lender’s records shall constitute prima facie evidence of the amount of funds advanced hereunder.

 

If at any time the
Applicable Rate exceed the Maximum Rate, then interest hereon shall accrue at the Maximum Rate. If the Applicable Rate should then
subsequently decrease to a level less than the Maximum Rate or if the Maximum Rate applicable to this Note should then subsequently
be increased to a level which would be greater than the Applicable Rate, then, in either case, the interest hereon shall thereafter
accrue at a rate equal to the applicable Maximum Rate until the aggregate amount of interest accrued through the term of this Note
equals the aggregate amount of interest which would have accrued at the Applicable Rate without regard to any usury limit, at which
time interest hereon shall again accrue at the Applicable Rate.

 

If at maturity or final
payment of this Note the total amount of interest accrued under the foregoing provisions is less than the total amount of interest
which would have accrued if the Applicable Rate had at all times been in effect, then Maker shall pay Lender the amount by which
(i) the lesser of (a) the amount of interest which would have accrued on this Note if the Maximum Rate had at all times been in
effect or (b) the amount of interest which would have accrued if the Applicable Rate had at all times been in effect, exceeds
(ii) the amount of interest paid by Maker to Lender in accordance with the other provisions of this Note.

 

Any check, draft, money
order or other instrument given in payment of all or any part hereof or on any part of the indebtedness may be accepted by the
holder hereof and handled in collection in a customary manner, but same shall not constitute payment hereof or of the indebtedness
or diminish any rights of Lender, except to the extent that actual cash proceeds of such instrument are unconditionally received
by Lender.

 

     

     

    

 

The individual signing
below warrants and represents that s/he has the requisite authority to bind the entity on whose behalf s/he signs.

 

Without being limited
thereto or thereby, this Note is secured by that certain REVOLVING ACCOUNTS RECEIVABLE ASSIGNMENT AND TERM LOAN FINANCING AND SECURITY
AGREEMENT (the “Security Agreement”) executed by Maker for the benefit of Lender, covering all assets of Maker, including
the Collateral more fully described in the Security Agreement.

 

	CLIENT:
	 
	5J Oil Field Services, LLC
	 
	X /s/ Matthew Flemming	 
	Name:	 Matthew Flemming	 
	Title:	Manager	 
	 
	5J Trucking, LLC
	 
	X /s/ Matthew Flemming	 
	Name:	 Matthew Flemming	 
	Title:	 Manager	 
	 
	SMG Industries, Inc.
	 
	X /s/ Matthew Flemming	 
	Name:	Matthew Flemming	 
	Title:	President	 

 

     

     

    

 

PROMISSORY NOTE

 

EQUIPMENT SCHEDULE

 

	Department	 	Item

    #	 	 	Qty	 	Serial # / VIN	 	Asset

    #	 	 	Liens	 	Lender	 	Note
    

Balance	 	 	Payment

    Amount	 	 	Total
    FLV	 	 	Payoff
    Amount

 as of 

Payoff Date	 	 	 	 
	Trailers	 	 	411	 	 	 	1	 	 	 	 	73121	 	 	X	 	Citizens
    398010	 	 	0	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	417	 	 	 	1	 	 	 	 	82320	 	 	X	 	Citizens
    398010	 	 	0	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	430	 	 	 	1	 	 	 	 	55004	 	 	X	 	Citizens
    398010	 	 	64,105	 	 	 	4,081	 	 	$	105,000	 	 	$	60,591	 	 	 	 	 
	Trailers	 	 	399	 	 	 	1	 	 	 	 	64862	 	 	X	 	Citizens
    9045139	 	 	0	 	 	 	0	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	401	 	 	 	1	 	 	 	 	65692	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	402	 	 	 	1	 	 	 	 	65864	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	403	 	 	 	1	 	 	 	 	65865	 	 	X	 	Citizens
    9045139	 	 	265,642	 	 	 	8,575	 	 	$	290,000	 	 	$	259,651	 	 	 	 	 
	Trailers	 	 	404	 	 	 	1	 	 	 	 	72614	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	405	 	 	 	1	 	 	 	 	72615	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	406	 	 	 	1	 	 	 	 	72616	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	407	 	 	 	1	 	 	 	 	72617	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	408	 	 	 	1	 	 	 	 	72689	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	409	 	 	 	1	 	 	 	 	72690	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	410	 	 	 	1	 	 	 	 	72832	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	418	 	 	 	1	 	 	 	 	82868	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	419	 	 	 	1	 	 	 	 	82871	 	 	X	 	Citizens
    9045139	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	393	 	 	 	1	 	 	 	 	43168	 	 	X	 	Citizens
    9134123	 	 	261,311	 	 	 	8,571	 	 	$	230,000	 	 	$	247,591	 	 	 	 	 
	Trailers	 	 	394	 	 	 	1	 	 	 	 	43198	 	 	X	 	Citizens
    9134123	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	412	 	 	 	1	 	 	 	 	73170	 	 	X	 	Citizens
    9134123	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	413	 	 	 	1	 	 	 	 	73197	 	 	X	 	Citizens
    9134123	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	420	 	 	 	1	 	 	 	 	83169	 	 	X	 	Citizens
    9134123	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Trailers	 	 	421	 	 	 	1	 	 	 	 	83199	 	 	X	 	Citizens
    9134123	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	Cranes	 	 	447	 	 	 	1	 	 	 	 	A3069	 	 	X	 	Citizens
    9206094	 	 	729,493	 	 	 	16,495	 	 	$	575,000	 	 	$	716,086	 	 	 	 	 
	Trucks	 	 	72	 	 	 	1	 	 	 	 	A1967	 	 	X	 	Citizens
    Pal 9128921	 	 	220,561	 	 	 	6,144	 	 	$	230,000	 	 	$	208,589	 	 	 	 	 
	Trucks	 	 	73	 	 	 	1	 	 	 	 	A1968	 	 	X	 	Citizens
    Pal 9128921	 	 	-	 	 	 	-	 	 	$	-	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,541,112	 	 	$	43,866	 	 	$	1,430,000	 	 	$	1,492,507Exhibit 10.16

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT
(“Agreement”) is made and delivered, by and among SMG INDUSTRIES, INC., a Texas corporation (“Borrower”
and “Grantor”, whether one or more, jointly and severally), 5J OIL FIELD SERVICES, LLC, a Texas limited liability company,
and 5J TRUCKING, LLC, a Texas limited liability company, (“Guarantor”, whether one or more, jointly and severally),
and AMERISOURCE LEASING CORPORATION, a Texas corporation (“Lender”) in connection with a loan from Lender to Borrower
in the principal amount of $1,600,000.00 (the “Note”, together with all documents executed in connection therewith
being the “Loan Documents”; each Borrower and Guarantor being referred to herein as a “Loan Party”).

 

For and in consideration
of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned Loan Parties and Lender agree as follows:

 

ARTICLE I. LOAN TERMS

 

1.01       Definitions.
Terms that are used herein but not readily defined are as defined in the Definitions section at the end of this Agreement, or in
the Note itself.

 

1.02       Permitted
Use. Lender and Borrower agree that the proceeds of the Note are to be used for the purpose of paying amounts due (in whole
or in part) of the loans referenced on Annex B attached hereto, and for other general working capital purposes (the “Permitted
Use”).

 

1.03       Collateral.
The Note shall be secured by all personal property of the Borrower and the Guarantors.

 

1.04       Conditions
to Lender’s Obligations. Notwithstanding anything contained to the contrary in the Note, this Agreement or in any of
the other Loan Documents, Lender shall have no liability or obligation under this Agreement, the Note, or any of the other Loan
Documents until the following matters are received, reviewed by Lender and completed or resolved to the satisfaction of Lender:

 

		A.	Borrower shall issue 2,400,000 shares of restricted common stock of the Borrower (the “Stock”)
which is one hundred and fifty percent (150%) of the Note value and any future increases in the Note amount hereunder shall include
an issuance at this same ratio. Guarantor’s Stock is traded on the OTCQB (Venture Market). As such, the additional restrictions
apply:

 

To
the extent allowed by law, and only after the Maturity Date of the Note, Borrower will, at the request of Lender (or any
participant in the Note) remove the sale restrictions on the Stock made through the issuance of the Note. The
Stock issuable under this Agreement may be assigned to participants of the Note, but otherwise may not be sold or transferred
unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its
transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to
Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an
 “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the
shares only in accordance with this Section 2.5 and who is an Accredited Investor as the term Accredited Investor is defined
in Rule 501 of Regulation D, promulgated under the Act.  Subject
to the removal provisions set forth below, until such time as the Stock issuable hereunder has been registered under the Act
or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date
that can then be immediately sold, each certificate for Stock issuable hereunder that has not been so included in an
effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption
that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

    	Loan Agreement	Page |1

     

    

 

 

“NEITHER
THE ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE LENDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.”

 

		B.	Borrower shall pay Lender a yearly fee of 1% of the Note amount (“Management Fee”)
for managing the Note and any participants to the Note with the 1st year’s fee collected out of proceeds at funding
and each subsequent annual Management Fee collected on the anniversary date of the Note.

 

		C.	Lender shall have received fully executed and complete Loan Documents.

 

		D.	Lender ) in its sole discretion shall be entitled to nominate 3 individual(s)and the Company shall
appoint said nominees unless in Company’s reasonable determination they find a criminal/ethical issue or conflict-of-interest
issue with Lender’s nominee to serve as a voting member of the Board of Directors of Borrower at all times during the existence
of Borrower and while it holds any of the Stock of Borrower (and not simply during the term of the Note); Lender may delegate this
appointment power to select participants in the Note.

 

		E.	The Note shall also provide that amounts due thereunder may be converted to additional Common Stock
at $0.25 per share at any time during the term of Note, by Lender or its Participant(s) on a pro rata basis, as further described
and restricted in the Note.

 

ARTICLE II. REPRESENTATIONS AND WARRANTIES

 

Each Loan Party respectively represents,
and such representations and warranties shall be deemed to be continuing representations and warranties during the entire life
of this Agreement and so long as the Note remains unpaid and outstanding under any Loan Document, as follows:

 

2.01       Due
Authorization. Each Loan Party has all requisite power and authority to execute, deliver and perform its obligations under
each Loan Document to which it is a party or is otherwise bound, all of which have been duly authorized by all necessary action,
and are not in contravention of law or the terms of any Loan Party’s organizational or other governing documents.

 

2.02       Title
to Assets. Each Loan Party has good title to all assets purported to be owned by it, including those assets identified on the
financial statements most recently delivered by Borrower to Lender, and any asset serving as collateral to secure the Notes assigned
by Guarantor to Lender as described above.

 

    	Loan Agreement	Page |2

     

    

 

2.03       Encumbrances.
There are no security interests or other Liens or encumbrances on, and no financing statements on file with respect to, any of
the Collateral of any Loan Party, except for Permitted Encumbrances.

 

2.04       Non-contravention.
The execution, delivery and performance by each Loan Party of the Loan Documents to which such Loan Party is a party or otherwise
bound, are not in contravention of the terms of any indenture, agreement or undertaking to which any such Loan Party is a party
or by which it is bound, except to the extent that such terms have been waived or that failure to comply with any such terms would
not have a Material Adverse Effect.

 

2.05       Actions,
Suits, Litigation or Proceedings. Except as is disclosed on Annex ‘C’, there are no actions, suits, litigation
or proceedings, at law or in equity, and no proceedings before any arbitrator or by or before any governmental authority, pending,
or, to the best knowledge of Borrower and Guarantor, threatened against or affecting any Loan Party, which, if adversely determined,
could materially impair the right of any Loan Party to carry on its business substantially as now conducted or could have a Material
Adverse Effect. No Loan Party is under investigation by, or is operating under any restrictions imposed by, any governmental authority.

 

2.06       Bankruptcy.
No Loan Party is involved as a debtor or obligor in any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or litigation proceeding, and to the best knowledge of Borrower, no such proceeding is contemplated by or threatened against any
Loan Party.

 

2.07       Accuracy
of Information. All financial statements previously furnished to Lender have been prepared in accordance with the Required
Accounting Method and fairly present the financial condition of Borrower and, the results of Borrower’s operations as of
the dates and for the periods covered thereby; and since the date(s) of said financial statements, there has been no material adverse
change in the financial condition of Borrower or any other person covered by such financial statements. Each Loan Party is solvent,
able to pay its debts as they mature, has capital sufficient to carry on its business and has assets the fair market value of which
exceed its liabilities, and no Loan Party will be rendered insolvent, under- capitalized or unable to pay debts generally as they
become due by the execution or performance of any Loan Document to which it is a party or by which it is otherwise bound.

 

2.08       Enforceability
of Agreement and Loan Documents. Each Loan Document has been duly executed and delivered by duly authorized officer(s) or other
representative(s) of each respective applicable Loan Party, and constitutes the valid and binding obligations of each such respective
executing Loan Party, enforceable in accordance with their respective terms, except to the extent that enforcement thereof may
be limited by applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting the enforcement of creditors
rights generally at the time in effect.

 

ARTICLE III. AFFIRMATIVE COVENANTS

 

Each Loan Party respectively covenants
and agrees that, until the Note is fully discharged and terminated, and thereafter, so long as any Indebtedness remains outstanding,
each such Loan Party will, and, as applicable, it will cause each Loan Party who is within its control or under common control
to:

 

3.01       Preservation
of Existence, Payment of Taxes. Preserve and maintain its existence and preserve and maintain such of its rights,
licenses, permits, franchise agreements, branding agreements and privileges as are material to the business and operations
conducted by it; qualify and remain qualified to do business in each jurisdiction in which such qualification is material to
its business and operations or ownership of its properties. File, on or before their respective due dates, all federal,
state, local and foreign tax returns which are required to be filed, or obtain extensions for filing such tax returns, and
pay all taxes which have become due pursuant to those returns or pursuant to any assessments received by any such party, as
the case may be, except to the extent such tax payments are being actively and diligently contested in good faith by
appropriate proceedings.

 

    	Loan Agreement	Page | 3

     

    

 

3.02       Keeping
of Books. Keep proper books of record and account in which full and correct entries shall be made of all of its financial transactions
and its assets and businesses so as to permit the presentation of financial statements prepared in accordance with the Required
Accounting Method; and permit Lender, or its representatives, at reasonable times and intervals, at Borrower’s cost and expense,
to examine its books and records and to discuss its financial matters with its officers, employees and independent certified public
accountants.

 

3.03       Reporting
Requirements. Furnish to Lender, or cause to be furnished to Lender, its financial statements and reports of each applicable
Loan Party, as reasonably requested from time to time.

 

3.04       Errors
and Omissions. In the event any of the Loan Documents contains any typographical errors or misstate or inaccurately reflect
the true and correct terms and provisions of the Loan and said misstatement or inaccuracy is due to unilateral mistake on the part
of Lender, mutual mistake on the part of the Lender and any Loan Party or simple clerical error, or if any essential documents
are not included with the legal instruments which evidence, secure or guarantee the Loan, or if through error, oversight or omission
of Lender or any third party there exists an error or omission in any documentation arising, existing, or created by or in connection
with any aspect of Lender’s underwriting, processing, documenting or the closing the Loan, or if any deficiency in any such
documentation exists with respect to any requirements of any present or future actual investor in the Loan, or if any of the Loan
Documents, signed by any Loan Party is lost, misplaced, transferred by mistake or error, damaged or destroyed before the Loan is
paid in full, or if any of the Loan Documents contains blanks or incomplete dates or recording references then in any such event,
each Loan Party hereby agrees that, upon request by Lender, and in order to correct such error, misstatement, inaccuracy, deficiency
or omission, each Loan Party shall execute such new, additional or replacement documents and instruments and initial such corrected
original documents and take such steps as Lender may deem necessary to remedy said error, misstatement, inaccuracy, deficiency
or omission, and in any event, Lender is hereby expressly authorized as a matter of convenience to complete or correct any erroneous
or inconsistent blanks, dates and recording references in the Loan Documents.

 

ARTICLE IV. EVENTS OF DEFAULT

 

4.01       Events
of Default. The occurrence or existence of any of the following conditions or events shall constitute an “Event of Default”
hereunder; (a) breach of any representation or warranty contained in this Agreement or any other Loan Document or default in the
observance or performance of any of the other conditions, covenants or agreements of any Loan Party set forth in this Agreement
or any other Loan Document; (b) any default or event of default, as the case may be, shall occur under any other Loan Document
or any other agreement with Lender, including that one certain Revolving Accounts Receivable Assignment and Term Loan Financing
and Security Agreement of Guarantors dated on or about of even date herewith, and shall continue beyond the applicable grace period,
if any; (c) any change in the management, ownership or control of Borrower or any Guarantor, whether by reason of incapacity, death,
resignation, termination or otherwise which, in Lender’s sole judgment, could become a Material Adverse Effect; and (d) if,
during the loan application process, Borrower, Guarantor or any persons or entities acting at the direction thereof or with Borrower’s
or Guarantor’s knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender
(or failed to provide Lender with material information) in connection with the Indebtedness.

 

    	Loan Agreement	Page | 4

     

    

 

4.02       Remedies
Upon Event of Default. Upon the occurrence and at any time during the existence or continuance of any Event of Default that
has not been cured within any applicable cure period, but without impairing or otherwise limiting the Lender’s right to demand
payment of all or any portion of the Indebtedness which is payable on demand, at Lender’s option, lender may give notice
to Borrower declaring all or any portion of the Indebtedness remaining unpaid and outstanding, whether under the notes evidencing
the Indebtedness or otherwise, to be due and payable in full without presentation, demand, protest, notice of dishonor, notice
of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby expressly waived, whereupon
all such Indebtedness shall immediately become due and payable. Furthermore, upon the occurrence of a Default or Event of Default
and at any time during the existence or continuance of any Default or Event of Default that has not been cured within any applicable
cure period, but without impairing or otherwise limiting the right of Lender, if reserved under any Loan Document, to make or withhold
financial accommodations at its discretion, to the extent not yet disbursed, any commitment by Lender to make any further loans,
if applicable, including under the Guarantor’s Revolving Accounts Receivable Assignment and Term Loan Financing and Security
Agreement. The foregoing rights and remedies are in addition to any other rights, remedies and privileges Lender may otherwise
have or which may be available to it, whether under this Agreement, any other Loan Document, by law, or otherwise including self-help
remedies to foreclosure or realize upon any collateral securing the Note.

 

4.03       Setoff.
In addition to any other rights or remedies of Lender under any Loan Document, by law or otherwise, upon the occurrence and during
the continuance or existence of any Event of Default that has not been cured within any applicable cure period, Lender may, at
any time and from time to time, without notice to Borrower (any requirements for such notice being expressly waived by Borrower),
setoff and apply against any or all of the Indebtedness (whether or not then due), in any manner and in any order of preference
which the Lender, in its sole discretion, chooses any or all deposits (including any reserve account under the Guarantor’s
receivables financing credit facility, or any other general or special, time or demand, provisional or final deposit) at any time
held by Borrower (whether owned outright or held with a third party) and other indebtedness at any time owing by Lender to or for
the credit or for the account of Borrower, and any property of Borrower, from time to time in possession or control of Lender,
irrespective of whether or not Lender shall have made any demand hereunder or for payment of the Indebtedness and although such
obligations may be contingent or unmatured, regardless of whether any Collateral then held by Lender is adequate to cover the Indebtedness
and regardless of whether the exercise of such right of set-off results in loss of interest or other penalty under the terms of
the certificate of deposit or account agreement. The rights of Lender under this Section are in addition to any other rights and
remedies (including, without limitation, other rights of setoff) which Lender may otherwise have. Borrower and Guarantor’s
hereby grants Lender a Lien on and security interest in all such deposits, indebtedness and other property as additional collateral
for the payment and performance of the Indebtedness.

 

4.04       Waiver
of Defaults. No Default or Event of Default shall be waived by Lender except in a written instrument specifying the scope and
terms of such waiver and signed by an authorized officer of Lender, and such waiver shall be effective only for the specific time(s)
and purpose(s) given. No single or partial exercise of any right, power or privilege hereunder, or any delay in the exercise thereof,
shall preclude other or further exercise of Lender’s rights. No waiver of any Default or Event of Default shall extend to
any other or further Default or Event of Default. No forbearance on the part of Lender in enforcing any of Lender’s rights
or remedies under any Loan Document shall constitute a waiver of any of its rights or remedies. Borrower expressly agrees that
this Section may not be waived or modified by Lender by course of performance, estoppel or otherwise.

 

4.05       Application
of Proceeds of Collateral. Notwithstanding anything to the contrary set forth in any Loan Document, after an Event of
Default, the proceeds of any of the Collateral, together with any offsets, voluntary payments, and any other sums received or
collected in respect of the Indebtedness, may be applied towards the Indebtedness in such order and manner as determined by
Lender in its sole and absolute discretion.

 

    	Loan Agreement	Page | 5

     

    

 

ARTICLE V. MISCELLANEOUS

 

5.01       Notices.
Any notice, certificate, consent, determination or other communication required or permitted to be given or made under this Agreement
shall be in writing and shall be effectively given and made if (i) delivered personally, (ii) sent by prepaid courier service or
mail, or (iii) sent prepaid by fax or other similar means of electronic communication, in each case to the following respective
addresses of the applicable Loan Party and Lender on the signature page(s) below. Any such communication so given or made shall
be deemed to have been given or made and to have been received on the day of delivery if delivered, or on the day of faxing or
sending by other means of recorded electronic communication, provided that such day in either event is a regular business day and
the communication is so delivered, faxed or sent prior to 4:30 p.m. (local recipient time) on such day. Otherwise, such communication
shall be deemed to have been given and made and to have been received on the next following business day. Any such communication
sent by mail shall be deemed to have been given and made and to have been received on the earlier of actual receipt or the fifth
business day following the mailing thereof; provided however that no such communication shall be mailed during any actual or apprehended
irregular disruption of postal services. Any such communication given or made in any other manner shall be deemed to have been
given or made and to have been received only upon actual receipt in writing.

 

5.02       Governing
Law. Each Loan Document shall be deemed to have been delivered in the State of Texas, and shall be governed by and construed
and enforced in accordance with the laws of the State of Texas, without regard to its conflicts of laws provisions, and applicable
federal law except to the extent that the Uniform Commercial Code or other personal property law or law of another jurisdiction
where Collateral is located is applicable, and except to the extent expressed to the contrary in any Loan Document.

 

5.03       Venue.
The Loan Documents are deemed executed in and are performable in Harris County, Texas. Any action or proceeding under or in connection
with any of the Loan Documents against any Loan Party ever liable for payment of any sums of money payable under the Note or other
Loan Documents may be brought in any state court located in Harris County, Texas, or in the federal court in Harris County, Texas.
Borrower for Borrower and for each such other Loan Party hereby irrevocably: (i) submits to the nonexclusive jurisdiction of such
courts, and (ii) waives any objection it may now or hereafter have as to the venue of any such action or proceeding brought in
such court or that such court is an inconvenient forum.

 

5.04       Costs
and Expenses. The Borrower agrees to pay Lender, on demand, all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration of this Agreement, the Note, the Loan Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Lender with respect
thereto and with respect to advising the Lender as to its rights and responsibilities under this Agreement and/or under any of
the other Loan Documents. Borrower shall pay Lender, on demand, all costs and expenses, including, without limitation, reasonable
attorneys’ fees and legal expenses, incurred by Lender in perfecting, revising, protecting or enforcing any of its rights
or remedies against any Loan Party or any Collateral, or otherwise incurred by Lender in connection with any Default or Event of
Default or the enforcement of the Loan Documents or the Indebtedness. Following Lender’s demand upon Borrower for the payment
of any such costs and expenses, and until the same are paid in full, the unpaid amount of such costs and expenses shall constitute
Indebtedness and shall bear interest at the highest default rate of interest provided in any Loan Document.

 

    	Loan Agreement	Page | 6

     

    

 

5.05       Receipt
of Payments by Lender. Any payment by Borrower of any of the Indebtedness made by mail will be deemed tendered and received
by Lender only upon actual receipt thereof by Lender at the address designated for such payment, whether or not Lender has authorized
payment by mail or in any other manner, and such payment shall not be deemed to have been made in a timely manner unless actually
received by Lender on or before the date due for such payment, time being of the essence. Borrower expressly assumes all risks
of loss or liability resulting from non-delivery or delay of delivery of any item of payment transmitted by mail or in any other
manner. Acceptance by Lender of any payment in an amount less than the amount then due shall be deemed an acceptance on account
only, and any failure to pay the entire amount then due shall constitute and continue to be an Event of Default. Borrower waives
the right to direct the application of any and all payments received by Lender hereunder at any time or times after the occurrence
and during the continuance of any Default. Borrower further agrees that after the occurrence and during the continuance of any
Default, Lender shall have the continuing exclusive right to apply and to reapply any and all payments received by Lender at any
time or times, whether as voluntary payments, proceeds from any Collateral, offsets, or otherwise, against the Indebtedness in
such order and in such manner as Lender may, in its sole discretion, deem advisable, notwithstanding any entry by Lender upon any
of its books and records. Borrower hereby expressly agrees that, to the extent that Lender receives any payment or benefit of or
otherwise upon any of the Indebtedness, and such payment or benefit, or any part thereof, is subsequently invalidated, declared
to be fraudulent or preferential, set aside, or required to be repaid to a trustee, receiver, or any other Person under any bankruptcy
act, state or federal law, common law, equitable cause or otherwise, then to the extent of such payment or benefit, the Indebtedness,
or part thereof, intended to be satisfied shall be revived and continued in full force and effect as if such payment or benefit
had not been made or received by Lender, and, further, any such repayment by Lender shall be added to and be deemed to be additional
Indebtedness.

 

5.06       Successors
and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Borrower, Guarantor and Lender and their
respective heirs, administrators, executors, successors and assigns. Upon approval of Lender, the Borrower may assign its rights,
duties and obligations hereunder to another entity, provided that Borrower remains liable for all its obligations under this Loan,
that the same ownership and guarantor group remains the same, and the assignee(s) agree to assume, jointly and severally with Borrower,
all Borrower obligations under this Loan, or as Lender, in its sole discretion, may otherwise may consent to.

 

5.07       Sale
of Loan. Lender may freely assign, whether by sale or transfer, or sell participation interests in, all or any portion of its
rights in and to all or any portion of the Indebtedness including the Note and Borrower’s Stock to any a third-party participant
under the Note.

 

5.08       Election
of Remedies. Lender shall have all of the rights and remedies granted in the Loan Documents and available at law or in equity
and these same rights and remedies shall be cumulative and may be pursued separately, successively, or concurrently against Borrower,
any Guarantor, Grantor, other Loan Party or any collateral property covered under the Loan Documents, at the sole discretion of
Lender.

 

5.09       Indulgence.
No delay or failure of Lender in exercising any right, power or privilege hereunder or under any of the Loan Documents shall affect
such right, power or privilege. Any single or partial exercise thereof shall not preclude any further exercise thereof.

 

5.10       Amendment
and Waiver. No course of dealings by the Lender, its officers, employees, consultants, or agents in the exercise of any right
hereunder, under the Note, or under any other of the Loan Documents shall operate as a waiver thereof. No amendment or waiver of
any provision of any Loan Document, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by Lender, and then such waiver or consent shall be effective only in the specific instance(s)
and for the specific time(s) and purpose(s) for which given.

 

    	Loan Agreement	Page | 7

     

    

 

5.11       Severability.
In case any one or more of the obligations of any Loan Party under any Loan Document shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining obligations of such Loan Party shall not in any
way be affected or impaired thereby, and such invalidity, illegally or unenforceability in one jurisdiction shall not affect the
validity, legality or enforceability of the obligations of such Loan Party under any Loan Document in any other jurisdiction.

 

5.12       WAIVER
OF JURY TRIAL. LENDER, GUARANTOR AND EACH BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION
BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTION OF EITHER OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED
IN ANY RESPECT OR RELINQUISHED BY LENDER, GUARANTOR OR ANY BORROWER, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM.

 

5.13       Execution
of Loan Documents in Counterparts. Each original of the Loan Documents executed in connection with the Loan including the Note
may be executed as counterpart originals and may contain multiple original signature pages and/or corresponding acknowledgments,
each of which shall be considered as an original, and all of which shall constitute the same agreement or document,

 

5.14       Document
Retention Policy. Each undersigned Loan Party understands and agrees that (i) Lender’s document retention policy may
involve the imaging of executed Loan Documents including the Note, as well as other miscellaneous documents, papers, reports and
other correspondence, and the destruction of the paper originals, and (ii) each undersigned Loan Party waives any right that any
Loan Party may have to claim that the imaged copies of the Note, the other Loan Documents and other miscellaneous documents, papers
and other correspondence related thereto are not originals.

 

5.15       NOTICE
UNDER SECTION 26.02 OF THE TEXAS BUSINESS & COMMERCE CODE:

 

AN AGREEMENT FOR A LOAN
IN WHICH THE AMOUNT INVOLVED IN THE LOAN EXCEEDS $50,000.00 IN VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING AND
SIGNED BY THE PARTY TO BE BOUND OR BY THAT PARTY’S AUTHORIZED REPRESENTATIVE.

 

THE RIGHTS AND OBLIGATIONS
OF THE PARTIES TO AN AGREEMENT SUBJECT TO SUBSECTION (b) OF SECTION 26.02 OF THE TEXAS BUSINESS & COMMERCE CODE SHALL BE DETERMINED
SOLELY FROM THE WRITTEN LOAN DOCUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE
LOAN DOCUMENTS.

 

THE WRITTEN LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

 

    	Loan Agreement	Page | 8

     

    

 

5.16       Form
and Substance. All documents, certificates, insurance policies, and other items required to be executed and/or delivered to
Lender, whether under this Agreement or under any of the other Loan Documents, shall be in form and substance satisfactory to Lender.

 

5.17       No
Third-Party Beneficiary. This Agreement is made for the sole protection and benefit of each Loan Party and Lender and is not
intended for the protection or benefit of any other Person, and no other Person shall be deemed to have any privity of contract
hereunder nor any right of action of any kind hereon, or be entitled to rely hereon to any extent whatsoever.

 

5.18       Time
of the Essence. Time is of the essence with respect to the dates, terms and provisions of this Agreement, and as to each and
every other Loan Document executed in connection herewith.

 

5.19       Independent
Party. It is mutually understood and agreed that Borrower is an independent party in the performance of all activities, functions,
duties and obligations pursuant to this Agreement and the other Loan Documents, and that nothing contained in this Agreement or
in any of the other Loan Documents is intended or shall be construed in any manner or under any circumstances whatsoever as creating
or establishing the relationship of co-partners, a partnership or joint venture, or joint ownership between Lender and Borrower.

 

5.20       WAIVER
OF CONSUMER RIGHTS. BORROWER AND GUARANTOR EACH WAIVE THEIR RESPECTIVE RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER
PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.
AFTER CONSULTATION WITH AN ATTORNEY OR ATTORNEYS OF BORROWER’S AND GUARANTOR’S OWN RESPECTIVE SELECTIONS, BORROWER
AND GUARANTOR EACH VOLUNTARILY CONSENTS TO THIS WAIVER.

 

ARTICLE VI. DEFINITIONS

 

6.01       Defined
Terms. In addition to terms defined elsewhere in this Agreement, the following terms, as used in this Agreement, shall have
the meanings set forth below. The singular number shall be deemed to include the plural, the masculine gender shall include the
feminine and neuter genders, and vice versa.

 

“Collateral”
shall mean, as the context dictates, all personal property of each Borrower and Guarantor, including any personal property given,
collaterally assigned, pledged or granted or to be given to secure the Indebtedness and all of the respective owner(s) rights,
title and interest in and to the same.

 

“Default”
shall mean any condition or event which, with the giving of notice or the passage of time, or both, would constitute an Event of
Default.

 

“GAAP” shall
mean generally accepted accounting principles consistently applied.

 

“Grantor”
if applicable, whether one or more, shall mean any Loan Party who shall own an interest in any property that is to be subject to
a Lien which secures any of the Indebtedness.

 

“Guarantor”
whether one or more, shall mean, as the context dictates, 5J OIL FIELD SERVICES, LLC and 5J TRUCKING, LLC, and any other
person(s) (other than the Borrower) who shall, at any time, guarantee or otherwise be or become obligated for the repayment
or the performance of all or any part of the Indebtedness.

 

    	Loan Agreement	Page | 9

     

    

 

“Indebtedness”
shall mean the Note and all loans, advances, indebtedness, obligations and liabilities of any Loan Party to Lender under any Loan
Document, together with all other indebtedness, obligations and liabilities whatsoever of Borrower to Lender, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, joint or several, due or to become due, now
existing or hereafter arising, voluntary or involuntary, known or unknown, or originally payable to Lender or to a third party
and subsequently acquired by Lender including, without limitation, any: late charges; loan fees or charges; overdraft indebtedness;
costs incurred by Lender in establishing, determining, continuing or defending the validity or priority of any Lien or in pursuing
any of its rights or remedies under any Loan Document or in connection with any proceeding involving Lender as a result of any
financial accommodation to Borrower. Indebtedness shall also include that one certain Revolving Accounts Receivable Assignment
and Term Loan Financing and Security Agreement of Guarantor dated on or about of even date herewith.

 

“Lien” shall
mean any valid and enforceable interest in any property, whether real, personal or mixed, securing an indebtedness, obligation
or liability owed to or claimed by any person other than the owner of such property, whether such indebtedness is based on the
common law or any statute or contract.

 

“Loan” shall
mean, in general, that portion of the Indebtedness evidenced by the Note and the Loan Documents.

 

“Loan Documents”
shall mean collectively, this Agreement, the Note, and any other documents, instruments or agreements evidencing, governing, securing,
guaranteeing or otherwise relating to or executed pursuant to or in connection with any of the Indebtedness or any Loan Document
(whether executed and delivered prior to, concurrently with or subsequent to this Agreement), as such documents may have been or
may hereafter be amended from time to time,

 

“Loan Party”
shall mean Borrower and each other person who shall be liable for the payment or performance of any of the Indebtedness including
any Guarantor, if any, and any Grantor who shall own any property that is subject to a Lien which secures any of the Indebtedness.

 

“Material Adverse Effect”
shall mean any act, event, condition or circumstance which could materially and adversely affect the business, operations, condition
(financial or otherwise), performance or assets of any Loan Party, the ability of any Loan Party to perform its obligations under
any Loan Document to which it is a party or by which it is bound or the enforceability of any Loan Document.

 

“Note”, shall
mean the Promissory Note of even date in the original principal sum of up to ONE MILLION SIX HUNDRED THOUSAND AND NO/100 DOLLARS
($1,600,000.00) executed by Borrower and payable to the order of Lender and all modifications, renewals, rearrangements, extensions
and increases thereof.

 

    	Loan Agreement	Page | 10

     

    

 

“Permitted
Encumbrances” shall mean: (a) Liens in favor of the Lender; (b) Liens for taxes, assessments or other governmental
charges which are not yet due and payable, incurred in the ordinary course of business and for which no interest, late charge
or penalty is attaching or which are being contested in good faith by appropriate proceedings and, if requested by Lender,
bonded in an amount and manner satisfactory to Lender; (c) Liens, not delinquent, arising in the ordinary course of business
and created by statute in connection with worker’s compensation, unemployment insurance, social security and similar
statutory obligations; (d) Liens of mechanics, materialmen, carriers, warehousemen or other like statutory or common law
Liens securing obligations incurred in good faith in the ordinary course of business without violation of any loan Document
that are not yet due and payable; and (e) Liens existing as of the date hereof which have been specifically disclosed in
writing to Lender and have been approved by Lender in writing including the UTICA
LEASECO, LLC first lien position, and Amerisource Business Capital a second lien position set forth in Annex A hereto (the
 “Third Lien Collateral”) and the accounts receivables and other intangibles for which Amerisource Business
Capital holds a first lien position, and UTICA LEASECO, LLC a second lien position under their respective loan
facilities.

 

“Person” or
 “person” shall mean any individual, corporation, partnership, joint venture, limited liability company, association,
trust, estate, unincorporated association, joint stock company, government, municipality, political subdivision or agency, or other
entity

 

“Required Accounting
Method” shall mean, with respect to the financial covenants contained herein, for each Loan Party either GAAP or cash
basis accounting principles, consistently applied, as applicable to the Loan Party.

 

6.02       Accounting
Terms. All accounting terms not specifically defined in this Agreement shall be determined and construed in accordance with
the Required Accounting Method.

 

6.03       Use
of Terms. As used herein, as applicable, the use of the singular shall include the plural and vice versa, and the use of the
masculine, feminine or neuter gender shall include the applicable gender for the Loan Party in question.

 

    	Loan Agreement	Page | 11

     

    

 

Executed in one or
more counterpart originals to be effective as of February 27, 2020 (the “Effective Date”).

 

	 	BORROWER:
	 	 	 
	 	SMG INDUSTRIES, INC.
	 	 	 
	 	By:	/s/ Matthew Flemming
	 	 	Matthew Flemming, Chief Executive Officer
	 	Address:  	710 N. Post Oak Road, Suite 315
	 	 	Houston, Texas 77024
	 	 	 
	 	LENDER:	 
	 	 	 
	 	AMERISOURCE LEASING CORPORATION,  
	 	a Texas corporation
	 	 	 
	 	By:	/s/ Jason Floyd
	 	 	 
	 	Name:	Jason FLoyd
	 	 	 
	 	Title:	Managing Director
	 	 	 
	 	Address:	7220 Langtry Street
	 		Houston, Texas 77040  
	 	 	 
	 	GUARANTOR:
	 	 	 
	 	5J OIL FIELD SERVICES, LLC, 
	 	a Texas limited liability company
	 	 	 
	 	By:	/s/ Matthew Flemming
	 	 	 
	 	Name:	Matthew Flemming
	 	 	 
	 	Title:	Manager
	 	 	 
	 	Address:	710 N. Post Oak Road, Suite 315
	 	 	Houston,
    Texas 77024
	 	 	 
	 	5J TRUCKING, LLC, 
	 	a Texas limited liability company
	 	 	 
	 	By:	/s/ Matthew Flemming
	 	 	 
	 	Name:	Matthew Flemming
	 	 	 
	 	Title:	Manager
	 	 	 
	 	Address:	710 N. Post Oak Road, Suite 315
	 	 	Houston, Texas 77024

 

    	Loan Agreement	Page | 12

     

    

 

ANNEX “A”

 

    	Loan Agreement	Page | 13

     

    

 

ANNEX “B”

 

    	Loan Agreement	Page | 14

     

    

 

 

ANNEX “C”

 

NONE

 

    	Loan Agreement	Page | 15

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