Document:

Stock Purchase Agreement Exhibit 10.3

	
 
	
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN ACQUIRED FOR INVESTMENTS AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SUCH ACT.
	
 

	
December 22, 2000
	
Warrant No. 2000-A-___

COMPRESSCO, INC.

STOCK PURCHASE WARRANT

          This Warrant is issued, for good and valuable consideration, receipt of which is hereby acknowledged, to ____________________ (the "Holder") by Compressco, Inc., a
Delaware corporation (the "Company"), and the rights of the Holder under this Warrant are pari passu with the rights of the holders of all other warrants issued by the Company pursuant to that certain Securities Purchase Agreement, dated as of December 22, 2000, by
and among the Company and the Purchasers named therein (as amended, supplemented, restated or otherwise modified from time to time, the "Purchase Agreement"). Capitalized terms used in this Warrant and not otherwise defined herein shall have the meanings set forth in the Purchase Agreement.

          1.     Purchase of Shares. Subject to the terms and conditions hereinafter set forth, the Holder is entitled, upon surrender of this Warrant at
the principal office of the Company (or at such other place as the Company shall notify the Holder hereof in writing), to purchase from the Company ______ shares of Common Stock (the "Shares"), as adjusted pursuant to the provisions of this Warrant.

          2.     Exercise Price. The exercise price for the Shares shall be equal to $120.00 per share. Such price shall be subject to adjustment
pursuant to Section 6 hereof (such price, as adjusted from time to time, is herein referred to as the "Exercise Price"). 

          3.     Exercise Period. This Warrant is exercisable at any time and from time to time and, except as provided below, shall remain so
exercisable until and including December 31, 2003. This Warrant shall immediately terminate upon (a) the sale of all or substantially all the assets of the Company or (b) the merger of the Company into or consolidation with any other entity in which at
least 50% of the voting power of the Company is transferred. In the event of a transaction of the kind described above, the Company shall notify the Holder at least 30 days prior to the consummation of such event or transaction.

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          4.     Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3 above, the Holder may exercise,
in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:

               (i)     the surrender of the Warrant, together with a duly executed copy of the form of exercise attached hereto, to the
Secretary of the Company at its principal offices; and

               (ii)     (A) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares
being purchased. Such payment may be made at the election of the Holder by reducing the principal amount under one or more Notes held by the Holder, and such an election shall be treated by the Company as a prepayment of principal under the terms of the
associated Note or Notes; or 

	
 
	
          (B)     by being exchanged in whole or in part for another Warrant (or any subdivision thereof) for a number of shares of Common Stock having an
aggregate fair market value on the date of such exercise equal to the difference between (x) the Fair Market Value of the number of shares of Common Stock subject to the Warrant designated by the Holder on the date of the exercise and (y) the aggregate
Exercise Price of the Warrant otherwise payable by the Holder hereof for such designated shares of Common Stock. Upon any such exercise, the number of shares of Common Stock purchasable upon exercise of the Warrant shall be reduced by such designated
number of shares of Common Stock, and, if a balance of purchasable shares of Common Stock remains after such exercise, the Company shall execute and deliver to the Holder hereof a new Warrant for such balance of shares of Common Stock. No payment of any
cash or other consideration shall be required. No fractional shares arising out of the above formula for determining the number of shares issuable in such exchange shall be issued, and the Company shall in lieu thereof make payment to the Holder hereof of
cash in the amount of such fraction multiplied by the fair market value of the Shares on the date of exchange. Any tax liability related to such transaction shall be paid by Holder.

	
 
	
          "Fair Market Value" means as to any exercise date, (A) the average of the last sale price of the Common Stock reported on a national securities exchange or the Nasdaq
National Market for the last five trading days prior to the exercise date, (B) the average of the last sale price for the Common Stock as reported in the consolidated transaction reporting system or securities exchange on which the Common Stock may then
be listed for trading for the last five trading days prior to the exercise date, (C) if the Common Stock is not quoted on the Nasdaq National Market or is not listed for trading on a national securities exchange, the closing bid price as published by
Nasdaq (or, if such price is not so published by Nasdaq, the average of the high and low bid prices for the Common Stock on such exercise date, as furnished by any National Association of Securities Dealers, Inc. ("NASD") member firm selected from time to time by the Company for such purpose), in either case for the five trading days prior to the exercise date, or (D) if the Common Stock is not quoted on the Nasdaq National Market, is not listed for trading
on a national securities exchange or neither Nasdaq nor an NASD member firm publishes a bid price for the Common Stock, the fair market value of the Common Stock shall be determined in good faith by the Company as of the exercise date.

	
 
	
          If the exercise date is not a business day, then the Fair Market Value shall be calculated using the next day immediately following the exercise date on which the national
securities system, the Nasdaq National Market or any other quotation system used to determine the "fair market value" of the Common Stock is open for business.

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          5.     Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of
Shares so purchased shall be issued as soon as practicable thereafter, and in any event within 30 days of the delivery of the subscription notice.

          6.     Reservation of Shares. The Company covenants that it win at all times, keep available such number of authorized shares of its Common
Stock, free from all preemptive rights with respect thereto, which will be sufficient to permit the exercise of this Warrant for the full number of Shares specified herein, upon exercise of this Warrant. The Company further covenants that such Shares,
when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof.

          7.     Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time as follows:

               (a)     Subdivisions and Combinations. If the Company shall at any time prior to the expiration of this Warrant
subdivide its Common Stock by split-up or otherwise, or combine its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision, or proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any
adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.

               (b)     Stock Dividends and Distributions. In case the Company shall at any time while this Warrant is
outstanding and unexpired pay a dividend with respect to Common Stock payable in shares of such stock, or make any other distribution with respect to such stock (except any distribution provided for in Section 7(a) or 7(c) herein), then the Exercise Price
in effect immediately prior to the record date for distribution of such dividend or in the event that no record date is fixed, upon the malting of such dividend shall be adjusted to that price determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction (i) the numerator of which shall be the total number of shares of such stock outstanding immediately prior to such dividend and (ii) the denominator of which shall be the total number of shares of such
stock outstanding immediately after such dividend.

          If the Company at any time prior to the expiration of this Warrant shall pay a dividend with respect to Common Stock payable in shares of Common Stock, or make any other
distribution with respect to Common Stock, then the Exercise Price per share shall be adjusted, from and after the date of determination of the stockholders entitled to receive such dividend or distribution, to that price determined by multiplying the per
share purchase price in effect by a fraction (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (ii) the denominator of which shall be the total number of
shares of the Common Stock outstanding immediately after such dividend or distribution.

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               (c)     Reclassification, Reorganization and Consolidation. In case of any reclassification, capital
reorganization or change in the Common Stock of the Company (other than as provided for in Sections 7(a) and (b) above), then, as a condition of such reclassification, conversion, reorganization or change, lawful provision shall be made, and duly executed
documents evidencing the same from the Company or its successor shall be delivered to the Holder of this Warrant, so that such Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that
payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization or change by a holder of the same number of shares of Common Stock as
were purchasable by the Holder of this Warrant immediately prior to such reclassification, reorganization or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder of this Warrant so that the
provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided
the aggregate purchase price shall remain the same.

               (d)     Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares
purchasable upon exercise of the Warrant, or in the Warrant Price, the Company shall promptly notify the Holder of such event and of the number of shares of Common Stock or other securities or property thereafter purchasable upon exercise of the Warrant.

          8.     No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant, and the number of shares of stock issued
upon exercise of this Warrant shall be rounded to the nearest whole share.

          9.     No Stockholder Rights. Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with
respect to the Shares, including (without limitation) theright to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and such Holder shall not be entitled to any
notice or other communication concerning the business or affairs of the Company.

          10.     Exchange of Warrant. Subject to any restriction upon transfer set forth in this Warrant, each Warrant may be exchanged for another
Warrant or Warrants of like tenor and representing in the aggregate a like number of Warrants. Any Holder desiring to exchange a Warrant or Warrants shall make such request in writing delivered to the Company, and shall surrender, properly endorsed, the
Warrant or Warrants to be so exchanged.

          11.     Mutilated or Missing Warrants. In case any Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue and deliver
in exchange and substitution for and upon cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and representing an equivalent right or interest, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or destruction of such Warrant and indemnity or bond, if requested, also reasonably satisfactory to the Company. An applicant for such substitute Warrant shall also comply with such
other reasonable regulations and pay such other reasonable charges as the Company may prescribe.

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          12.     Payment of Taxes. The Company will pay all taxes (other than any income taxes or other similar taxes), if any, attributable to the
initial issuance of the Warrant and the issuance of the Shares upon the exercise of the Warrant, provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of the issuance or delivery of any Warrant,
or the transfer thereof, and no such issuance, delivery or transfer shall be made unless and until the person requesting such issuance or transfer has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company,
that no such tax is payable or such tax has been paid. 

          13.     Registration. The Warrants shall be numbered and shall be registered on the books of the Company (the "Warrant Register") as
they are issued. The Company shall be entitled to treat the registered holder of any Warrant on the Warrant Register as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such
Warrant on the part of any other person, and shall not be liable for any registration or transfer of Warrants which are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a
fiduciary or nominee is committing a breach of trust in requesting such registration of transfer, or with knowledge of such facts that its participation therein amounts to bad faith.

          14.     Transfer of Warrants. The Warrants shall be transferable on the Warrant Register only upon delivery thereof duly endorsed by the Holder
or by his duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or authority to transfer. The Holder may not sell, assign (by operation of law or otherwise), transfer, pledge, grant a security interest in,
or otherwise dispose of this Warrant or any portion hereof or any rights or obligations hereunder except in compliance with Section 9.5 of the Purchase Agreement, which contains certain restrictions on the transferability hereof In all cases of transfer
by an attorney, the original power of attorney, duly approved, or an official copy thereof, duly certified shall be deposited with the Company. In case of transfer by executors, administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be deposited with the Company in its discretion. Upon any registration of transfer, the Company shall deliver a new Warrant or Warrants to the Person entitled thereto. Notwithstanding
the foregoing, the Company shall have no obligation to cause Warrants to be transferred on its books to any Person, unless the Holder of such Warrants shall furnish to the Company evidence of compliance with the Securities Act of 1933, as amended, and
applicable state blue sky laws.

          15.     Successors and Assigns. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and
the holders hereof and their respective successors and assigns.

          16.     Amendments and Waivers. This Warrant may be amended, modified, superseded or cancelled, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, only by a written instrument that satisfies the requirements of Section 10.2 of the Purchase Agreement. Any waiver or amendment effected in accordance with this Section shall be binding upon
each holder of any Shares purchased under this Warrant at the time outstanding (including securities into which such Shares have been converted), each future holder of all such Shares, and the Company.

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          17.     Governing Law. This Warrant and the validity and enforceability hereof shall be governed by and construed and interpreted in accordance
with the laws of the State of Delaware without giving effect to conflict of laws rules or choice of laws rules thereof.

          IN WITNESS WHEREOF, the undersigned hereby executes this Stock Purchase Warrant as of the date first written above.

	
 
	
COMPRESSCO, INC.

By:_____________________________________

     Brooks Mims Talton

     Chief Executive Officer

	
 

	
 

	
 

 

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NOTICE OF EXERCISE

To:     Compressco, Inc. (the "Company")

          (1)     The undersigned ("Purchaser") hereby elects to exercise its rights to purchase shares of the Common Stock of the Company (the "
Securities") pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price in fun, together with all applicable transfer taxes, if any.

          (2)     Please issue a certificate or certificates representing the Securities in the name of the undersigned Purchaser:

________________________________________

(Name)

________________________________________

(Address)

          (3)     With respect to the Securities being purchased hereunder, the Purchaser makes, as of the date hereof, all of the representations and
warranties set forth below: 

                    (a)     Purchaser is aware of the Company's business affairs and financial condition and
has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Purchaser is purchasing these Securities for its own account for investment purposes only and not with a view to, or for the
resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended ("Securities Act").

                    (b)     Purchaser understands that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of its investment intent as expressed herein. In this connection, Purchaser understands that, in the view of the
Securities and Exchange Commission ("SEC"), the statutory basis for such exemption may be unavailable if its representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future.

                    (c)     Purchaser further understands that the Securities must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from registration is otherwise available. In addition, Purchaser understands that the instruments or certificates evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

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                    (d)     Purchaser is aware of the provisions of Rule 144, promulgated under the Securities
Act, which in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions,
including, among other things: the availability of certain public information about the Company; the resale occurring not less than two years after the party has purchased and paid for the securities to be sold; the sale being made through a broker in an
unsolicited "broker's transaction' or in transactions directly with a market the Company (as said term is defined under the Securities Exchange Act of 1934, as amended) and the amount of securities being sold during any three month period not exceeding
the specified limitations stated therein.

                    (e)     Purchaser further understands that at the time Purchaser wishes to sell the
Securities there may be no public market upon which to make such a sale, and that, even if such a public market then exists the Company may not be satisfying the current public information requirements of Rule 144, and that, in such event, Purchaser could
be precluded from selling the Securities under Rule 144 even if the two-year minimum holding period had been satisfied.

                    (f)     Purchaser further understands that in the event all of the requirements of Rule
144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the SEC has expressed its
opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

	
____________________________________

(Date)
	
___________________________________

(Signature)

 

 

 

 

 

8This Note has not been registered under the

This Note has not been registered under the

Securities Act of 1933, as amended, and may be

offered and sold only if so registered or, in

the opinion of counsel acceptable to

the Company, an exemption from

registration is available.

COMPRESSCO, INC.

13% SUBORDINATED PROMISSORY NOTE

	
December 22, 2000

$__________
	
 
	
Note No. 13-A-_____

          For value received, Compressco, Inc., a Delaware corporation (the "Company"), hereby promises to pay to _______________________ (the "Holder"), or registered assigns, the
principal sum of _________________________________________ ($__________), on the dates specified herein, with interest as specified herein.

          This Note is subject to the following additional provisions, terms and conditions:

	
 
	
ARTICLE 1.
	
DEFINITIONS.

                    Section 1.1     Certain Definitions.

                    "Applicable Rate" means 13% per annum.

                    "Debt" with respect to any Person, without duplication, (i) any liability, contingent or otherwise, of such
Person (A) for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (B) evidenced by a note, debenture, letter of credit or similar instrument (including a purchase money
obligation) representing extensions of credit whether or not representing obligations for borrowed money or (C) for the payment of money relating to a capitalized lease obligation or other obligation relating to the deferred purchase price of any property
or services (other than property or services purchased on ordinary trade terms therefor); (ii) any liability of others of the kind described in the preceding clause (i) to the extent that the Person has guaranteed same or which is otherwise its legal
liability; (iii) any obligation secured by a lien to which the property or assets of such Person are subject, whether or not the obligations secured thereby shall have been assumed by or shall otherwise be such Person's legal liability; and (iv) any and
all deferrals, renewals, extensions, replacements, refinancings and refundings of, or amendments, modifications or supplements to, any liability of the kind described in any of the preceding clauses (i), (ii) or (iii).

                    "Default Rate" means 14% per annum.

                    "Holder" has the meaning given to such term in the first paragraph of this Note.

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                    "Interest Payment Date" means each March 31, June 30, September 30 and December 31,
commencing March 31, 2001.

                    "Maximum Rate" means the maximum nonusurious interest rate permitted under applicable law.

                    "Note" means this Subordinated Promissory Note made by the Company payable to the Holder, together with all
amendments and supplements hereto, all substitutions and replacements herefore, and all renewals, extensions, increases, restatements, modifications, rearrangements and waivers hereof from time to time.

                    "Notes" means this Note, together with all amendments and supplements hereto, all substitutions and
replacements herefore, and all renewals, extensions, increases, restatements, modifications, rearrangements and waivers hereof from time to time.

                    "Person": any corporation, individual, partnership (limited or general), limited liability company,
governmental body or other entity.

                    "Purchase Agreement" means that certain Securities Purchase Agreement, dated as of December 22, 2000, by and
among the Company and the Purchasers named therein, as such may be amended, supplemented, restated or otherwise modified from time to time.

                    "Senior Debt" at any date, the principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition in bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Debt of the Company whether outstanding on the date of
original issuance of this Note or hereafter incurred, unless, in the case of any particular Debt, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Debt shall not be senior in right of
payment to this Note. Notwithstanding the foregoing, Senior Debt shall not include: (i) Debt evidenced by this Note or other Notes of the same series as this Note; and (ii) Debt of the Company to a subsidiary or other affiliate of the Company or to the
principal shareholders of the Company, the principal shareholders of affiliates of the Company and their respective affiliates.

                    Section 1.2     Incorporated Definitions. Capitalized terms used in this Note and
not otherwise defined herein shall have the meanings set forth in the Purchase Agreement.

	
 
	
ARTICLE 2.
	
BASIC TERMS.

                    Section 2.1     Identification. This Note is one of the Notes referred to in the
Purchase Agreement and is entitled to the benefits thereof, including, but not limited to, Article 8 thereof, which sets forth certain Events of Default and remedies.

                    Section 2.2     Principal.

                    (a)     Scheduled Repayment. The principal of this Note shall be due and payable
upon the earlier of (i) the date of the closing of an underwritten public offering of the Company's equity interests following the date hereof and (ii) December 31, 2003 (the "Maturity Date").

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                    (b)     Optional Prepayment. The Company may at any time and from time to time
prepay all or any part of the unpaid principal balance of this Note without premium or penalty. All optional prepayments shall be accompanied by all accrued interest on the principal amount being prepaid to the date of prepayment and all partial
prepayments shall be in the amount of $10,000 of principal or more.

                    Section 2.3     Interest.

                         (a)     The Company agrees to pay interest in respect of the
unpaid principal amount of this Note at a rate per annum equal to the lesser of the Applicable Rate and the Maximum Rate. Notwithstanding the preceding sentence, the Company agrees to pay interest in respect of overdue principal, and, to the extent
permitted by law, overdue interest, at a rate per annum equal to the lesser of the Default Rate and the Maximum Rate.

                         (b)     Interest on the principal of this Note shall be due
and payable (i) on each Interest Payment Date and the Maturity Date, (ii) upon the payment or prepayment, in full or in part, of any of the principal of this Note, (iii) at the maturity of this Note (whether by acceleration or otherwise), and (iv) after
maturity (whether by acceleration or otherwise), on demand.

                         (c)     All computations of interest, both before and after
maturity, shall be made on the basis of a year of 365 days (or 366 days, as applicable) for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.

                    Section 2.4     Payments in General. Whenever any payment to be made under this
Note shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the applicable rate during
such extension. Each payment received by the Holder shall be applied first to late charges and collection expenses, if any, then to the payment of accrued but unpaid interest hereunder, and then to the reduction of the unpaid principal balance hereof.

                    Section 2.5     Surrender of Note on Payment. Upon any partial prepayment of this
Note, this Note may, at the option of the Holder or if requested by the Company, and shall, as a condition to transfer, be surrendered to the Company in exchange for a new Note in a principal amount equal to the principal amount remaining unpaid on the
surrendered Note, or made available to the Company for notation thereon of the portion of the principal and interest so prepaid. In case the entire principal amount of this Note is prepaid, this Note shall be surrendered to the Company for cancellation
and shall not be reissued.

                    Section 2.6     Subordination. The Company agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, that the payment of the principal of and interest on this Note is expressly subordinated to the extent and in the manner hereinafter set forth, to the prior indefeasible payment in full of all Senior Debt.

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          Upon any payment or distribution of the assets of the Company in connection with any dissolution, winding up, total or partial liquidation or reorganization of the Company
(whether voluntary or involuntary, or in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Company or otherwise) ("Liquidation"), the holders of all Senior Debt shall first be entitled to receive payment in full in cash (or, if accepted voluntarily by such holders, in other property or securities) in accordance with the terms of such Senior Debt of the
principal thereof (and premium, if any) and the interest due thereon before the Holder shall be entitled to receive any payment upon the principal or interest on indebtedness evidenced by this Note; and, upon any Liquidation, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property, or securities (other than shares of capital stock of the Company as reorganized or readjusted or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated, at least to the extent provided herein, to the indefeasible payment in full of all Senior Debt, which may at the time be outstanding and which are provided for by a plan of
reorganization or readjustment which does not alter the rights of the holders of Senior Debt, which may at the time be outstanding ("Distributable Securities")), to which the Holder would be entitled, except for the provisions of this section, shall be made by the liquidating trustee in bankruptcy, a receiver or liquidating trustee or otherwise, direct to the holders of Senior
Debt, or their representatives or trustees under any indenture under which such instruments evidencing any of such Senior Debt may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the principal of (and premium,
if any), and interest on the Senior Debt held or represented by each, to the extent necessary to pay in full in cash (or, if accepted voluntarily by such holders, in other property or securities) all Senior Debt remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt.

          If, notwithstanding the foregoing, upon any such Liquidation, any payment, or distribution of assets of the Company of any kind or character, whether in cash, property, or
securities (other than Distributable Securities) shall be received by the Holder before all Senior Debt is paid in full, such payment or distribution shall be paid over in the form received to the holders of such Senior Debt, or their representatives or
the trustee under any indenture under which any instruments evidencing any of such Senior Debt may have been issued, ratably as aforesaid, for application to the payment of all Senior Debt remaining unpaid until all of such Senior Debt shall have been
paid in full in cash, after giving effect to the concurrent payment or distribution to the holders of any of such Senior Debt.

          The Holder will not accelerate the maturity of any obligations under this Note or institute any proceedings or seek any other remedy allowed at law or in equity to enforce
payment of this Note prior to the acceleration of all outstanding Senior Debt; provided, however, that if for any reason the acceleration of any Senior Debt is rescinded, the acceleration of the maturity of this Note will be automatically rescinded
contemporaneously therewith irrespective of any action or failure to act of Holder.

          Each perfected security interest in any property of the Company in favor of or held for the benefit of any holder of the Senior Debt has and shall have priority over any
security interest that Holder has or may hereafter acquire in and to such property as security for this Note, notwithstanding any statement or provision contained in any documents which purport to grant a security interest to Holder as security for this
Note to the contrary and irrespective of the time or order of filing or recording of any documents or instruments or the laws or regulations ordinarily governing such priorities.

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          Upon the payment in full in cash (or, if accepted voluntarily by such holders, in other property or securities) of all Senior Debt, the Holder shall be subrogated to the
rights of the holders of Senior Debt to receive payments or distributions of assets of the Company applicable to the Senior Debt until this Note shall have been paid in full in cash and none of the payments or distributions to the holders of Senior Debt
to which the Holder would be entitled except for the subordination provisions of this Note or the payments over, pursuant to the subordination provisions of this Note, to the holders of the Senior Debt by the Holder shall, as between the Company, its
creditors other than the holders of Senior Debt, and the Holder, be deemed to be a payment by the Company to or on account of the Holder; it being understood that the subordination provisions of this Note are intended solely for the purpose of defining
the relative rights of the Holder on the one hand, and the holders of Senior Debt on the other hand, and nothing contained in the subordination provisions or elsewhere in this Note is intended to or shall impair the obligation of the Company to pay to the
Holder the principal and interest on this Note as and when the same shall become due and payable in accordance with its terms unless there has been a default under or breach of the terms of any Senior Debt or to affect the relative rights of the Holder
and the creditors of the Company other than the holders of Senior Debt, nor shall anything herein or therein prevent the Holder from exercising all remedies otherwise permitted by applicable law upon default under this Note, subject expressly to the other
provisions of this Section 2.6 relating to a default on any Senior Debt or Liquidation proceedings or other events, actions or circumstances adversely affecting the rights of the Holder relative to the rights of the Senior Debt holders.

          Subject expressly to the other provisions of this Section 2.6, nothing contained herein shall prevent the Company, at any time, except during the pendency of any Liquidation
proceedings herein referred to, from making payments to the Holder at any time of the principal of or interest on this Note in accordance with the payment provisions herein; provided, however, that no such payment shall be made at any time if as a result
thereof the Company immediately thereafter shall be in default under any of its obligations with respect with respect to Senior Debt, whether or not any default might have existed prior thereto.

          Following the occurrence of any default on Senior Debt which is thereafter cured or waived prior to the acceleration of Senior Debt by the holders thereof, then such overdue
principal and premium, if any, and interest on the Senior Debt shall first be paid, in full, or such payment shall have been duly provided for, before any payment, by means of redemptions or purchases, or otherwise on account of principal or interest is
made upon this Note.

          If the Holder shall receive any payment on this Note which it is not entitled to receive under the above paragraphs, the Holder will hold any amount so received in trust for
the holders of Senior Debt and will forthwith turn over such payment to the holders of Senior Debt in the form received to be applied on the Senior Debt.

          No payment on account of principal of, premium (if any) or interest on, or fees, expenses or other amounts whatsoever in connection with, the Note will be made by the Company
or accepted by Holder at any time unless (a) at the time of such payment, or immediately after giving effect thereto, no default under the terms of any of the Senior Debt will have occurred and be continuing, and (b) such payment will not result in a
breach or violation of any provision of any loan agreement or other document securing payment of, or governing the terms of payment of, the Senior Debt.

5

          No act, failure to act or noncompliance of the Company with respect to any of the provisions of this Note shall prejudice or impair in any way the right of any holder of
Senior Debt to the benefit of the subordination provisions hereof, irrespective of any knowledge or notice which such holder may have.

          The Holder, by acceptance hereof, shall undertake and agree for the benefit of each holder of Senior Debt to execute, certify, deliver, and file any proofs of claim, consents,
assignments or other instruments which any holder of Senior Debt may at any time require in order to prove and realize upon any rights or claims pertaining to this Note and to effectuate the full benefits of the subordination contained herein; and upon
failure of the Holder so to do, any such holder of Senior Debt shall be irrevocably appointed the agent and attorney-in-fact of the Holder to execute, verify, deliver, and file any such proofs of claim, consents, assignments, or other instruments.

          The Holder hereby acknowledges that as of the date hereof, Hibernia National Bank is the holder of certain Senior Debt. The Holder agrees to provide notice to Hibernia
National Bank, 313 Carondelet Street, New Orleans, LA 70130, Attention: Asset Based Lending Department, of the occurrence of any default under this Note within ten (10) days of the occurrence of same.

	
 
	
ARTICLE 3.
	
MISCELLANEOUS.

                    Section 3.1     Amendment. This Note may be amended, modified, superseded or
cancelled, and any of the terms, covenants, representations, warranties or conditions hereof and thereof may be waived, only by a written instrument that satisfies the requirements of Section 9.2 of the Purchase Agreement.

                    Section 3.2     Successors and Assigns.

                         (a)     The rights and obligations of the Company and the
Holder under this Note shall be binding upon, and inure to the benefit of, and be enforceable by, the Company and the Holder, and their respective permitted successors and assigns.

                         (b)     The Holder may not sell, assign (by operation of law
or otherwise), transfer, pledge, grant a security interest in, or otherwise dispose of this Note or any portion hereof or any rights or obligations hereunder except in compliance with Section 9.5 of the Purchase Agreement, which contains certain
restrictions on the transferability hereof.

                         (c)     The registered owner of this Note may be treated as
the owner of it for all purposes.

6

                    Section 3.3     Governing Law. This Note and the validity and enforceability hereof
shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware without giving effect to conflict of laws rules or choice of laws rules thereof.

                    Section 3.4     Waivers. Except as may be otherwise provided herein, the Company,
signers, sureties, guarantors and endorsers of this Note severally waive demand, presentment, notice of dishonor, notice of intent to demand or accelerate payment hereof, notice of acceleration, diligence in collecting, grace, notice, and protest, and
agree to one or more extensions for any period or periods of time and partial payments, before or after maturity, without prejudice to the Holder.

                    Section 3.5     No Waiver by Holder. No failure or delay on the part of the Holder
in exercising any right, power or privilege hereunder and no course of dealing between the Company and the Holder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

                    Section 3.6     Limitation on Interest. Notwithstanding any other provision of this
Note, interest on the indebtedness evidenced by this Note is expressly limited so that in no contingency or event whatsoever, whether by acceleration of the maturity of this Note or otherwise, shall the interest contracted for, charged or received by the
Holder exceed the maximum amount permissible under applicable law. If from any circumstances whatsoever fulfillment of any provisions of this Note or of any other document evidencing, securing or pertaining to the indebtedness evidenced hereby, at the
time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstances the
Holder shall ever receive anything of value as interest or deemed interest by applicable law under this Note or any other document evidencing, securing or pertaining to the indebtedness evidenced hereby or otherwise an amount that would exceed the highest
lawful rate, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing under this Note or on account of any other indebtedness of the Company to the Holder, and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal of this Note and such other indebtedness, such excess shall be refunded to the Company. In determining whether or not the interest paid or payable with respect to any indebtedness of the Company
to the Holder, under any specific contingency, exceeds the highest lawful rate, the Company and the Holder shall, to the maximum extent permitted by applicable law, (a) characterize any non-principal payment as an expense, fee or premium rather than as
interest, (b) exclude voluntary prepayments and the effects thereof, (c) amortize, prorate, allocate and spread the total amount of interest throughout the term of such indebtedness so that the actual rate of interest on account of such indebtedness does
not exceed the maximum amount permitted by applicable law, and/or (d) allocate interest between portions of such indebtedness, to the end that no such portion shall bear interest at a rate greater than that permitted by applicable law. The terms and
provisions of this paragraph shall control and supersede every other conflicting provision of this Note and all other agreements between the Company and the Holder.

7

                    EXECUTED as of the date first written above.

	
 
	
COMPRESSCO, INC.

 

	
 
	
By:
	
__________________________________

Brooks Mims Talton

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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