EXHIBIT 10.8

INDIVIDUAL LEASING RECORD NO. 63

Relating to Lease Schedule No. 63 dated December 11, 2008, to
Equipment Leasing Agreement Described Below.

EQUIPMENT LEASED

New or

Qty.

Used

Make/Manufacturer and Description

Model No

Serial No.

4

New

2009 Peterbilt Tractors

388

1XPWD49X39D770316

1XPWD49X09D769897

1XPWD49X49D769899

1XPWD49X39D769893

Location of Equipment:

240 Jasmine Road

Crowley

Acadia

LA

70526

(Street Address)

(Town/City)

(Parish)

(State)

Zip)

Date of Delivery of Equipment: December 3, 2008.

1.		Total Acquisition Cost: S447.717.20.
2.		Lease Term: Sixty (60) calendar months (plus, if applicable, any partial first month) commencing on the date of this Individual Leasing Record and ending on January 9, 2014.
3.		Rent:		(a) for each full calendar month: $6,646.81 (plus applicable sales/use tax), payable on the 9th day of each calendar month, in advance, commencing on January 9, 2009, and the same amount on the 9th day of each consecutive month thereafter throughout the lease term.
				(b) for partial first month: $6,425.24 (plus applicable sales/use tax), payable on December 11, 2008.
4.		The undersigned Lessee hereby acknowledges that it has reviewed and approved the purchase order, supply contract or purchase agreement covering each Item of Equipment described above and that each such Item (i) was selected by Lessee, (ii) has been, as of the Date of Delivery of Equipment specified hereinabove, delivered to, and inspected by, Lessee, (iii) is of a size, design, capacity, and manufacture acceptable to Lessee and suitable for purposes of accepting those items under the Lease and making them subject to the Schedule and the Lease, (iv) is in good working order, repair, and condition, (v) has been installed to Lessee’s satisfaction and unconditionally and irrevocably accepted by Lessee, and (vi) has been tested by Lessee (to the extent Lessee deems appropriate in order to make this certification. The undersigned Lessor and the undersigned Lessee hereby agree that the Equipment described above is hereby leased from Lessor to Lessee under the Equipment Leasing Agreement between Lessor and Lessee dated as of October 2, 2001 (the “Lease”), is subject to all of the terms, conditions, and provisions thereof, as supplemented by the terms, conditions, and provisions of the above-referenced Lease Schedule and any Riders annexed to and made a part of said Lease Schedule, and the terms and conditions hereof, and that this Individual Leasing Record is made a part of, and incorporates by reference all of the terms, conditions, and provisions of, the Lease. The undersigned Lessee hereby agrees to pay the rent for all Items of Equipment covered by this Individual Leasing Record, in the amounts and at the times specified above and reaffirms its acknowledgments and agreements in Section 4 of the Lease. Capitalized terms used herein shall have the meaning given to such terms in the Lease.

Dated: December 11, 2008.

Francis’ Drilling Fluids, Ltd. (Lessee)				Capital One, National Association (Lessor)
By:		/s/ Michael G. Francis		By:
Name:		Michael G. Francis		Name:
Title:		President		Title:

ELF#14A
Ind. Lsg Rec.
Capital One ELF #14.1 (04/24/06)

LEASE SCHEDULE NO. 63

     Lease Schedule No. 63 to, and made part of, Equipment Leasing Agreement dated as of October 2, 2001 (herein called the “Lease”), between Capital One, National Association (herein called “Lessor”) and Francis’ Drilling Fluids, Ltd. (herein called “Lessee”). All capitalized terms used herein which are defined in the Lease are used herein so defined.

1.

Description of the Equipment covered by this Schedule (the “Equipment”):

New or

Qty.

Used

Make/Manufacturer and Description

Model No.

Serial No.

4

New

2009 Peterbilt Tractors

388

1XPWD49X39D770316

1XPWD49X09D769897

1XPWD49X49D769899

1XPWD49X39D769893

2.

Location of Equipment: 240 Jasmine Road

Crowley

Acadia

LA

70526

(Street Address)

(Town/City)

(Parish)

(State)

(Zip)

3.		The aggregate Acquisition Cost of the Equipment shall not exceed $447,717.20, and the Equipment shall not be delivered and accepted by Lessee after December 31, 2008, unless Lessor otherwise agrees in writing. Lessor shall have no obligation to acquire and lease any Item of Equipment to Lessee if (a) a material adverse change in the financial condition of Lessee (or of any guarantor of Lessee’s obligations under the Lease) has occurred since October 13, 2008, or (b) an event which is (or with notice or lapse of time or both would become) an Event of Default under the Lease has occurred.
4.		Rent (as a percentage of Acquisition Cost of each Item of the Equipment): 1.484600% for each full calendar month, and N/A% for each day of any partial first month. Lessee shall pay the rent to Lessor in advance during the lease term on the dates specified in the Individual Leasing Record for each Item of the Equipment.
5.		Lease Term of the Equipment: sixty (60) full calendar month (plus any partial first month), commencing, as to each Item, on the date of the Individual Leasing Record therefore, and unless sooner terminated in accordance with the provisions of the Lease, ending on the date specified in such Individual Leasing Record.
6.		Terminal Rental Adjustment Clause: See Section 24 of the Lease.
7.		Casualty Loss Value Payment Date:
		þ The rent payment date next preceding or coincident with the date of loss (if rent is paid in advance); or
		o The rent payment date next following the date of loss (if rent is paid in arrears).
8.		Comprehensive Public Liability Insurance: $1,000,000.00 per occurrence. Property Damage Insurance: In an amount equal to the Acquisition Cost.
9.		Other Conditions or Riders (if none, so state): Tax Indemnification Rider, Motor Vehicle Rider, Terminal Rental Adjustment Rider, and Trac Rider Business Use.

Dated: December 11, 2008.

Francis’ Drilling Fluids, Ltd. (Lessee)				Capital One, National Association (Lessor)
By:		/s/ Michael G. Francis		By:
Name:		Michael G. Francis		Name:
Title:		President		Title:

ELF#7B
Lse.Sched.2/TRAC
Capital One ELF #7.2 (04/24/06)

SCHEDULE OF CASUALTY LOSS VALUES

THIS SCHEDULE is annexed to, and made part of, Individual Leasing Record No. 63 of Lease Schedule No. 63 to the Equipment Leasing Agreement dated as of October 2, 2001, between Capital One, National Association (“Lessor”) and Francis’ Drilling Fluids, Ltd. (“Lessee”).

Francis Drilling Fluids, Ltd
Schedule 63, Record 63

Termination Schedule

						termination												termination
		termination				value								termination				value
date		value				% of basis				date				value				% of basis
Dec-08			441,291.96				98.56488873			Jan-12					249,499.74				55.72708320
Jan-09			436,858.60				97.57467476			Feb-12					243,741.57				54.44096528
Feb-09			432,358.22				96.56948976			Mar-12					237,949.65				53.14731130
Mar-09			427,828.63				95.55778387			Apr-12					232,123.88				51.84609405
Apr-09			423,269.75				94.53953352			May-12					226,298.08				50.54487006
May-09			418,632.06				93.50368078			Jun-12					220,443.13				49.23713748
Jun-09			413,956.09				92.45927721			Jul-12					214,588.04				47.92937190
Jul-09			409,200.83				91.39716578			Aug-12					208,703.72				46.61507682
Aug-09			404,406.92				90.32641960			Sep-12					202,785.20				45.29314387
Sep-09			399,582.75				89.24891562			Oct-12					196,866.27				43.97112065
Oct-09			394,678.70				88.15357029			Nov-12					190,917.91				42.64252237
Nov-09			389,735.51				87.04948400			Dec-12					184,935.12				41.30623453
Dec-09			384,761.53				85.93851943			Jan-13					178,951.66				39.96979853
Jan-10			379,707.07				84.80957858			Feb-13					172,938.57				38.62674141
Feb-10			374,612.99				83.67178939			Mar-13					166,890.81				37.27594248
Mar-10			369,487.57				82.52700014			Apr-13					160,808.26				35.91737377
Apr-10			364,330.70				81.37518552			May-13					154,724.65				34.55856706
May-10			359,148.53				80.21772107			Jun-13					148,611.07				33.19306771
Jun-10			353,934.97				79.05324404			Jul-13				142,496.31					31.82730241
Jul-10			348,695.88				77.88306611			Aug-13					136,351.48				30.45482225
Aug-10			343,425.22				76.70583497			Sep-13					130,171.51				29.07449395
Sep-10			338,122.57				75.52146123			Oct-13					123,990.08				27.69383991
Oct-10			332,794.04				74.33130637			Nov-13					117,778.38				26.30642340
Nov-10			327,433.65				73.13403444			Dec-13					111,531.30				24.91110481
Dec-10			322,040.96				71.92954751			Jan-14					111,929.30				25.00000000
Jan-11			316,622.01				70.71919833
Feb-11			311,170.92				69.50166755
Mar-11			305,687.19				68.27684856
Apr-11			300,170.72				67.04471502
May-11			294,641.48				65.80973054
Jun-11			289,081.90				64.56796745
Jul-11			283,509.37				63.32331459
Aug-11			277,906.36				62.07185222
Sep-11			272,270.17				60.81297902
Oct-11			266,620.73				59.55114706
Nov-11			260,940.56				58.28245068
Dec-11			255,226.93				57.00628120

Dated: December 11, 2008.

Francis’ Drilling Fluids, Ltd. (Lessee)				Capital One, National Association (Lessor)
By:		/s/ Michael G. Francis		By:
Name:		Michael G. Francis		Name:
Title:		President		Title:

ELF#8
Sched.Cas.LossValues
Capital One ELF #8 (04/24/06)

MOTOR VEHICLE RIDER

THIS RIDER, is annexed to, and made a part of Lease Schedule No. 63 (the “Schedule”), to the Equipment Leasing Agreement dated as of October 2, 2001 (the “Lease”), between Capital One, National Association (“Lessor”) and Francis Drilling Fluids, Ltd. (“Lessee”).

Lessor and Lessee acknowledge that certain of the Equipment to be leased under the Lease will consist of motor vehicles (“Vehicular Equipment”). In addition to, and not in limitation of, all of the terms, conditions, and provisions of the Lease and Schedule, the following terms and provisions shall apply to each unit of Vehicular Equipment.

(a) Lessee shall not use Vehicular Equipment, nor allow the same to be used, for any unlawful purpose, nor for the transportation of any property or material deemed extra hazardous except material normally needed and used in Lessee’s business, and Vehicular Equipment shall be operated only by safe, careful, and licensed drivers to be selected, employed, controlled, and paid by Lessee;

(b) Lessee’s drivers shall conclusively be presumed to be the agents of Lessee, shall be required to operate Vehicular Equipment with reasonable care and diligence and to use normal reasonable precautions to prevent loss or damage to Vehicular Equipment because of fire, theft, or collision, and Lessee’s drivers, servants, and agents shall cooperate fully with Lessor and all insurance companies providing insurance under this Lease in the investigation and defense of any claims and suits arising from the operation of Vehicular Equipment;

(c) Lessee will, at its sole expense, (i) supply and replace all parts and tires for Vehicular Equipment, (ii) supply the necessary gasoline, oil, grease, and other items required in the operation of Vehicular Equipment, and (iii) arrange for the satisfactory garaging, if applicable, of Vehicular Equipment;

(d) Lessee will, at its expense, obtain all titles, registrations, registration plates, permits, and licenses, including all renewals thereof, required for the lawful ownership, use, and operation of Vehicular Equipment, and will (i) cause Vehicular Equipment to be titled and registered in the name of Lessor as owner and with Lessee to be shown as the lessee, and (ii) cause all such certificates of title to be promptly furnished to Lessor and all certificates of registration (and where required by applicable law, a copy of the Lease) to be retained in the unit(s) of Vehicular Equipment. Lessor shall furnish Lessee with appropriate powers of attorney for the sole and limited purpose of effecting said titling, registration, and licensing. Lessee will not place Vehicular Equipment in operation until same has been properly titled, registered, and licensed as aforesaid;

(e) In addition to the insurance coverages specified in Section 11 of the Lease, Lessee will also cause to be carried and maintained, at its sole expense, and in the same amounts required under said Section, theft and collision insurance, with such deductible as may be satisfactory to Lessor;

(f) in addition to the indemnities set forth in Section 7 of the Lease, Lessee will pay when due, and will indemnify, protect, save, defend, and hold Lessor and its assigns harmless from and against (i) any obligations, license or other fees, liabilities, losses, damages, penalties, claims, actions, suits, costs, and expenses, including legal expenses, of every kind and nature whatsoever imposed on, incurred by, or asserted against Lessor, its agents, employees, officers, directors, successors, and assigns in any way relating to or arising out of any power of attorney issued by Lessor to any person or persons designated in writing by Lessee to apply on behalf of Lessor for applications for the licensing, re-licensing, titling, re-titling, registration or re-registration of Vehicular Equipment, or any odometer certification with respect to Vehicular Equipment, and (ii) all towing charges, parking tolls, fines, parking and speeding tickets, and other civil and criminal motor vehicle violations (and all fines, penalties, and interest applicable thereto) with respect to Vehicular Equipment. All capitalized or other terms used herein which are not defined herein shall have the meaning given to such terms in the Lease.

Dated: December 11, 2008.

Francis’ Drilling Fluids, Ltd. (Lessee)				Capital One, National Association (Lessor)
By:		/s/ Michael G. Francis		By:
Name:		Michael G. Francis		Name:
Title:		President		Title:

TAX INDEMNIFICATION RIDER

THIS RIDER is annexed to Lease Schedule No. 63 (the “Lease Schedule”) to the Equipment Leasing Agreement dated as of October 2, 2001 (the “Lease”), between Capital One, National Association (“Lessor”) and Francis’ Drilling Fluids, Ltd. (“Lessee”).

Lessor has executed the Lease Schedule on the basis of Lessor’s assumptions that, with respect to each Item of Equipment described in the Lease Schedule (an “Item of Schedule Equipment” or “Item”) Lessor will (i) be entitled to cost recovery deductions for Federal income tax purposes under the Accelerated Cost Recovery System provided for in Section 168 of the Internal Revenue Code of 1986, as in effect on the date of the Lease Schedule (the “Code”), and depreciation or cost recovery deductions for state income tax purposes for the State of Louisiana based upon one hundred percent (100%) of the Acquisition Cost of each Item of Schedule Equipment and on the basis that each such Item shall have the applicable recovery period and property classification, and that Lessor will be entitled to use the applicable method of depreciation and depreciation convention (the “Recovery Deduction”), and be entitled to deductions for Federal and Louisiana income tax purposes for interest payable with respect to any indebtedness incurred by Lessor in connection with any financing by Lessor of any portion of the Acquisition Cost of such Item (the “Interest Deduction”), and (ii) be subject to tax for each year, including any year in which a Tax Loss (hereinafter defined) occurs, be at a composite Federal and state corporate income tax rate that is equal to the highest marginal rate for corporations provided for under the Code and the laws of Louisiana (the “Highest Composite Marginal Tax Rate”). If, for any reason whatsoever, Lessor shall lose the benefit of, or shall not have or shall lose the right to claim, or shall suffer a disallowance or recapture of, or delay in claiming, all or any portion of the Recovery Deduction or (if Lessor finances any portion of its Acquisition Cost) the Interest Deduction, with respect to any Item of Schedule Equipment, or for Federal, foreign, state or local income tax purposes, any item of income, loss or deduction with respect to any Item of Schedule Equipment is treated as derived from, or allocable to, sources outside the United States (whether or not any foreign income taxes imposed as a result thereof may be credited against Federal, state or local income taxes of Lessor), or there shall be included in the gross income of Lessor for Federal, state or local income tax purposes any amount on account of any addition, modification or improvement to or in respect of any Item of Schedule Equipment made or paid for by Lessee (any such loss, failure to have or loss of the right to claim, disallowance, recapture, delay in claiming, treatment or inclusion being hereinafter called a “Tax Loss”), then, within thirty (30) days of Lessee’s receipt of written notice from Lessor that a Tax Loss has occurred, Lessee shall pay to Lessor such lump sum amount as shall (after deduction of all taxes required to be paid by Lessor in respect of the receipt or accrual of such payment under the laws of the United States, any state or any political subdivision thereof or any foreign taxing authority) be necessary to maintain Lessor’s after-tax yield and aggregate after-tax cash flows in respect of such Item at levels which are each not less than the levels of Lessor’s after-tax yield and aggregate after-tax cash flows that would have been applicable if such Tax Loss had not occurred, and Lessee shall also pay to Lessor an amount which, after the deduction of any additional taxes required to be paid by Lessor in respect of the receipt or accrual of such amount, shall be equal to the amount of any interest, penalty or additions to tax which may be imposed in connection with such Tax Loss. Lessor’s after-tax yield and aggregate after-tax cash flows shall be determined by taking into account (i) the assumptions used by Lessor in originally calculating rent and Casualty Loss Value percentages, including the assumptions set forth above (as such assumptions may have been revised pursuant to the next sentence hereof) and (ii) the Highest Composite Marginal Tax Rate actually in effect during each year from the date of such original calculations to the date of such Tax Loss, both dates inclusive. In the event Lessor shall suffer a Tax Loss with respect to which Lessee is required to pay an indemnity hereunder, and the full amount of such indemnity has been paid or provided for hereunder, the aforesaid assumptions, without further act of the parties hereto, shall thereupon be and be deemed to be amended, if and to the extent appropriate, to reflect such Tax Loss. In the event any indemnity payments shall be paid to Lessor under this Rider with respect to any Item(s) of Schedule Equipment, the Casualty Loss Values (and, if applicable, Termination Values) of such Item(s) shall be adjusted appropriately. The indemnification obligations of Lessee under this Rider shall survive the expiration or termination of the Lease and the lease term of each Item of Schedule Equipment. As used herein, the term “Lessor” will include any corporation consolidated with Lessor for tax purposes (and, if Lessor is a partnership, the partners thereof) and their respective successor(s) in interest and assigns. All capitalized terms used herein which are not defined herein shall have the meaning given to such terms in the Lease.

Dated: December 11, 2008.

Francis’ Drilling Fluids, Ltd. (Lessee)				Capital One, National Association (Lessor)
By:		/s/ Michael G. Francis		By:
Name:		Michael G. Francis		Name:
Title:		President		Title:

ELF#10
Tax Indem.Rider
Capital One ELF #10 (04/24/06)

TERMINAL RENTAL ADJUSTMENT RIDER

THIS RIDER, is annexed to, and made a part of Lease Schedule No. 63 (the “Schedule”) to the Equipment Leasing Agreement dated as of October 2, 2001 (the “Lease”), between Capital One, National Association (“Lessor”) and Francis’ Drilling Fluids, Ltd. (“Lessee”). All capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed to such terms in the Lease.

Lessee hereby acknowledges and agrees as follows:

     1. During the ninety (90) day period immediately prior to the last day of the lease term of each Item of Equipment then subject to this Lease, Lessee shall have the obligation to obtain bona fide bids for the purchase of such Item of Equipment from prospective purchasers who are financially capable of purchasing such Item of Equipment for cash on an “AS-IS WHERE-IS” basis, without recourse or warranty whatsoever, including any warranty against latent, hidden, and/or redhibitory defects. Lessor may also, but shall not be obligated to, obtain such bids during such period.

     All bids received by Lessor or Lessee prior to the end of the lease term of each such Item of Equipment shall be immediately certified to the other party in writing, setting forth the amount of such bid and the name and address of the person or entity submitting such bid. No later than the last day of the lease term of each such Item of Equipment, Lessee shall deliver such Item of Equipment to the bidder, if any, who shall have submitted such highest bid, and Lessor shall simultaneously therewith sell (or cause to be sold) for cash on an “AS-IS WHERE-IS” basis and without recourse or warranty whatsoever, including any warranty against latent, hidden, and/or redhibitory defects, such Item of Equipment to such bidder. The total selling price realized from the sale of any such Item of Equipment shall be retained by Lessor. If the Net Proceeds of Sale (hereinafter defined) of any such Item of Equipment are less than the Estimated Residual Value (hereinafter defined) of such Item. Lessee shall, on the last day of the lease term of such Item, pay to Lessor, in immediately available funds, an amount equal to such deficiency as an adjustment to the rent payable under this Lease for such Item. If the Net Proceeds of Sale of any such Item of Equipment are more than the Estimated Residual Value of such Item, Lessor shall, on the last day of the lease term of such Item, pay to Lessee an amount equal to such excess as an adjustment to the Rent payable under this Lease for such Item. As used herein, the term “Net Proceeds or Sale” means, with respect to each Item of Equipment sold by Lessor, the net amount of the proceeds of sale of such Item, after deducting from the gross proceeds of such sale (i) all sales taxes and other taxes (excluding income taxes on or measured by Lessor’s income) as may be applicable to the sale or transfer of such Item, (ii) all fees, costs and expenses of such sale incurred by Lessor, and (iii) any other amounts for which, if not paid, Lessor would be liable or which, if not paid, would constitute a lien on such Item. As used herein the term “Estimated Residual Value” means, with respect to each Item of Equipment, an amount equal to twenty five percent (25%) of the Acquisition Cost of such Item. Lessee shall pay to Lessor, or Lessor shall pay to Lessee, as the case may be, the amount by which the rent for each Item of Equipment is adjusted under this paragraph simultaneously with the sale thereof to the purchaser of such Item. Lessor’s obligation to sell (or cause to be sold) any Item of Equipment is contingent upon the receipt of the amount, if any, payable by Lessee with respect thereto pursuant to the sixth sentence of this paragraph. In the event no bids are received for an Item of Equipment during the ninety (90) day period referred to in the first sentence of this paragraph, Lessee and Lessor agree, in view of the uncertainties of market conditions and the parties’ inability to predict what the actual sale price of such Item of Equipment would be, that the actual fair market value of such Item of Equipment shall be deemed to equal zero for purposes solely of the rental adjustment set forth herein, and Lessee shall on the last day of the lease term of such Item pay to Lessor in cash an amount equal to the Estimated Residual Value of such Item as an adjustment to the rent payable under this Lease for such Item, and Lessee shall promptly return such Item of Equipment to Lessor upon the expiration of the lease term thereof in accordance with the provisions of Section 6 of this Lease; provided, however, that if and when Lessor sells such Item of Equipment, the Net Proceeds of sale of such Item of Equipment actually received by Lessor shall be deemed the actual fair market value of such Item of Equipment, and the aforesaid rental adjustment shall be recomputed with respect to such Item and made on such basis, without interest.

     2. Lessee hereby covenants to Lessor and agrees that it will characterize the relationship herein established as a lease and will treat it as such for all purposes and it shall not utilize or claim or attempt to utilize or claim any tax benefits with respect to the Equipment for any purposes whatsoever.

Dated: December 11, 2008

Francis’ Drilling Fluids, Ltd. (Lessee)				Capital One, National Association (Lessor)
By:		/s/ Michael G. Francis		By:
Name:		Michael G. Francis		Name:
Title:		President		Title:

TRACLse.Add
Capital One ELF #6A (04/24/06)

TRAC RIDER — BUSINESS USE

Certification by Lessee

This Certification is provided by the undersigned (“Lessee”) in connection with that certain Master Lease Agreement dated as of October 2, 2001, with Capital One National Association. The Parties intend and agree that the Lease constitutes a “qualified vehicle operating agreement” within the meaning of Section 7701(h) of the Internal Revenue Code of 1986, as now or hereafter amended, and this Certification is required to be provided pursuant to that Section.

Lessee hereby certifies, under penalty of perjury, that it intends that more than fifty (50%) percent of the use of the Equipment (as such term is defined in the Lease) is to be in a trade or business of the Lessee.

Lessee acknowledges that it has been advised that it will not be treated as the owner of the Equipment for Federal income tax purposes.

IN WITNESS WHEREOF, Lessee has caused this Certification to be dully executed, under seal, as of the 11^th of December, 2008.

Francis’ Drilling Fluids, Ltd. (Lessee)				Capital One, National Association (Lessor)
By:		/s/ Michael G. Francis		By:
Name:		Michael G. Francis		Name:
Title:		President		Title:

Capital One Confidential/Proprietary

LESSEE’S CERTIFICATION

     Francis Drilling Fluids, Ltd. (“Lessee”) does hereby certify under the penalties of perjury, that;

     1. Lessee intends to use the property (the “Equipment”) which is leased to Lessee under, and is subject to, the Equipment Leasing Agreement dated as of October 2, 2001, between Capital One, National Association, as Lessor, and Lessee, as Lessee (the “Lease”) primarily for a business, commercial, or agricultural purpose;

     2. Lessee has been advised that Lessee will not be treated as the owner of the Equipment leased to Lessee under the Lease for Federal income tax purposes; and

     3. This Certification is attached to, and incorporated in and made a part of, the Lease.

     IN WITNESS WHEREOF, Lessee has caused this Certification to be executed this 11^th day of December, 2008.

		Francis Drilling Fluids, Ltd. (Lessee)
		By:
		Name:
		Title:

(Corporate Seal)

ELF#5
Lsee Cert
Capital One ELF #5 (4/24/06)

CONTINUING GUARANTY

     This Continuing Guaranty (this “Agreement”), is dated December 11, 2008. The undersigned (hereinafter, whether one or more, individually referred to as “Guarantor”), guarantees the Indebtedness (hereinafter defined) of Francis, Drilling Fluids, LTD (hereinafter, whether one or more, individually and collectively referred to as “Lessee”) to Capital One, National Association. Post Office Box 61540, New Orleans, Louisiana 70161 (hereinafter “Lessor”).

     FOR VALUE RECEIVED, and in consideration of and for credit and financial accommodations extended, to be extended or continued, to or for the account of Lessee, the undersigned Guarantor, whether one or more, hereby jointly, severally and solidarity, agrees as follows:

1. Guarantor hereby irrevocably and unconditionally guarantees to Lessor the prompt, complete and punctual payment, full performance, observance and satisfaction of any and all loans, extensions of credit and/or other obligations and duties that Lessee may now and/or in the future owe to and/or incur in favor and for the benefit of Lessor, including but not limited to the punctual payment of all rents due and payable and the performance of any and all obligations and duties of Lessee under any and all Equipment Leasing Agreement(s) by and between Lessor, as Lessor, and Lessee, as Lessee (any and all such Equipment Leasing Agreement(s), together with any and all Riders, Schedules, Addenda, Purchase Orders. Individual Leasing Records and/or other documentation ancillary thereto are hereinafter collectively referred to as “Lease”) whether such indebtedness and/or obligations are direct or indirect, or by way of assignment, and whether such indebtedness and/or obligations are absolute or contingent, liquidated or unliquidated, due or to become due, secured or unsecured, and whether now or hereafter arising, of any nature or kind whatsoever (with all of Lessee’s indebtedness and/or obligations being hereinafter individually and collectively referred to under this Agreement as the “Indebtedness”). GUARANTOR FURTHER AGREES TO INDEMNIFY AND HOLD HARMLESS LESSOR FROM ANY AND ALL LOSSES, DAMAGES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, COSTS OF COURT AND ATTORNEYS’ FEES INCURRED BY LESSOR) IN THE EVENT OF ANY DEFAULT BY GUARANTOR OF HIS OBLIGATIONS UNDER THIS AGREEMENT.

     If Lessor agrees, and notwithstanding any other provision contained herein to the contrary, the maximum principal amount of Lessee’s Indebtedness in favor of Lessor guaranteed by Guarantor under this Agreement is limited to Four Hundred Forty Seven Thousand, Seven Hundred Seventeen Dollars and Twenty Cents ($447,717,20) DOLLARS Notwithstanding the limitation on principal set forth above, interest, costs and attorneys’ fees under Lessee’s Indebtedness are fully guaranteed hereunder.

2. Guarantor agrees that Guarantor’s obligations and liabilities for the prompt and punctual payment, performance and satisfaction of all of Lessee’s Indebtedness shall be on a “joint and several” and “solidary” basis along with Lessee to the same degree and extent as if Guarantor had been or will be a co-borrower, co-principal obligor and/or co-maker of all of Lessee’s Indebtedness In the event that there is more than one guarantor under this Agreement, or in the event that there are other guarantors, endorsers or sureties of all or any portion of Lessee’s Indebtedness, Guarantor’s obligations and liabilities hereunder shall be on a “joint and several” and “solidary” basis along with such other guarantor or guarantors, endorsers and/or sureties Guarantor further agrees that in any right of action which shall accrue to Lessor with respect to Lessee’s Indebtedness or under this Agreement. Lessor may at its option, proceed against Lessee alone (without having made any prior demand upon Guarantor or having commenced any action against Guarantor or having obtained or having attempted to satisfy any judgment against Guarantor) or may proceed against Guarantor and Lessee, jointly, severally and solidarily, or may proceed against Guarantor alone (without having made any prior demand upon Lessee or having commenced any action against Lessee or having obtained or having attempted to satisfy any judgment against Lessee). With the exception only of the defense of prior performance by Lessee (of Lessee’s Indebtedness which Guarantor is called upon to perform) or the defense that Lessor’s claim against Guarantor hereunder has prescribed or is barred by the applicable statute of limitations or is not within the scope of Lessee’s Indebtedness, all defenses of the law of guaranty, indemnification and surety, including, without limitation, substantive defenses and procedural defenses, are hereby waived and released by Guarantor. Except as provided in the preceding sentence, under no circumstances shall the liability of Guarantor under this Agreement be terminated either with respect to any period of time when the liability of Lessee under the Lease continues or with respect to any circumstances as to which the liability of Lessee has not been fully discharged by performance.

3. Guarantor’s obligations and liabilities under this Agreement shall remain in full force and effect until such time as all of Lessee’s Indebtedness has been paid, performed and/or satisfied in full, in principal, interest, costs and attorneys’ fees, or until such time as this Agreement may be cancelled or otherwise terminated by Lessor under a written cancellation instrument in favor of Guarantor Guarantor understands that fluctuations might occur in the aggregate amount of Lessee’s Indebtedness, and Guarantor agrees that reductions in the amount of Lessee’s Indebtedness, even to zero ($0.00) dollars, prior to Lessor’s written cancellation of this Agreement, will not constitute a termination of this Agreement Guarantor expressly agrees that the validity of this Agreement and Guarantor’s obligations hereunder shall in no way be terminated, affected, or impaired by reason of the assertion by Lessor against Lessee of any of the rights and remedies reserved to Lessor under the Lease or otherwise at law or in equity as a result of Lessee’s breach of any of its obligations under the Lease Guarantor further covenants and agrees that this Agreement and the full liability of Guarantor hereunder shall remain and continue in full force and effect notwithstanding the occurrence of any one or more of the following types of transactions (whether or not Guarantor shall have received any notice of or consented to any such transaction): (i) any modification or amendment of the Lease: (ii) any assignment or transfer of the Lease by Lessor; (iii) any assignment or transfer by Lessee as permitted under the Lease: (iv) any dissolution of Lessee; or (v) the tact that Lessee may be a party to any merger, consolidation or reorganization

4. In the event Lessee defaults under any of Lessee’s Indebtedness in favor of Lessor, Guarantor unconditionally and absolutely agrees to pay the full then unpaid amount of all of Lessee’s Indebtedness guaranteed hereunder, including

ELF#15
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principal, interest, costs and attorneys’ fees, and Guarantor hereby makes himself and agrees to be fully, primarily and personally liable to Lessor for any and all of Lessee’s Indebtedness Such payment or payments shall be made immediately following demand by Lessor at Lessor’s office indicated above. Guarantor hereby waives notice of acceptance of this Agreement and of any Indebtedness to which this Agreement applies or may apply Guarantor further waives presentment and demand for payment of Lessee’s Indebtedness, notice of dishonor and of nonpayment, notice of intention to accelerate, notice of acceleration, protest and notice of protest, collection or institution of any suit or other action by Lessor in collection thereof, including any notice of default in payment thereof or other notice to, or demand for payment thereof on any party. Guarantor additionally waives any and all rights and division and discussion as provided under Louisiana law, as well, as to the degree applicable, any similar rights as may be provided under the laws of any other state.

5. If Guarantor should for any reason (i) advance or lend monies to Lessee for any reason whatsoever, and/or (ii) make any payment for and on behalf of Lessee under any of Lessee’s Indebtedness, and/or (iii) make any payment to Lessor in total or partial satisfaction of Guarantor’s obligations and liabilities hereunder, Guarantor hereby agrees that any and all rights that Guarantor may have or acquire to collect or to be reimbursed by Lessee (or by any guarantor, endorser or surety of Lessee’s Indebtedness), shall in all respects be subordinate, inferior and junior to Lessor’s rights to collect and enforce payment, performance and satisfaction of Lessee’s then remaining Indebtedness, until such time as all of Lessee’s Indebtedness is fully paid and satisfied. Guarantor further agrees to refrain from attempting to collect and/or enforce any of Guarantor’s aforesaid rights against Lessee (or any other guarantor, surety or endorser of Lessee’s Indebtedness), arising by way of subrogation or otherwise, until such time as all of Lessee’s then remaining Indebtedness in favor of Lessor is fully paid and satisfied, including principal, interest, costs and attorneys’ fees Guarantor agrees that Guarantor shall have no right of subrogation, reimbursement or indemnity, whatsoever and no right of recourse to or with respect to any assets or property of Lessee or to any collateral securing the Indebtedness, even upon payment in full of the Indebtedness.

6. Guarantor further agrees that Lessor may, at its sole option, at any time, and from time to time, without the consent of or notice to Guarantor, or any one of them, or by any other party, and without impairing or releasing the obligations of Guarantor under this Agreement: (i) discharge or release any party (including, but not limited to, Lessee or any co-lessee or any guarantor under this Agreement) who is or may be liable to Lessor for any of Lessee’s Indebtedness; (ii) sell, exchange, release, surrender, realize upon or otherwise deal with, in any manner and in any order, any collateral directly of indirectly securing repayment of any of Lessee’s Indebtedness (iii) change the manner, place or terms of payment, or change or extend the time of payment of or renew, as often and for such periods as Lessor may determine, or alter, any of Lessee’s Indebtedness, (iv) settle or compromise any of Lessee’s Indebtedness; (v) subordinate and/or agree to subordinate the payment of all or any part of Lessee’s Indebtedness or Lessor’s security rights in and/or to any collateral directly or indirectly securing any such Indebtedness, to the payment and/or security rights of any other present and/or future creditors of Lessee; (vi) apply any sums paid to any of Lessee’s Indebtedness, with such payments being applied in such priority or with such preferences as Lessor may determine in its sole discretion, regardless of any amount of Indebtedness of Lessee remaining outstanding; (vii) take or accept any other security or guaranty for any or all of Lessee’s Indebtedness; and/or (viii) enter into, deliver, modify, amend or waive compliance with, any instrument or arrangement evidencing, securing or otherwise affecting, all or any part of Lessee’s Indebtedness, including but not limited to any Lease.

     In addition, no course of dealing between Lessor and Lessee (or any other guarantor, surety or endorser of Lessee’s Indebtedness), nor any failure or delay on the part of Lessor to exercise any of Lessor’s rights and remedies under any Lease, or any other agreement or agreements by and between Lessor and Lessee (or any other guarantor, surety or endorser) shall have the effect of impairing or releasing Guarantor’s obligations and liabilities to Lessor hereunder or of waiving any of Lessor’s rights and remedies under this Agreement or otherwise. The stated rights and remedies of Lessor under this Agreement against Guarantor with respect to the liability of Guarantor for Lessee’s Indebtedness shall be understood as not excluding any other legal or equitable rights and remedies of Lessor against Guarantor not expressly set forth herein, but shall be understood as being cumulative of all other legal and equitable rights and remedies of Lessor not expressly stated herein.

     This Agreement and Guarantor’s obligations and liabilities hereunder shall continue to be effective, and/or shall automatically and retroactively be reinstated if a release or discharge has occurred, as the case may be, if at any time any payment or apt hereof to Lessor with respect to any of Lessee’s Indebtedness is rescinded or must otherwise be restored by Lessor pursuant to any insolvency, bankruptcy, reorganization, receivership, or any other debt relief granted to Lessee or to any other party.

7. Guarantor agrees that, in Ihe event Lessor, in its sole discretion, deems it necessary to commence a collection action to enforce Guarantor’s obligations and liabilities under this Agreement, Lessor may commence such a civil action against Guarantor without the necessity of first (i) attempting to collect Lessee’s Indebtedness from Lessee or from any other guarantor, surety or endorser, (ii) attempting to exercise remedies against any collateral directly or indirectly securing repayment of any of Lessee’s Indebtedness, or (iii) including Lessee or any other guarantor, surety or endorser of any of Lessee’s Indebtedness as an additional party defendant in such a collection action against Guarantor. In the event Lessor, in its sole discretion, ever refers this Agreement to an attorney-at-law to enforce Guarantor’s obligations and liabilities hereunder, or to protect or preserve Lessor’s rights hereunder, Guarantor (and each or them, on a joint, several and solidary basis) agrees to reimburse Lessor for the reasonable fees of such an attorney. Guarantor additionally agrees that Lessor shall not be liable for failure to use diligence in the collection of any of Lessee’s Indebtedness or any collateral security therefor, or in creating or preserving the liability of any person liable on any such Indebtedness, or in creating, perfecting or preserving any security for any such Indebtedness.

8. Guarantor represents and warrants to Lessor that (i) Guarantor will receive a direct or indirect material benefit from the transactions contemplated herein and/or arising out of Lessee’s Indebtedness, and (ii) this Agreement, when executed and delivered by Guarantor, will constitute a valid, legal and binding obligation of Guarantor enforceable in accordance with its terms. All actions and consents required to be performed, obtained and/or satisfied prior to the execution and delivery of this Agreement, in order for this Agreement to be a valid and binding obligation of Guarantor in accordance with its terms, have been performed, obtained and satisfied in due and strict compliance with all applicable laws

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9. Upon the request of Lessor. Guarantor will at any time, and from time to time, duly execute and deliver to Lessor any and all such further instruments and documents, and supply such additional information, as may be necessary or advisable in the opinion of Lessor, to obtain the full benefits of this Agreement Guarantor, at his sole cost and expense, further agrees to provide Lessor with annual financial statements, tax returns and other financial statements and related information at such frequencies and in such detail as Lessor may reasonably request.

10. This Agreement is for the benefit of Lessor and for such other person or persons as may from time to time become or be the holders of any of Lessee’s Indebtedness and this Agreement shall be transferable. This Agreement and Guarantor’s obligations and liabilities under this Agreement shall be binding upon Guarantor’s successors, heirs, legatees, devisees, administrators, executors and assigns.

11. As collateral security for the repayment of Guarantor’s obligations and liabilities under this Agreement, Guarantor hereby grants Lessor a continuing security interest in any and all funds or other property that Guarantor may then have on deposit with or in the possession or control of Lessor and its successors or assigns (with the exception of funds deposited in IRA, pension or other tax-deferred deposit account).

12. Any notice required under this Agreement will be considered as given to Guarantor on the day Lessor hand delivers the notice to Guarantor, or deposits such notice in the United States mail, postage prepaid, to the address of Guarantor stated herein, or to such other address delivered in writing to Lessor by Guarantor Nothing in this paragraph shall be deemed to require any notice by Lessor to Guarantor.

13. No amendment, modification, consent or waiver of any provision of this Agreement, and no consent to any departure by Guarantor therefrom, shall be effective unless the same shall be in writing signed by a duly authorized officer of Lessor, and then shall be effective only to the specific instance and for the specific purpose for which given. Receipt by Lessor of any monetary sum or acceptance of any obligation of Lessee under the Lease with knowledge of the breach of any provision of the Lease shall not be deemed a waiver of such breach. Waiver by Lessor of any right of Lessor against Lessee under the Lease shall not constitute a wavier against Guarantor or in any other way inure to the benefit of Guarantor.

14. This Agreement shall be governed and construed in accordance with the laws of the State of Louisiana, and all matters relating to this Agreement and the covenants, duties and obligations of Guarantor under this Agreement shall be governed by the laws of the State of Louisiana.

15. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable.

16. GUARANTOR AND LESSOR HEREBY WAIVE THE RIGHT TO A JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTER CLAIM BROUGHT BY EITHER AGAINST THE OTHER AND AGREE THAT VENUE FOR ANY ACTION SHALL BE LIMITED TO THE CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS, STATE OF LOUISIANA. OR THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA. AT LESSOR’S OPTION.

17. Guarantor agrees that in the event Lessee shall become insolvent or shall be adjudicated bankrupt, or shall file a petition for reorganization, arrangement or other relief under any present or future provisions of the Federal Bankruptcy Code, as amended, or if such a petition is filed by creditors of Lessee, or if Lessee shall seek judicial readjustment of the rights of its creditors under any present or future federal or state law. or if a receiver for all or a part of Lessee’s property and assets is appointed by any state or federal court, no such proceeding or action taken therein shall modify, diminish, or in any way affect the liability of Guarantor under this Agreement, and no “rejection” and/or “termination” of the Lease in any of the proceedings referred to in this paragraph 17 shall be effective to release and/or terminate the continuing liability of Guarantor to Lessor under this Agreement with respect to Lessee’s Indebtedness unaffected by any such “rejection” and/or “termination” in such proceedings.

18. All past due amounts owing by Guarantor to Lessor hereunder shall bear interest, until paid, at the maximum rate of non-usurious interest allowed from time to time by law as is now, or to the extent allowed by law, as may hereafter be, in effect.

19. Guarantor recognizes that Lessor is relying upon this Agreement and the undertakings of Guarantor hereunder to enter into the Lease and carry out the transactions contemplated by the Lease, and further recognizes that the execution and delivery of this Agreement is a material inducement to Lessor to enter into the Lease and carry out the transactions contemplated by the Lease. Guarantor hereby acknowledges that there are no conditions to the full effectiveness of this Agreement.

     IN WITNESS WHEREOF, Guarantor has executed this Agreement in favor of Lessor on the day, month and year first written above.

		GUARANTOR
		X		/s/ Michael G. Francis
				Michael G. Francis
		SSN: xxx-xx-2806
		Address: 240 Jasmine Rd
		Crowley, LA 70527

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