ECO-STIM ENERGY SOLUTIONS, INC. (NASDAQ:ESES) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

Convertible Note Facility Agreement

On March 3, 2017, Eco-Stim Energy Solutions, Inc. (the Company)
entered into an Amended and Restated Convertible Note Facility
Agreement (the Note Agreement) with FT SOF VII Holdings, LLC (Fir
Tree). The Note Agreement was executed in connection with Fir
Trees purchase from ACM Emerging Markets Master Fund I, L.P. and
ACM Multi-Strategy Delaware Holding LLC (collectively, ACM) of
the Companys outstanding 14% convertible notes due 2018 in the
aggregate principal amount of $22,000,000 issued to ACM in 2014
(the Existing ACM Note) and 2,030,436 shares of the Companys
outstanding common stock, par value $0.001 per share held by ACM.

The Note Agreement replaces the previously existing convertible
notes agreement by and among the Company and ACM. to the terms of
the Note Agreement, the Company issued to Fir Tree a secured
promissory note (the Amended and Restated Convertible Note) in a
principal amount of $22 million, which replaces the Existing ACM
Note, and a secured promissory note (the New Convertible Note,
and together with the Amended and Restated Convertible Note, the
Notes) in a principal amount of approximately $19.4 million,
representing an additional $17 million aggregate principal amount
of convertible notes purchased from the Company by Fir Tree on
March 6, 2017 and approximately $2.4 million principal amount of
convertible notes issued to Fir Tree in payment of accrued and
unpaid interest on the Existing ACM Note acquired by Fir Tree
from ACM. The New Convertible Note (and, in certain
circumstances, the Amended and Restated Convertible Note) will be
automatically converted into the common stock of the Company (the
Common Stock) at a price of $1.40 per share, contingent upon the
Company receiving approval of the conversion by shareholders
representing a majority of the outstanding Common Stock not held
by Fir Tree, and subject to certain other conditions set forth in
the Notes and the Note Agreement, including the absence of an
event of default under the Notes at the time shareholder approval
is received. The Company has agreed with Fir Tree to seek prompt
shareholder approval of the conversion of the Notes. The unpaid
principal amount of the Notes bears an interest rate of 20% per
annum and matures on May 28, 2018.

The proceeds of the Notes Agreement will be primarily used for
equipment purchases and other approved capital expenditures
incurred in accordance with an approved operating budget.

The Note Agreement also provides for certain representations,
warranties and affirmative covenants and negative covenants
customary for transactions of this type, including limitations on
the Companys ability to incur certain types of additional debt,
engage in transactions with affiliates, sell assets, and make
unapproved capital expenditures.

The Note Agreement further provides that all obligations
thereunder are and will be, subject to certain terms and
exceptions, jointly and severally guaranteed by certain of the
Companys subsidiaries. All obligations under the Note Agreement
are secured by liens on certain of the assets of the Company and
the subsidiary guarantors.

The Note Agreement further provides for customary Events of
Defaults (as such term is defined in the Note Agreement),
including but not limited to: failure to make payment when due,
default under other agreements, breach of warranty, failure to
comply with negative covenants, bankruptcy, dissolution,
impairments to Material Agreements (as such term is defined in
the Note Agreement), lack of enforceability of the Transaction
Documents (as such term is defined in the Note Agreement),
certain ERISA events or environmental claims or nationalization
resulting in a material taking of property. Upon the occurrence
of any Event of Default, Fir Tree may declare all outstanding
principal in respect of the Notes, accrued and unpaid interest
thereon, premiums and other amounts outstanding under the Note
Agreement to be due and payable.

The foregoing description is a summary of the Note Agreement,
does not purport to be complete and is qualified in its entirety
by reference to the full text of the Note Agreement, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference.

Stockholder Rights Agreement

On March 3, 2017 and as a condition precedent for the closing of
the Note Agreement, the Company entered into an Amended and
Restated Stockholder Rights Agreement (the AR Stockholder Rights
Agreement) with Fir Tree and the certain other stockholders party
thereto (the Specified Stockholders).

to the AR Stockholder Rights Agreement, Fir Tree currently has
the right to nominate at least three individuals for election to
the board of directors of the Company (the Board) for so long as
Fir Tree beneficially owns at least 5% of the issued and
outstanding Common Stock (calculated on a fully diluted basis).
On March 6, 2017, Messrs. David Proman, Andrew Teno and Andrew
Colvin were appointed to the Board to the foregoing contractual
requirements. The AR Stockholder Rights Agreement provides that
certain significant Board actions can be taken only with the
affirmative vote or consent of at least two directors appointed
by Fir Tree.

A director nominated by Fir Tree may only be removed, with or
without cause, upon Fir Trees written request. Fir Tree also has
the right to designate for nomination a substitute designee
should a vacancy on the Board is created due to the death,
disability, retirement, resignation or removal of any of its
previously appointed designees.

So long as Fir Tree beneficially owns at least 5% of the issued
and outstanding Common Stock (calculated on a fully diluted
basis), certain key actions of the Company, including but not
limited to, changes in numbers of directors, sale of all or
substantially all assets of the Company or issuance of a new
class of capital stock, will require approval by a majority of
the Board, including the affirmative vote of at least 2 directors
appointed by Fir Tree.

So long as Fir Tree beneficially owns at least 5% of the issued
and outstanding Common Stock (calculated on a fully diluted
basis), the Company will have an audit committee, a compensation
committee, and a nominating committee and will designate at least
one director nominated by Fir Tree to each such committee. Mr.
Teno was appointed by the Board as a member of the Companys
compensation committee, and Mr. Proman was appointed by the Board
as a member of the Companys nominating committee, to the
foregoing contractual requirements. Fir Tree intends to appoint
an individual who qualifies as an independent director under
Nasdaq and SEC rules to the Board and the audit committee no
later than 180 days following March 7, 2017.

So long as Fir Tree beneficially owns at least 10% of the issued
and outstanding Common Stock (calculated on a fully diluted
basis), Fir Tree will have a pre-emptive right to purchase an
amount Common Stock to be issued by the Company necessary to
ensure Fir Trees beneficial ownership does not decrease as a
result of such new issuance. Subject to the same conditions and
certain exceptions, Fir Tree and the Specified Stockholders will
have rights of first refusal and tag-along rights to any proposed
transfer of Common Stock.

The foregoing description is a summary of the AR Stockholder
Rights Agreement, does not purport to be complete and is
qualified in its entirety by reference to the full text of the AR
Stockholder Rights Agreement, which is filed as Exhibit 4.1 to
this Current Report on Form 8-K and incorporated herein by
reference.

Registration Rights Agreement

On March 7, 2017, the Company entered into a Registration Rights
Agreement (the Registration Rights Agreement) with Fir Tree, to
which the Company granted certain registration rights to Fir Tree
with respect to the shares of Common Stock held by Fir Tree (the
Registrable Securities), including those shares of Common Stock
issuable upon the conversion of the Convertible Note. Under the
Registration Rights Agreement, Fir Tree will have certain
customary registration rights, including demand rights and
piggyback rights, subject to certain underwriter cutbacks and
issuer blackout periods. The Company will pay all fees and
expenses relating to the registration and disposition of the
Registrable Securities in compliance with the Companys
obligations under the Registration Rights Agreement.

The foregoing description is a summary of the Registration Rights
Agreement, does not purport to be complete and is qualified in
its entirety by reference to the full text of the Registration
Rights Agreement, which is filed as Exhibit 4.2 to this Current
Report on Form 8-K and incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information set forth in Item 1.01 above is incorporated by
reference into this Item 2.03.

Item 3.01 Notice of Delisting or Failure to Satisfy a
Continued Listing Rule or Standard; Transfer of Listing.

The disclosure set forth below in Item 5.02 relating to Leonel
Nareas resignation from the Board and the resulting notification
provided to The NASDAQ Stock Market (NASDAQ) is incorporated
herein by reference.

On March 7, 2017, the Company notified NASDAQ that, due to Mr.
Nareas resignation from the Audit Committee, the Company would no
longer continue to satisfy the requirements of NASDAQ Listing
Rule 5605(c)(2)(A), which requires the audit committee of a
company with NASDAQ-listed securities to have a minimum of three
members, each of whom satisfies the independence requirements set
forth in NASDAQ Listing Rule 5605(a)(2). In the Companys notice
to NASDAQ, the Company also informed NASDAQ that it intends to
rely upon the cure period provided by NASDAQ Listing Rule
5605(c)(4)(B), which provides a cure period to regain compliance
with Listing Rule 5605(c)(2)(A). The Company expects that one of
the directors initially nominated by Fir Tree will resign, and
Fir Tree will nominate an independent director to join the Board
and audit committee to comply with Listing Rule 5605(c)(2)(A). On
March 8, 2017, the Company received a letter from NASDAQ
confirming its noncompliance with Listing Rule 5605(c)(2)(A)
because its audit committee is not currently composed of three
independent directors.

Item 3.02 Unregistered Sales of Equity
Securities.

The descriptions of the Note Agreement with respect to the
issuance of common shares issuable upon conversion of the
Convertible Note under Item 1.01 above are incorporated by
reference into this Item 3.02.

Item 3.03 Material Modification to Rights of Security
Holders.

The descriptions of the Registration Rights Agreement and AR
Stockholder Rights Agreement under Item 1.01 above are
incorporated by reference into this Item 3.03.

Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

Effective March 7, 2017 and to the AR Stockholder Rights
Agreement, the Board accepted the resignations of each of Carlos
Fernandez, Ahmad Al-Sati, Lap Wai Chan and Leonel Narea and
reduced the number of directors of the Board to seven. None of
the resignations was a result of any disagreement with the
Company on any matter relating to the Companys operations,
policies or practices.

In connection with the Boards acceptance of such resignations,
Messrs. David Proman, Andrew Teno and Andrew Colvin were
appointed to the Board upon their designation as directors by Fir
Tree to the terms of the AR Stockholder Rights Agreement. Mr.
Teno was appointed by the Board as a member of the Companys
compensation committee, and Mr. Proman was appointed by the Board
as a member of the Companys nominating committee.

Item 5.03 Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.

Effective March 7, 2017, the Board adopted the Second Amended and
Restated Bylaws, which became effective upon their adoption by
the Board. The Second Amended and Restated Bylaws addressed,
among other things, changes to the Board composition and approval
of certain key actions of the Company by directors appointed by
Fir Tree, as required by the AR Stockholder Rights Agreement.

The foregoing description is a summary of the Second Amended and
Restated Bylaws, does not purport to be complete and is qualified
in its entirety by reference to the full text of the Second
Amended and Restated Bylaws, which is filed as Exhibit 3.1 to
this Current Report on Form 8-K and incorporated herein by
reference.

Item 7.01 Regulation FD Disclosure.

On March 7, 2017, the Company issued a press release announcing
the entry into the Note Agreement. A copy of the press release is
being furnished as Exhibit 99.1 to this report.

The information furnished in this Item 7.01, including Exhibit
99.1 attached hereto, shall not be deemed filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, nor shall
such information be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, regardless
of any general incorporation language in such filing, except as
shall be expressly set forth by specific reference in such
filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

About ECO-STIM ENERGY SOLUTIONS, INC. (NASDAQ:ESES)

Eco-Stim Energy Solutions, Inc. is an oilfield services company. The Company provides well stimulation, coiled tubing and field management services to the upstream oil and gas industry. The Company focuses on the active shale and unconventional oil and natural gas basins outside the United States and it has commenced operations in Argentina. The Company operates well stimulation fleets, coiled tubing units and other downhole completion equipment, as well as provides sweet spot analysis in shale resource basins using geophysical predictive modeling combined with real-time feedback from down-hole diagnostic tools. The Company offers a pumping fleet, including well-stimulation pumps, nitrogen pumping units and cranes, in both trailer-mounted and skid-mounted configurations. It provides a range of pressure-pumping services, including work-over pumping, well injection and wireline pump downs.

ECO-STIM ENERGY SOLUTIONS, INC. (NASDAQ:ESES) Recent Trading Information

ECO-STIM ENERGY SOLUTIONS, INC. (NASDAQ:ESES) closed its last trading session down -0.05 at 1.01 with 571,166 shares trading hands.