Exhibit 10.2
[Execution Version]
SECURITY AGREEMENT
Dated as of September 28, 2010
among
BASIC ENERGY SERVICES, INC.
and the other Debtors parties hereto
in favor of
CAPITAL ONE, NATIONAL ASSOCIATION,
as Collateral Agent

 

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TABLE OF CONTENTS

              Page  
SECTION 1. DEFINITIONS
    1  
SECTION 2. GRANT OF SECURITY INTEREST
    3  
2.1 Grant of Security Interest
    3  
2.2 Avoidance Limitation
    4  
2.3 Debtors Remain Liable
    4  
SECTION 3. REPRESENTATIONS AND WARRANTIES
    4  
3.1 Title; No Other Liens
    4  
3.2 Perfected First Priority Liens
    5  
3.3 Debtor’s Legal Name; Jurisdiction of Organization; Chief Executive Office
    5  
3.4 Certain Collateral
    5  
3.5 Receivables
    5  
SECTION 4. COVENANTS AND AGREEMENTS
    6  
4.1 Covenants in Credit Agreement
    6  
4.2 Maintenance of Insurance
    6  
4.3 Maintenance of Perfected Security Interest; Further Documentation; Filing
Authorization; Further Assurances; Power of Attorney
    6  
4.4 Changes in Name, etc.
    7  
4.5 Delivery of Instruments and Chattel Paper
    8  
4.6 Deposit Accounts
    8  
4.7 Modifications of Receivables, Chattel Paper, Instruments and Payment
Intangibles
    8  
4.8 Actions With Respect to Certain Collateral
    8  
SECTION 5. LIMITATION ON PERFECTION OF SECURITY INTEREST
    9  
5.1 Chattel Paper and Instruments
    9  
SECTION 6. REMEDIAL PROVISIONS
    9  
6.1 General Interim Remedies
    9  
6.2 Receivables, Chattel Paper, Instruments and Payment Intangibles
    10  
6.3 Foreclosure
    10  
6.4 Application of Proceeds
    11  
6.5 Waiver of Certain Rights
    12  
6.6 Remedies Cumulative
    12  
6.7 Reinstatement
    12  

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TABLE OF CONTENTS
(CONTINUED)

              Page  
SECTION 7. MISCELLANEOUS
    12  
7.1 Amendments
    12  
7.2 Notices
    12  
7.3 No Waiver by Course of Conduct; Cumulative Remedies; No Duty
    12  
7.4 Enforcement Expenses; Indemnification
    13  
7.5 Successors and Assigns
    13  
7.6 Set-Off
    14  
7.7 Counterparts
    14  
7.8 Severability
    14  
7.9 Section Headings
    14  
7.10 Integration
    14  
7.11 GOVERNING LAW ETC
    14  
7.12 Additional Debtors
    16  
7.13 Termination; Releases
    16  

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TABLE OF CONTENTS
(CONTINUED)

         
SCHEDULES
       
 
       
Schedule 3.3
  —   Organization Information
Schedule 3.4
  —   Certain Collateral
Schedule 3.5
  —   Instruments
Schedule 4.6
  —   Deposit Accounts
 
       
ANNEXES
       
 
       
Annex I
  —   Security Agreement Supplement

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SECURITY AGREEMENT
     This SECURITY AGREEMENT dated as of September 28, 2010 (this “Agreement”),
is among BASIC ENERGY SERVICES, INC., a Delaware corporation (the “Borrower”),
the undersigned subsidiaries of the Borrower (the Borrower and such undersigned
subsidiaries collectively being the “Debtors”), and CAPITAL ONE, NATIONAL
ASSOCIATION, in its capacity as collateral agent (in such capacity, the
“Collateral Agent”) for the benefit of the holders of the Secured Obligations
(as defined below).
INTRODUCTION
     Reference is made to the Credit Agreement dated as of September 28, 2010
(as amended or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the Lenders from time to time parties thereto, and Capital
One, National Association, as Administrative Agent, Collateral Agent and Issuing
Bank. Pursuant to Article VII of the Credit Agreement (the “Guarantee”), the
Debtors (other than the Borrower) have agreed to guarantee, among other things,
the full payment and performance of all of the Borrower’s obligations under the
Credit Agreement. It is a condition precedent to the effectiveness of the Credit
Agreement and the making of credit extensions thereunder that the Debtors shall
have entered into this Agreement in order to secure the Borrower’s and Debtors’
obligations under the Credit Agreement (including the Guarantee) and all other
Secured Obligations (as defined below).
     The Debtors share an identity of interest as members of a combined group of
companies and will derive substantial direct and indirect economic and other
benefits from the extensions of credit under the Credit Agreement. Therefore, in
consideration of the credit expected to be received in connection with the
Credit Agreement, the Debtors jointly and severally agree with the Collateral
Agent as follows:
SECTION 1.
DEFINITIONS
     1.1 Terms defined above and elsewhere in this Agreement shall have their
specified meanings. Capitalized terms used herein but not defined herein shall
have the meanings specified by the Credit Agreement. All terms used herein and
defined in the UCC shall have the same definitions herein as specified therein.
     1.2 Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Debtor, shall refer to such Debtor’s
Collateral or the relevant part thereof.
     1.3 The following terms shall have the following meanings:
     “Chattel Paper” means all of each Debtor’s present and future chattel
paper, including electronic chattel paper.
     “Collateral” has the meaning specified in Section 2.1.

 

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     “Collateral Account” means any deposit account with the Collateral Agent
which is designated, maintained, and under the sole control of the Collateral
Agent and is pledged to the Collateral Agent which has been established pursuant
to the provisions of this Agreement for the purposes described in this Agreement
including collecting, holding, disbursing, or applying certain funds, all in
accordance with this Agreement.
     “Control Agreement” means any deposit account control agreement entered
into pursuant to Section 4.6 of this Agreement as of the date hereof with
respect to a Deposit Account.
     “Deposit Accounts” means the deposit accounts held in the names of Debtors
and listed on Schedule 4.6, and any other accounts into which Receivables are
paid.
     “Event of Default” means any “Event of Default” under the Credit Agreement.
     “Instruments” means all of each Debtor’s instruments, including all
promissory notes and other evidences of indebtedness, including intercompany
instruments, other than instruments that constitute, or are a part of a group of
writings that constitute, Chattel Paper.
     “Inventory” means all of each Debtor’s present and future inventory,
wherever located, including inventory, merchandise, goods and other personal
property that are held by or on behalf of any Debtor for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Debtor’s business or in the processing, production, packaging,
promotion, delivery or shipping of the same, including all supplies, and
embedded software. “Inventory” shall also include inventory in joint production
with another person, inventory in which any Debtor has an interest as consignor,
and inventory that is returned to or stopped in transit by any Debtor, and all
combinations and products thereof.
     “Permitted Prior Liens” means Liens permitted by Section 6.02(a) through
(b) and (e) through (j) of the Credit Agreement.
     “Proceeds” means all of each Debtor’s present and future (a) proceeds of
the Collateral, whether arising from the collection, sale, lease, exchange,
assignment, licensing, or other disposition of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any person acting under color of governmental authority), (c) claims against
third parties for impairment, loss, damage, or impairment of the value of any of
the Collateral, and (d) any and all proceeds of, and all claims for, any
insurance, indemnity, warranty or guaranty payable from time to time with
respect to any of the Collateral, including any credit insurance with respect to
Receivables, in each case whether represented as money, deposit accounts,
accounts, general intangibles, securities, instruments, documents, chattel
paper, or inventory.
     “Receivables” means all of each Debtor’s present and future accounts,
accounts from Governmental Authorities, and payment intangibles (a) arising from
the provision of services, sale of Inventory, or renting of equipment to the
customers of any Debtor or (b) arising otherwise and, in the case of this clause
(b), not consisting of accounts, chattel Paper, instruments, or

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payment intangibles that constitute proceeds, supporting obligations or products
of the collateral under the Senior Secured Notes Security Agreement as in effect
on the date hereof, together with, in the case of clauses (a) and (b), all of
the right, title and interest of any of the Debtors in and to (i) all supporting
obligations and security provided, pledged, assigned, hypothecated or granted to
or held by any of the Debtors to secure the foregoing, (ii) all of any of the
Debtors’ right, title and interest in and to any goods or services, the sale or
leasing of which gave rise thereto, (iii) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (iv) all powers of attorney
granted to any of the Debtors for the execution of any evidence of indebtedness
or security or other writing in connection therewith, (v) all credit
information, reports and memoranda relating thereto, and (vi) all Instruments
and Chattel Paper evidencing the foregoing.
     “Records” means all of each Debtor’s present and future books, accounting
records, files, computer files, computer programs, correspondence, credit files,
records, ledger cards, invoices, and other records, in each case, primarily
related to any other items of Collateral, including without limitation all
similar information stored on a magnetic medium or other similar storage device
and other papers and documents in the possession or under the control of any of
the Debtors or any computer bureau from time to time acting for any of the
Debtors.
     “Secured Obligations” means (a) all principal, interest, premium, fees,
reimbursements, indemnifications, and other amounts now or hereafter owed by the
Borrower under the Credit Agreement, this Agreement, and the other Loan
Documents; (b) all amounts now or hereafter owed by the other Debtors under the
Guarantee, this Agreement, and the other Loan Documents; (c) all Obligations now
or hereafter owed by any Debtor to any Lender or Affiliate of a Lender with
respect to any Hedging Agreement, (d) all Obligations now or hereafter owed by
any Debtor to any Lender or Affiliate of a Lender with respect to any treasury,
depository or cash management agreement, and (e) any increases, extensions,
renewals, replacements, and rearrangements of the foregoing obligations under
any amendments, supplements, and other modifications of the agreements creating
the foregoing obligations, in each case, whether direct or indirect, absolute or
contingent.
     “State of Organization” means the jurisdiction of organization of each of
the Debtors as listed on Schedule 3.3.
     “UCC” means the Uniform Commercial Code as in effect on the date hereof in
the State of Texas, as amended from time to time, and any successor statute.
SECTION 2.
GRANT OF SECURITY INTEREST
     2.1 Grant of Security Interest. Each Debtor hereby grants to the Collateral
Agent, for the benefit of the holders of the Secured Obligations, a security
interest in all of such Debtor’s right, title, and interest in and to the
following property (the “Collateral”) to secure the payment and performance of
the Secured Obligations: (a) all Inventory, all Receivables, all Records, and
all Deposit Accounts, (b) any and all additions, accessions and improvements to,
all substitutions

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and replacements for and all products of or derived from the foregoing, and
(c) all Proceeds of the foregoing.
To the extent that the Collateral is not subject to the UCC, each Debtor
collaterally assigns all of such Debtor’s right, title, and interest in and to
such Collateral to the Collateral Agent for the benefit of the holders of the
Secured Obligations to secure the payment and performance of the Secured
Obligations to the full extent that such a collateral assignment is possible
under the relevant law.
     2.2 Avoidance Limitation. Notwithstanding Section 2.1 above, the amount of
any Debtor’s Secured Obligations that are secured by its rights in Collateral
subject to a Lien in favor of the Collateral Agent hereunder or under any other
Security Document shall be limited to the extent, if any, required so that the
Liens it has granted under this Security Agreement shall not be subject to
avoidance under Section 548 of the Bankruptcy Code of the United States or to
being set aside or annulled under any applicable law relating to fraud on
creditors. In determining the limitations, if any, on the amount of any Debtor’s
Secured Obligations that are subject to the Lien on such Debtor’s Collateral
hereunder pursuant to the preceding sentence, it is the intention of the parties
hereto that any rights of subrogation or contribution which such Debtor may have
under the Guarantee, any other agreement or applicable law shall be taken into
account.
     2.3 Debtors Remain Liable. Anything herein to the contrary notwithstanding:
(a) each Debtor shall remain liable under the contracts included in the
Collateral to the extent set forth therein to perform such Debtor’s obligations
thereunder to the same extent as if this Agreement had not been executed;
(b) the exercise by the Collateral Agent of any rights hereunder shall not
release any Debtor from any obligations under the contracts included in the
Collateral; and (c) the Collateral Agent shall not have any obligation under the
contracts included in the Collateral by reason of this Agreement, nor shall the
Collateral Agent be obligated to perform or fulfill any of the obligations of
any Debtor thereunder, including any obligation to make any inquiry as to the
nature or sufficiency of any payment any Debtor may be entitled to receive
thereunder, to present or file any claim, or to take any action to collect or
enforce any claim for payment thereunder.
SECTION 3.
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to make credit extentions to the Borrower under the Credit
Agreement, each Debtor hereby represents and warrants to the Collateral Agent,
for the benefit of the holders of the Secured Obligations, that:
     3.1 Title; No Other Liens. Except for the security interests granted to the
Collateral Agent for the benefit of the holders of the Secured Obligations
pursuant to this Agreement and the other Permitted Liens, such Debtor owns each
item of the Collateral free and clear of any and all Liens or claims of others.
No financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such (a) as
have been filed in favor of the Collateral Agent, for the ratable benefit of the
holders of the Secured Obligations, pursuant to this Agreement or (b) as are
permitted by the Credit Agreement.

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     3.2 Perfected First Priority Liens. The security interests granted pursuant
to this Agreement (a) upon completion of the filing of financing statements
describing the Collateral in the offices located in the jurisdictions listed on
Schedule 3.3 and the taking of all applicable actions in respect of perfection
contemplated by Sections 4.5, 4.6 and 4.8 in respect of the applicable
Collateral, will constitute valid perfected security interests in all of the
Collateral in favor of the Collateral Agent, for the benefit of the holders of
the Secured Obligations, as collateral security for such Debtor’s Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Debtor and any persons purporting to purchase any Collateral from such Debtor
and (b) are prior to all other Liens on the Collateral except for Permitted
Prior Liens (and subject to the limitations on perfection and method of
perfection provided in Section 5).
     3.3 Debtor’s Legal Name; Jurisdiction of Organization; Chief Executive
Office. On the date of this Agreement, each Debtor’s exact legal name is set
forth on the signature page hereof, and from and after an amendment or
modification thereto, on a written notification delivered to the Collateral
Agent pursuant to Section 4.4. On the date hereof, such Debtor’s jurisdiction of
organization, type of organization, identification number from the jurisdiction
of organization (if any), and the location of such Debtor’s chief executive
office or sole place of business or principal residence, as the case may be, are
specified on Schedule 3.3.
     3.4 Certain Collateral. None of the Collateral constitutes, or is the
Proceeds of, farm products and none of the Collateral has been purchased for, or
will be used by any Debtor primarily for personal, family or household purposes.
Except as set forth on Schedule 3.4 or otherwise notified to the Collateral
Agent pursuant to Section 4.8, none of the account debtors or other persons
obligated on any of the Collateral of such Debtor is a Governmental Authority
subject to the Federal Assignment of Claims Act or like federal or state statute
or rule in respect of such Collateral of the type described in Section 4.8(a).
     3.5 Receivables.
          (a) No amount payable to such Debtor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Collateral Agent to the extent required by Section 5. Each of
the Instruments and Chattel Paper pledged by such Debtor hereunder constitutes
the legal, valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, and general
principles of equity. Schedule 3.5 lists all of the Instruments issued to or
held by each Debtor as of the Closing Date.
          (b) The amounts represented by such Debtor to the Secured Parties from
time to time as owing to such Debtor in respect of the Receivables will at such
times be accurate in all material respects.
          (c) All Receivables of such Debtor existing on the Closing Date arise
from bona fide sales or leases by such Debtor of goods and services.

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SECTION 4.
COVENANTS AND AGREEMENTS
Each Debtor covenants and agrees with the Collateral Agent and the holders of
the Secured Obligations that, from and after the date of this Agreement until
this Agreement terminates in accordance with Section 7.13(a):
     4.1 Covenants in Credit Agreement. Such Debtor shall take, or shall refrain
from taking, as the case may be, each action that is necessary to be taken or
not taken, as the case may be, so that no Default or Event of Default is caused
by the failure to take such action or to refrain from taking such action by such
Debtor or any of its Subsidiaries.
     4.2 Maintenance of Insurance. Such Debtor will comply with the provisions
of the Credit Agreement governing the maintenance of insurance for any of its
assets constituting Collateral.
     4.3 Maintenance of Perfected Security Interest; Further Documentation;
Filing Authorization; Further Assurances; Power of Attorney.
          (a) Such Debtor shall maintain the security interest created by this
Agreement as a perfected first priority security interest subject only to
Permitted Liens (and the limitations on perfection and method of perfection
provided in Section 5) and shall defend such security interest against the
claims and demands of all persons whomsoever.
          (b) Such Debtor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the assets and
property of such Debtor and such other reports in connection with the Collateral
as the Collateral Agent may reasonably request, all in reasonable detail.
          (c) Subject in each case to Section 5, each Debtor further agrees to
take any other action reasonably requested by the Collateral Agent to insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the security interest in any and all of the Collateral including,
without limitation, (i) executing, delivering and, where appropriate, filing
financing statements and amendments relating thereto under the UCC, to the
extent, if any, that any Debtor’s signature thereon is required therefor;
(ii) causing the Collateral Agent’s name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of the Collateral Agent to
enforce, the security interest in such Collateral; (iii) complying with any
provision of any statute, regulation or treaty of the United States or any other
country as to any Collateral if compliance with such provision is a condition to
the attachment, perfection or priority of, or the ability of the Collateral
Agent to enforce, the security interest in such Collateral; and (iv) taking all
actions required by the UCC or by other law, as applicable in any relevant
Uniform Commercial Code jurisdiction, or by other law as applicable in any
foreign jurisdiction.
          (d) Each Debtor hereby irrevocably authorizes the Collateral Agent at
any time and from time to time to file in any jurisdiction in which the Uniform
Commercial Code has been adopted any initial financing statements and amendments
thereto that (a) describe the

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Collateral and (b) contain any other information required by the UCC for the
sufficiency or filing office acceptance of any initial financing statement or
amendment. Each Debtor agrees to furnish any such information to the Collateral
Agent promptly upon request. Each Debtor also ratifies its authorization for the
Collateral Agent to have filed in any Uniform Commercial Code jurisdiction any
like initial financing statements or amendments thereto if filed prior to the
date hereof and in respect of this Agreement.
          (e) During the existence of an Event of Default,
          (i) At Collateral Agent’s request, each Debtor shall take any actions
reasonably requested by Collateral Agent with respect to such Event of Default,
including diligently endeavoring to cure any material defect existing or claimed
with respect to any Collateral, and taking all reasonably necessary and
desirable steps for the defense of any legal proceedings affecting any
Collateral, including the employment of counsel, the prosecution or defense of
litigation, and the release or discharge of all adverse claims;
          (ii) Collateral Agent, whether or not named as a party to any legal
proceedings, is authorized to take any additional steps as Collateral Agent
deems necessary or desirable for the defense of any such legal proceedings or
the protection of the validity or priority of this Agreement and the liens,
security interests, and assignments created hereunder, including the employment
of independent counsel, the prosecution or defense of litigation, the compromise
or discharge of any adverse claims made with respect to any Collateral and the
payment or removal of prior liens or security interests, and the reasonable
expenses of Collateral Agent in taking such action shall be paid by the Debtors;
and
          (iii) Each Debtor agrees that, if such Debtor fails to perform under
this Agreement or any other Loan Document, Collateral Agent may, but shall not
be obligated to, perform such Debtor’s obligations under this Agreement or such
other Loan Document, and any reasonable expenses incurred by Collateral Agent in
performing such Debtor’s obligations shall be paid by such Debtor. Any such
performance by Collateral Agent may be made by Collateral Agent in reasonable
reliance on any statement, invoice, or claim, without inquiry into the validity
or accuracy thereof. The amount and nature of any expense of Collateral Agent
hereunder shall be conclusively established by a certificate of any officer of
Collateral Agent absent manifest error.
          (f) Debtor irrevocably appoints Collateral Agent as Debtor’s attorney
in fact, with full authority to act during the existence of an Event of Default
for Debtor and in the name of Debtor, to take any action and execute any
agreement which Collateral Agent deems necessary or advisable to accomplish the
purposes of this Agreement, including the matters that Collateral Agent is
expressly authorized to take pursuant to this Agreement (including the matters
described in paragraph (c) above), and instituting proceedings Collateral Agent
deems necessary or desirable to enforce the rights of Collateral Agent with
respect to this Agreement.
     4.4 Changes in Name, etc. Such Debtor will not, except upon 10 days’ prior
written notice to the Collateral Agent (or such shorter period as may be agreed
to by the Collateral Agent in its sole discretion) and the taking of all actions
and the execution of all documents reasonably

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requested by the Collateral Agent to maintain the validity, perfection and
priority of the security interests provided for herein: (a) change its type of
organization, jurisdiction of organization or other legal structure from that
referred to in Section 3.3, (b) change its organizational number if it has one,
or (c) change its name.
     4.5 Delivery of Instruments and Chattel Paper. If any amount payable under
or in connection with any of the Collateral is or becomes evidenced by any
Instrument or Chattel Paper, such Instrument or Chattel Paper shall, to the
extent required by Section 5, be immediately delivered to the Collateral Agent,
duly indorsed in a manner reasonably satisfactory to the Collateral Agent, to be
held as Collateral pursuant to this Agreement.
     4.6 Deposit Accounts. Subject to the requirements of Section 5, for each
Deposit Account the Debtor maintaining such Deposit Account will, at the
Collateral Agent’s request and option, take any actions requested by the
Collateral Agent to enable the Collateral Agent to obtain “control” (within the
meaning of Section 9.104 of the UCC) with respect thereto, including the
execution of Control Agreements reasonably acceptable to the Collateral Agent.
The Collateral Agent agrees with each Debtor that the Collateral Agent will not
give any instructions to a depositary bank directing the disposition of funds
from time to time credited to any Deposit Account or withhold any withdrawal
rights from any Debtor, unless an Event of Default has occurred and is
continuing.
     4.7 Modifications of Receivables, Chattel Paper, Instruments and Payment
Intangibles. No Debtor will, without the Collateral Agent’s prior written
consent (which consent shall not be unreasonably withheld or delayed):
(a) compromise or grant any extension of the time of payment of any of the
Collateral consisting of Receivables, Chattel Paper, Instruments or payment
intangibles, (b) settle the same for less than the full amount thereof,
(c) release, wholly or partly, any obligor liable for the payment thereof or
(d) allow any credit or discount whatsoever thereon; provided, that so long as
no Event of Default has occurred and is continuing, this Section 4.7 shall not
restrict any extensions, credits, discounts, compromises or settlements granted
or made by any Debtor in the ordinary course of such Debtor’s business [and
consistent with such prudent practices used in industries that are the same as
or similar to those which such Debtor is engaged]. [NOTE: BES TO CONFIRM]
     4.8 Actions With Respect to Certain Collateral.
          (a) If any of the account debtors or other persons obligated on any of
the Receivables or Chattel Paper, Instruments or payment intangibles
constituting Collateral with a value in excess of $1,000,000 or on any contract
with a value in excess of $1,000,000 in any twelve month period, is or becomes a
governmental authority subject to the Federal Assignment of Claims Act or like
federal or state statute or rule in respect of such Collateral, Debtor shall
promptly (i) notify the Collateral Agent in a writing signed by such Debtor that
such account debtor or other person obligated on such Collateral or contract is
a Governmental Authority subject to the Federal Assignment of Claims Act or like
federal or state statute or rule and (ii) take all actions reasonably required
by the Collateral Agent to insure the attachment, perfection or priority of, or
the ability of the Collateral Agent to enforce, the security interest in such
Collateral.

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          (b) If any goods that constitute Collateral with a value in excess of
$1,000,000 are at any time in the possession of a bailee, the applicable Debtor
or Debtors shall promptly notify the Collateral Agent thereof and, if requested
by the Collateral Agent, shall promptly use all commercially reasonable efforts
to obtain a Landlord’s Agreement from such bailee, or a similar agreement in
form and substance reasonably satisfactory to the Collateral Agent.
SECTION 5.
LIMITATION ON PERFECTION OF SECURITY INTEREST
     5.1 Chattel Paper and Instruments. The perfection of the security interest
granted in Section 2 above in, respectively, Chattel Paper (whether tangible or
electronic) and Instruments will, prior to the occurrence of an Event of Default
(and after the occurrence of an Event of Default unless the Collateral Agent has
required that further actions are taken with respect to the perfection thereof),
be effected solely by filing an appropriate financing statement under the
applicable Uniform Commercial Code so long as (a) with respect to all Chattel
Paper and Instruments, the aggregate face amount of all such Chattel Paper and
Instruments does not exceed $2,500,000 and (b) with respect to any individual
Chattel Paper or Instrument, the face amount thereof does not exceed $1,000,000.
Notwithstanding the foregoing, if no Event of Default exists, then upon the
request of any Debtor the Collateral Agent shall deliver any Chattel Paper or
Instrument in its possession to that Debtor if that Debtor requires possession
in order to collect such Chattel Paper or Instrument.
SECTION 6.
REMEDIAL PROVISIONS
During the existence of an Event of Default, the Collateral Agent may, at the
Collateral Agent’s option, exercise one or more of the remedies specified
elsewhere in this Agreement or the following remedies:
     6.1 General Interim Remedies.
          (a) To the extent permitted by law, the Collateral Agent may exercise
all the rights and remedies of a secured party under the UCC.
          (b) The Collateral Agent may prosecute actions in equity or at law for
the specific performance of any covenant or agreement herein contained or in aid
of the execution of any power herein granted or for the enforcement of any other
appropriate legal or equitable remedy.
          (c) The Collateral Agent may require any Debtor to promptly assemble
any tangible Collateral of such Debtor and make it available to the Collateral
Agent at a place to be designated by the Collateral Agent. The Collateral Agent
may occupy any premises owned or leased by any Debtor where the Collateral is
assembled for a reasonable period in order to effectuate the Collateral Agent’s
rights and remedies hereunder or under law, without obligation to any Debtor
with respect to such occupation.

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     6.2 Receivables, Chattel Paper, Instruments and Payment Intangibles. During
the existence of an Event of Default, the Collateral Agent may establish
Collateral Accounts for the purpose of collecting the payments due to the
Debtors under any contracts or otherwise with respect to the Receivables and the
Chattel Paper, Instruments and/or payment intangibles constituting Collateral
and holding the proceeds thereof, and may, or may direct the Debtors to,
instruct all makers and/or all obligors with respect thereto to make all
payments with respect to such Collateral directly to the Collateral Agent for
deposit into such Collateral Account. After such direction to the Debtors, all
payments, whether of principal, interest, or other amounts, under any contracts
or otherwise with respect to the Receivables and the Chattel Paper, Instruments
and/or payment intangibles constituting Collateral shall be directed to such
Collateral Accounts until such direction is revoked in writing by the Collateral
Agent. All such payments which may from time to time come into the possession of
any Debtor shall be held in trust for the Collateral Agent, segregated from the
other funds of such Debtor, and delivered to the Collateral Agent immediately in
the form received with any necessary endorsement for deposit into such
Collateral Account, such delivery in no event to be later than one Business Day
after receipt thereof by the applicable Debtor. Each Debtor agrees to execute
any documents reasonably requested by the Collateral Agent to create any
Collateral Account and pledge it to the Collateral Agent. In connection with the
foregoing, the Collateral Agent shall have the right at any time during the
existence of an Event of Default to take any of the following actions, in the
Collateral Agent’s own name or in the name of the applicable Debtor: compromise
or extend the time for payment of any payments due with respect to any
Instrument or Chattel Paper upon such terms as the Collateral Agent may
reasonably determine; endorse the name of the applicable Debtor on checks,
instruments, or other evidences of payment with respect to any such Collateral;
make written or verbal requests for verification of amount owing on any such
Collateral from the maker thereof or obligor thereunder; open mail addressed to
such Debtor which the Collateral Agent reasonably believes relates to any such
Collateral, and, to the extent of checks or other payments with respect to any
such Collateral, dispose of same in accordance with this Agreement; take action
in the Collateral Agent’s name or the applicable Debtor’s name, to enforce
collection; and take all other action necessary to carry out this Agreement and
give effect to the Collateral Agent’s rights hereunder. Costs and expenses
incurred by the Collateral Agent in collection and enforcement of amounts owed
under any contracts or otherwise with respect to the Receivables and the Chattel
Paper, Instruments and/or payment intangibles constituting Collateral, including
attorneys’ fees and out-of-pocket expenses, shall be reimbursed by the
applicable Debtor to the Collateral Agent on demand. If at any time no Event of
Default exists, then upon request of the Borrower the Collateral Agent shall
promptly revoke any instructions to account debtors to make payment to the
Collateral Accounts.
     6.3 Foreclosure.
          (a) The Collateral Agent may foreclose on the Collateral in any manner
permitted by the courts of or in the State of Texas or the jurisdiction in which
any Collateral is located. If the Collateral Agent should institute a suit for
the collection of the Secured Obligations and for the foreclosure of this
Agreement, the Collateral Agent may at any time before the entry of a final
judgment dismiss the same, and take any other action permitted by this
Agreement.

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          (b) To the extent permitted by law, the Collateral Agent may exercise
all the foreclosure rights and remedies of a secured party under the UCC. In
connection therewith, the Collateral Agent may sell any Collateral at public or
private sale, at the office of the Collateral Agent or elsewhere, for cash or
credit and upon such other terms as the Collateral Agent deems commercially
reasonable. The Collateral Agent may sell any Collateral at one or more sales,
and the security interest granted hereunder shall remain in effect as to the
unsold portion of the Collateral. Each Debtor agrees that to the extent
permitted by law such sales may be made without notice. If notice is required by
law, each Debtor hereby deems ten days advance notice of the time and place of
any public or private sale reasonable notification, recognizing that if any
portion of the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, shorter notice
may be reasonable. The Collateral Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any sale by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was adjourned. In the event that any sale hereunder is not completed or
is defective in the opinion of the Collateral Agent, the Collateral Agent shall
have the right to cause subsequent sales to be made hereunder. Any statements of
fact or other recitals made in any bill of sale, assignment, or other document
representing any sale hereunder, including statements relating to the occurrence
of an Event of Default, acceleration of the Secured Obligations, notice of the
sale, the time, place, and terms of the sale, and other actions taken by the
Collateral Agent in relation to the sale may be conclusively relied upon by the
purchaser at any sale hereunder. The Collateral Agent may delegate to any agent
the performance of any acts in connection with any sale hereunder, including the
sending of notices and the conduct of the sale.
     6.4 Application of Proceeds.
          (a) Unless otherwise specified herein, any cash proceeds received by
the Collateral Agent from the sale of, collection of, or other realization upon
any part of the Collateral or any other amounts received by the Collateral Agent
hereunder may be, at the reasonable discretion of the Collateral Agent (i) held
by the Collateral Agent in one or more Collateral Accounts as cash collateral
for the Secured Obligations or (ii) applied to the Secured Obligations.
          (b) Amounts applied to the Secured Obligations shall be applied in the
following order:
     First, to the payment of the costs and expenses of exercising the
Collateral Agent’s rights hereunder, whether expressly provided for herein or
otherwise; and
     Second, to the payment of the Secured Obligations in the order set forth in
Section 8.02 of the Credit Agreement.
Any surplus cash collateral or cash proceeds held by the Collateral Agent after
payment in full of the Secured Obligations and the termination of any
commitments of the Collateral Agent to any Debtor shall be paid over to such
Debtor or to whomever may be lawfully entitled to receive such surplus.

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     6.5 Waiver of Certain Rights. To the full extent each Debtor may do so,
such Debtor shall not insist upon, plead, claim, or take advantage of any law
providing for any appraisement, valuation, stay, extension, or redemption, and
such Debtor hereby waives and releases the same, and all rights to a marshaling
of the assets of such Debtor, including the Collateral of such Debtor, or to a
sale in inverse order of alienation in the event of foreclosure of the liens and
security interests hereby created. Such Debtor shall not assert any right under
any law pertaining to the marshaling of assets, sale in inverse order of
alienation, the administration of estates of decedents or other matters whatever
to defeat, reduce, or affect the right of the Collateral Agent under the terms
of this Agreement.
     6.6 Remedies Cumulative. The Collateral Agent’s remedies under this
Agreement and the Loan Documents to which any Debtor is a party shall be
cumulative, and no delay in enforcing this Agreement and the Loan Documents to
which any Debtor is a party shall act as a waiver of the Collateral Agent’s
rights hereunder.
     6.7 Reinstatement. The obligations of each Debtor under this Agreement
shall continue to be effective or automatically be reinstated, as the case may
be, if at any time payment of any of the Secured Obligations is rescinded or
otherwise must be restored or returned by the Collateral Agent upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any Debtor
or any other obligor or otherwise, all as though such payment had not been made.
SECTION 7.
MISCELLANEOUS
     7.1 Amendments. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with
Section 11.02 of the Credit Agreement. No consent of any Lender or Affiliate of
a Lender party to a treasury, depository or cash management agreement or Hedging
Agreement secured hereby (except in such person’s capacity as a Lender, if
applicable) shall be required for any waiver, amendment, supplement or other
modification to this Agreement.
     7.2 Notices. All notices, requests and demands to or upon the Collateral
Agent or any Debtor hereunder shall be effected in the manner provided for in
Section 11.01 of the Credit Agreement. All notices, requests and demands
hereunder to any Debtor shall be given to it at its address or telecopy number
provided in Schedule 11.01 of the Credit Agreement.
     7.3 No Waiver by Course of Conduct; Cumulative Remedies; No Duty. No
failure to exercise, nor any delay in exercising, on the part of the Collateral
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Collateral Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Collateral Agent would otherwise have on any future
occasion. The rights and remedies provided herein and in the other Loan
Documents are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law. The powers conferred
on Collateral Agent under this Agreement are solely to protect Collateral
Agent’s

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rights under this Agreement and shall not impose any duty upon it to exercise
any such powers. Except as elsewhere provided hereunder, Collateral Agent shall
have no duty as to any of the Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
the Collateral.
     7.4 Enforcement Expenses; Indemnification.
          (a) Each Debtor agrees to pay, or reimburse the Collateral Agent and
each holder of the Secured Obligations for, all reasonable costs and expenses
incurred in connection with the enforcement, attempted enforcement, exercise, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents to which such Debtor is a party (including all such costs and expenses
incurred during any “workout” or restructuring in respect of the Obligations and
during any legal proceeding, including any proceeding under any state corporate
law, or any state, federal or foreign bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally), including all attorney
fees.
          (b) Each Debtor agrees to pay, and to indemnify and hold the
Collateral Agent and each holder of the Secured Obligations harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement.
          (c) Each Debtor agrees to pay, and to indemnify and hold the
Collateral Agent, each holder of the Secured Obligations, and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the “Indemnitees”) harmless from, any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including the reasonable
fees, charges and disbursements of any counsel for any Indemnitee) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with the execution, delivery, enforcement, performance or
administration of the Guarantee, this Agreement, or any Loan Document to which
such Debtor is a party, in all cases, whether or not caused by or arising, in
whole or in part, out of the negligence of the Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee.
          (d) All amounts due under this Section 7.4 shall be payable upon
demand therefor. The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
     7.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Debtor and shall inure to the benefit of the
Collateral Agent and the holders of the Secured Obligations and their successors
and assigns; provided that no Debtor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Collateral Agent.

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     7.6 Set-Off. Each Debtor hereby irrevocably authorizes the Collateral Agent
and each Lender at any time and from time to time upon the occurrence and during
the continuance of any Event of Default, without prior notice to such Debtor or
any other Loan Party, any such notice being waived by such Debtor to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Debtor against any and all Obligations owing to such
Lender under the Credit Agreement, the Guarantee, or under any other Loan
Document, now or hereafter existing, irrespective of whether or not the
Collateral Agent or such Lender shall have made demand for payment and although
such Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or indebtedness. The Collateral
Agent or any Lender exercising such set-off rights shall deliver to the Borrower
prompt written notice of any exercise of those rights; provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
     7.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
     7.8 Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
     7.9 Section Headings. The Section headings used in this Agreement are
included for convenience of reference only and shall not affect the
interpretation of this Agreement.
     7.10 Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter.
     7.11 GOVERNING LAW ETC.
          (a) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
          (b) SUBMISSION TO JURISDICTION. EACH DEBTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF TEXAS SITTING IN HARRIS COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO

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ANY LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH TEXAS STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
          (c) WAIVER OF VENUE. EACH DEBTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO
SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS
SECTION 7.11. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
          (d) SERVICE OF PROCESS. EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
7.2. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT
OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.
          (e) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

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     7.12 Additional Debtors. Each Subsidiary of the Borrower that is required
to become a party to this Agreement after the date hereof pursuant to
Sections 5.10 of the Credit Agreement shall become a Debtor for all purposes of
this Agreement upon execution and delivery by such Subsidiary of an instrument
in the form of Annex I hereto.
     7.13 Termination; Releases.
          (a) This Security Agreement and the security interest created hereby
shall terminate upon termination of the Commitments of all Lenders and payment
in full of all Obligations (other than (A) contingent indemnification
obligations and (B) obligations and liabilities under treasury, deposit, or cash
management agreements and Hedging Agreements as to which arrangements
satisfactory to the applicable Lender shall have been made) and the expiration
or termination of all Letters of Credit (other than Letters of Credit as to
which other arrangements satisfactory to the Collateral Agent and the Issuing
Bank shall have been made), at which time the Collateral Agent shall execute and
deliver to the Debtors or the Debtors’ designee, at the Debtors’ expense, all
Uniform Commercial Code termination statements and similar documents which the
Debtors shall reasonably request from time to time to evidence such termination.
Any execution and delivery of termination statements or documents pursuant to
this Section 7.13(a) shall be without recourse to or warranty by the Collateral
Agent.
          (b) Any Debtor other than the Borrower shall automatically be released
from its obligations hereunder and the security interest granted hereby in the
Collateral of such Debtor shall be automatically released in the event that all
the Equity Interests of such Debtor shall be sold, transferred or otherwise
disposed of to a person other than a Loan Party or a Subsidiary of a Loan Party
in a transaction permitted by the Credit Agreement; provided that, to the extent
required by the Credit Agreement, the Required Lenders or, if required by the
terms of the Credit Agreement, such other requisite number of Lenders, shall
have consented to such sale, transfer or other disposition and the terms of such
consent did not provide otherwise. If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Debtor in a transaction permitted by
the Credit Agreement the security interest created hereby in any Collateral that
is so sold, transferred or otherwise disposed of shall automatically terminate
and be released upon the closing of such sale, transfer or other disposition,
and such Collateral shall be sold free and clear of the Lien and security
interest created hereby; provided, however, that such security interest will
continue to attach to all proceeds of such sales or other dispositions. In
connection with any of the foregoing, the Collateral Agent shall execute and
deliver to the Debtors or the Debtors’ designee, at the Debtors’ expense, all
Uniform Commercial Code termination statements and similar documents that the
Debtors shall reasonably request from time to time to evidence such termination.
Any execution and delivery of termination statements or documents pursuant to
this Section 7.13(b) shall be without recourse to or warranty by the Collateral
Agent.
          (c) No consent of any Lender or Affiliate of a Lender party to a
treasury, depository or cash management agreement or Hedging Agreement secured
hereby (except in such person’s capacity as a Lender, if applicable) shall be
required for any release of Collateral or Debtors pursuant to this Section.
          (d) Each Debtor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement

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originally filed in connection herewith without the prior written consent of the
Collateral Agent subject to such Debtor’s rights under Section 9-509(d)(2) of
the UCC.
[Signature pages follow.]

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     EXECUTED as of the date first above written.

            CAPITAL ONE, NATIONAL
ASSOCIATION, as Collateral Agent
      By:   /s/ Don Backer         Don Backer        Senior Vice President     

Signature Page to Security Agreement

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            BASIC ENERGY SERVICES, INC.

BASIC ENERGY SERVICES GP, LLC,
as a Subsidiary Guarantor

ACID SERVICES, LLC, as a Subsidiary
Guarantor

BASIC MARINE SERVICES, INC., as a
Subsidiary Guarantor

CHAPARRAL SERVICE, INC., as a
Subsidiary Guarantor

JETSTAR ENERGY SERVICES, INC.,
as a Subsidiary Guarantor

JETSTAR HOLDINGS, INC., as a
Subsidiary Guarantor

JS ACQUISITION LLC, as a Subsidiary
Guarantor

PERMIAN PLAZA, LLC, as a Subsidiary
Guarantor

SLEDGE DRILLING CORP., as a Subsidiary
Guarantor

WILDHORSE SERVICES, INC., as a
Subsidiary Guarantor

XTERRA FISHING & RENTAL TOOLS
CO., as a Subsidiary Guarantor

      By:   /s/ Kenneth V. Huseman         Kenneth V. Huseman        President
and Chief Executive Officer        BASIC ENERGY SERVICES LP, LLC,
as a Subsidiary Guarantor
      By:   /s/ Jerry Tufly         Jerry Tufly        Sole Manager     

Signature Page to Security Agreement

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            BASIC ENERGY SERVICES, L.P., as a
Subsidiary Guarantor
      By:   BASIC ENERGY SERVICES GP,
LLC, its General Partner             By:   BASIC ENERGY SERVICES,
INC., its Sole Member             By:   /s/ Kenneth V. Huseman         Kenneth
V. Huseman        President       
BASIC ESA, INC., as a Subsidiary
Guarantor

FIRST ENERGY SERVICES
COMPANY, as a Subsidiary Guarantor

GLOBE WELL SERVICE, INC., as a
Subsidiary Guarantor

HENNESSEY RENTAL TOOLS, INC., as a
Subsidiary Guarantor

LEBUS OIL FIELD SERVICE CO., as a
Subsidiary Guarantor

OILWELL FRACTURING SERVICES, INC., as a
Subsidiary Guarantor

SCH DISPOSAL, L.L.C., as a Subsidiary
Guarantor

      By:   /s/ Kenneth V. Huseman         Kenneth V. Huseman        President 
      TAYLOR INDUSTRIES, LLC, as a
Subsidiary Guarantor
      By:   /s/ Kenneth V. Huseman         Kenneth V. Huseman        Chief
Executive Officer     

Signature Page to Security Agreement

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SCHEDULE 3.3
ORGANIZATION & LOCATION INFORMATION

                      Jurisdiction &                 Type of                
Organization;           Chief Executive Office,     UCC Filing   Organizational
  Sole Place of Business, or Debtor   Office   ID#   Principal Residence
Basic Energy Services, Inc.
  Delaware corporation     3611854     500 W Illinois, Midland, TX 79701
 
  Delaware Secretary of State            
 
               
Acid Services, LLC
  Kansas limited liability company     2347722     112 SW 7th St Ste 3c, Topeka,
KS 66603
 
               
 
  Kansas Secretary of State            
 
               
Basic Energy Services GP, LLC
  Delaware limited liability company     3611876     500 W Illinois, Midland, TX
79701
 
               
 
  Delaware Secretary of State            
 
               
Basic Energy Services LP, LLC
  Delaware limited liability company     3611879     500 W Illinois, Midland, TX
79701
 
               
 
  Delaware Secretary of State            
 
               
Basic Energy Services, L.P.
  Delaware limited partnership     2307778     500 W Illinois, Midland, TX 79701
 
               
 
  Delaware Secretary of State            

Schedule 3.3 to Security Agreement

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                      Jurisdiction &                 Type of                
Organization;           Chief Executive Office,     UCC Filing   Organizational
  Sole Place of Business, or Debtor   Office   ID#   Principal Residence
Basic ESA, Inc.
  Texas corporation     57139400     350 N St. Paul St, Ste 2900, Dallas, TX
75201
 
  Texas Secretary of State            
 
               
Basic Marine Services, Inc.
  Delaware corporation     3917169     500 W Illinois, Midland, TX 79701
 
  Delaware Secretary of State            
 
               
Chaparral Service, Inc.
  New Mexico corporation     642181     123 E Marcy St, Santa Fe, NM 87501
 
               
 
  New Mexico Secretary of State            
 
               
First Energy Services Company
  Delaware corporation     3215172     1209 Orange St., Wilmington, DE 19801
 
  Delaware Secretary of State            
 
               
Globe Well Service, Inc.
  Texas corporation     46471700     350 N St. Paul St, Ste 2900, Dallas, TX
75201
 
  Texas Secretary of State            
 
               
Hennessey Rental Tools, Inc.
  Oklahoma corporation     1900529237     1833 S Morgan Rd, Oklahoma City, OK
73128
 
               
 
  Oklahoma County Clerk, Oklahoma,
Central Filing            

Schedule 3.3 to Security Agreement

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                      Jurisdiction &                 Type of                
Organization;           Chief Executive Office,     UCC Filing   Organizational
  Sole Place of Business, or Debtor   Office   ID#   Principal Residence
JetStar Energy Services, Inc.
  Texas corporation     800481218     350 N St. Paul St, Ste 2900, Dallas, TX
75201
 
  Texas Secretary of State            
 
               
JetStar Holdings, Inc.
  Delaware corporation     3954247     1209 Orange St., Wilmington, DE 19801
 
               
 
  Delaware Secretary of State            
 
               
JS Acquisition LLC
  Delaware limited liability company     4278935     1209 Orange St.,
Wilmington, DE 19801
 
               
 
  Delaware Secretary of State            
 
               
LeBus Oil Field Service Co.
  Texas corporation     77931600     350 N St. Paul St, Ste 2900, Dallas, TX
75201
 
  Texas Secretary of State            
 
               
Oilwell Fracturing Services, Inc.
  Oklahoma corporation     1900377946     1833 S Morgan Rd, Oklahoma City, OK
73128
 
               
 
  Oklahoma County Clerk, Oklahoma,
Central Filing            
 
               
Permian Plaza, LLC
  Texas limited liability company     800859993     350 N St. Paul St, Ste 2900,
Dallas, TX 75201
 
  Texas Secretary of State            

Schedule 3.3 to Security Agreement

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                      Jurisdiction &                 Type of                
Organization;           Chief Executive Office,     UCC Filing   Organizational
  Sole Place of Business, or Debtor   Office   ID#   Principal Residence
SCH Disposal, L.L.C.
  Texas limited liability company     704317322     350 N St. Paul St, Ste 2900,
Dallas, TX 75201
 
               
 
  Texas Secretary of State            
 
               
Sledge Drilling Corp.
  Texas corporation     800575730     350 N St. Paul St, Ste 2900, Dallas, TX
75201
 
  Texas Secretary of State            
 
               
Taylor Industries, LLC
  Texas limited liability company     801259923     350 N St. Paul St, Ste 2900,
Dallas, TX 75201
 
               
 
  Texas Secretary of State            
 
               
Wildhorse Services, Inc.
  Oklahoma corporation     1900694769     1833 S Morgan Rd, Oklahoma City, OK
73128
 
               
 
  Oklahoma County Clerk, Oklahoma,
Central Filing            
 
               
XTERRA Fishing & Rental Tools Co.
  Texas corporation     158550700     350 N St. Paul St, Ste 2900, Dallas, TX
75201
 
  Texas Secretary of State            

Schedule 3.3 to Security Agreement

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SCHEDULE 3.4
CERTAIN COLLATERAL
None.
Schedule 3.4 to Security Agreement

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SCHEDULE 3.5
INSTRUMENTS
None.
Schedule 3.5 to Security Agreement

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SCHEDULE 4.6
DEPOSIT ACCOUNTS

                  Type of   Account     Depositor   Account   Number   Name &
Address of Bank
Basic Energy Services, Inc.
  Depository   4810624083   Bank of America, N.A.         700 Louisiana St. 7th
Fl         Houston, TX 77002
 
           
Basic Marine Services, Inc.
  Depository   488029554463   Bank of America, N.A.         700 Louisiana St.
7th Fl         Houston, TX 77002
 
           
Taylor Industries, LLC
  Depository   4810624119   Bank of America, N.A.         700 Louisiana St. 7th
Fl         Houston, TX 77002

Schedule 4.6 to Security Agreement

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     Annex I to the
     Security Agreement
     This SUPPLEMENT NO. [ ] dated as of [               ] (this “Supplement”),
is delivered in connection with (a) the Security Agreement dated as of
September 28, 2010 (as amended or otherwise modified from time to time, the
“Security Agreement”), among Basic Energy Services, Inc., a Delaware corporation
(the “Borrower”), certain subsidiaries of the Borrower (such subsidiaries
together with the Borrower, the “Debtors”) and Capital One, National Association
(“Capital One”), as Collateral Agent (in such capacity, the “Collateral Agent”)
for the benefit of the holders of the Secured Obligations (as defined therein)
and (b) Article VII of the Credit Agreement (as defined below) (the
“Guarantee”).
     A Reference is made to the Credit Agreement dated as of September 28, 2010
(as amended or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the lenders from time to time party thereto (the “Lenders”),
the Collateral Agent and others. Pursuant to the Guarantee, the Guarantors have
agreed to guarantee, among other things, the full payment and performance of all
of the Borrower’s obligations under the Credit Agreement.
     B. The Debtors have entered into the Security Agreement and the Guarantors
have entered into the Guarantee as a condition precedent to the effectiveness of
the Credit Agreement. Section 7.12 of the Security Agreement and Section 5.10 of
the Credit Agreement provide that additional Subsidiaries of the Borrower may
become Debtors under the Security Agreement and Guarantors under the Guarantee
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the “New Debtor”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Debtor
under the Security Agreement and a Guarantor under the Guarantee.
     C. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement, the
Guarantee, and the Credit Agreement.
     Accordingly, the Collateral Agent and the New Debtor agree as follows:
     SECTION 1. In accordance with Section 7.12 of the Security Agreement and
Section 5.10 of the Credit Agreement, the New Debtor by its signature below
becomes a Debtor under the Security Agreement with the same force and effect as
if originally named therein as a Debtor, and the New Debtor hereby (a) agrees to
all the terms and provisions of the Security Agreement applicable to it as a
Debtor thereunder and (b) represents and warrants that the representations and
warranties made by it as a Debtor thereunder are true and correct in all
material respects on and as of the date hereof. The Schedules to the Security
Agreement are hereby supplemented by the Schedules attached hereto with respect
to the New Debtor. In furtherance of the foregoing, the New Debtor, as security
for the payment and performance in full of the Secured Obligations (as defined
in the Security Agreement), does hereby create and grant to the Collateral
Agent, for the benefit of the holders of the Secured Obligations, a security
interest in and lien on all of the New Debtor’s right, title and interest in and
to the Collateral of the New Debtor. Each reference to a “Debtor” in the
Security Agreement shall be deemed to include the New Debtor.
Annex I to Security Agreement

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     SECTION 2. In accordance with Section 5.10 of the Credit Agreement, the New
Debtor by its signature below becomes a Guarantor under the Guarantee with the
same force and effect as if originally named therein as a Guarantor, and the New
Debtor hereby (a) agrees to all the terms and provisions of the Guarantee
applicable to it as a Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof. Each reference to a “Guarantor” in the
Guarantee shall be deemed to include the New Debtor.
     SECTION 3. The New Debtor represents and warrants to the Collateral Agent
that this Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
     SECTION 4. This Supplement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy),
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
     SECTION 5. Except as expressly supplemented hereby, the Security Agreement
and the Guarantee shall remain in full force and effect.
     SECTION 6. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
     SECTION 7. All communications and notices to the New Debtor under the
Security Agreement or the Guarantee shall be in writing and given as provided in
Section 7.2 of the Security Agreement to the address for the New Debtor set
forth under its signature below.
     SECTION 8. The New Debtor agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.
Annex I to Security Agreement

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     IN WITNESS WHEREOF, the New Debtor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.

            [Name of New Debtor],
      By:           Name:           Title:           Address:                  
            CAPITAL ONE, NATIONAL
ASSOCIATION, as Collateral Agent
      By:           Name:           Title:           Address:                  
         

Annex I to Security Agreement

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