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SECURITY AGREEMENT
 BETWEEN
 PRIME OFFSHORE L.L.C.
(DEBTOR)
 AND
 GUARANTY BANK, FSB, AS AGENT
(SECURED PARTY)
 JUNE 29, 2006




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TABLE OF CONTENTS
 PageARTICLE I
    DEFINITIONS AND INTERPRETATION
    
    
    11.1
    
    Terms Defined Above
    
    
    11.2
    
    Terms Defined in Credit Agreement
    
    
    11.3
    
    Additional Defined Terms
    
    
    11.4
    
    Undefined Financial Accounting Terms
    
    
    31.5
    
    References
    
    
    31.6
    
    Articles and Sections
    
    
    31.7
    
    Number and Gender
    
    
    4ARTICLE II
    GRANT OF SECURITY INTEREST
    
    
    4ARTICLE III
    REPRESENTATIONS AND WARRANTIES
    
    
    43.1
    
    Validity, Perfection and Priority
    
    
    43.2
    
    No Liens; Other Financing Statements
    
    
    53.3
    
    Location of Debtor and Collateral
    
    
    53.4
    
    Accounts
    
    
    53.5
    
    Tradenames; Prior Names
    
    
    5ARTICLE IV
    COVENANTS
    
    
    54.1
    
    Further Assurances
    
    
    54.2
    
    Change of Chief Executive Office
    
    
    64.3
    
    Change of Name or Limited Liability Company Structure
    
    
    64.4
    
    Maintain Records and Accounts
    
    
    74.5
    
    Right of Inspection
    
    
    74.6
    
    Possession of Collateral
    
    
    74.7
    
    Financing Statement Filings; Notifications
    
    
    7ARTICLE V
    ACCOUNTS
    
    
    75.1
    
    Debtor Remains Liable under Accounts
    
    
    75.2
    
    Collections on Accounts
    
    
    8ARTICLE VI
    POWER OF ATTORNEY
    
    
    86.1
    
    Appointment as Attorney-in-Fact
    
    
    86.2
    
    No Duty on the Part of Secured Party
    
    
    9ARTICLE VII
    REMEDIES; RIGHTS UPON DEFAULT
    
    
    107.1
    
    Rights and Remedies Generally
    
    
    107.2
    
    Proceeds
    
    
    107.3
    
    Collection of Accounts
    
    
    107.4
    
    Disposition of Collateral
    
    
    107.5
    
    Debtors Accounts
    
    
    117.6
    
    Possession of Collateral
    
    
    11
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Page7.7
    
    Disposition of the Collateral
    
    
    117.8
    
    Recourse
    
    
    127.9
    
    Expenses; Attorneys Fees
    
    
    127.10
    
    Application of Proceeds
    
    
    127.11
    
    Limitation on Duties Regarding Preservation of Collateral
    
    
    137.12
    
    Waiver of Claims
    
    
    137 .13
    
    Discontinuance of Proceedings
    
    
    14ARTICLE VIII
    INDEMNITY
    
    
    148.1
    
    INDEMNITY
    
    
    148.2
    
    Indemnity Obligations Secured by Collateral; Survival
    
    
    15ARTICLE IX
    MISCELLANEOUS
    
    
    159.1
    
    No Waiver; Remedies Cumulative
    
    
    159.2
    
    Termination; Release
    
    
    159.3
    
    Counterparts
    
    
    159.4
    
    Marshalling
    
    
    169.5
    
    Severability
    
    
    169.6
    
    Financing Statement Filing
    
    
    169.7
    
    Notices and Other Communications
    
    
    169.8
    
    Parties in Interest
    
    
    169.9
    
    Amendments
    
    
    169.10
    
    ENTIRE AGREEMENT
    
    
    169.11
    
    GOVERNING LAW
    
    
    179.12
    
    JURISDICTION AND VENUE
    
    
    17
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SECURITY AGREEMENT
 SECURITY AGREEMENT Agreement PRIME OFFSHORE L.L.C., Debtor GUARANTY BANK, FSB, Secured Party
 W
I T N E S S E
T H:
 Credit Agreement
   ARTICLE I
 DEFINITIONS AND INTERPRETATION
 Terms Defined Above Agreement Credit
Agreement Debtor Secured
Party
 Terms Defined in Credit Agreement
 Additional Defined Terms
 Accounts




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Account Debtor
 Account Records
 Chattel Paper
 Collateral
 Commodity Hedge Agreement
 General Intangibles
 - 2 -




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Indemnitees
 Proceeds
 Rate Management Transaction
 Secured Obligations
  Undefined Financial Accounting Terms
 References
 Articles and Sections
 - 3 -




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Number and Gender
 ARTICLE
II
 GRANT OF SECURITY INTEREST
 Collateral
 (a)
    
    all Accounts;(b)
    
    all Account Records;(c)
    
    all Chattel Paper;(d)
    
    all General Intangibles;(e)
    
    all Commodity Hedge Agreements;(f)
    
    all Rate Management Transactions; and(g)
    
    all accessions and additions to any or all of the foregoing, all
substitutions and replacements for any or all of the foregoing, and all Proceeds
and products of any or all of the foregoing.
 ARTICLE
III
 REPRESENTATIONS AND WARRANTIES
  Validity, Perfection and Priority
 - 4 -




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No Liens; Other Financing Statements
  Location of Debtor and Collateral
 Accounts
  Tradenames; Prior Names
 ARTICLE IVCOVENANTS
  Further Assurances
 - 5 -




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Change of Chief Executive Office
 Change of Name or Limited Liability Company Structure
 - 6 -




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Maintain Records and Accounts
 Right of Inspection
 Possession of Collateral
 Financing Statement Filings; Notifications
 ARTICLE VACCOUNTS
 Debtor Remains Liable under Accounts
 - 7 -




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Collections on Accounts
 ARTICLE VIPOWER OF ATTORNEY
 Appointment as Attorney-in-Fact
    - 8 -




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No Duty on the Part of Secured Party
 - 9 -




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ARTICLE VIIREMEDIES; RIGHTS UPON DEFAULT
 Rights and Remedies Generally
 Proceeds
 Collection of Accounts
    Disposition of Collateral
  - 10 -




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Debtors Accounts.
 Possession of Collateral.
 Disposition of the Collateral.
 - 11 -




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Recourse.
 Expenses; Attorneys Fees.
 Application of Proceeds.
  - 12 -




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Limitation on Duties Regarding Preservation of Collateral.
 Waiver of Claims.
     - 13 -




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Discontinuance of Proceedings.
 ARTICLE VIIIINDEMNITY
 INDEMNITY. (a) DEBTOR AGREES TO INDEMNIFY, REIMBURSE, AND HOLD THE INDEMNITEES
HARMLESS FROM ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, ACTIONS,
JUDGMENTS, SUITS, REASONABLE COSTS, REASONABLE EXPENSES, OR REASONABLE DISBURSEMENTS (INCLUDING
REASONABLE ATTORNEYS FEES AND EXPENSES) (FOR THE PURPOSES OF THIS SECTION ALL OF THE FOREGOING
ARE COLLECTIVELY CALLED EXPENSES) OF WHATSOEVER KIND OR NATURE WHICH MAY BE IMPOSED ON, ASSERTED
AGAINST, OR INCURRED BY ANY OF SUCH INDEMNITEES IN ANY WAY RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR IN ANY OTHER WAY CONNECTED WITH THE
ADMINISTRATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ENFORCEMENT OF ANY OF THE TERMS OF
OR THE PRESERVATION OF ANY RIGHTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, THOSE ARISING FROM THE
NEGLIGENCE, WHETHER SOLE OR CONCURRENT, OF ANY INDEMNITEE; PROVIDED THAT NO SUCH INDEMNITEE SHALL
BE INDEMNIFIED PURSUANT TO THIS SECTION FOR EXPENSES TO THE EXTENT ARISING FROM THE WILLFUL
MISCONDUCT AND/OR GROSS NEGLIGENCE OF SUCH INDEMNITEE.
  - 14 -




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Indemnity Obligations Secured by Collateral; Survival.
 ARTICLE IXMISCELLANEOUS
 No Waiver; Remedies Cumulative.
 Termination; Release.
 Counterparts.
 - 15 -




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Marshalling.
 Severability.
 Financing Statement Filing.
 Notices and Other Communications.
 Parties in Interest.
 Amendments.
 ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND SHALL SUPERSEDE ANY
PRIOR AGREEMENTS, WHETHER WRITTEN OR ORAL, BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT
HEREOF. FURTHERMORE, IN THIS REGARD, THIS AGREEMENT AND THE OTHER WRITTEN LOAN
DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE
PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG SUCH PARTIES.
 - 16 -




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GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAWS).
 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING
DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO OR FROM THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT TO WHICH ANY DEBTOR IS A PARTY MAY BE LITIGATED, AT THE SOLE DISCRETION AND ELECTION
OF THE SECURED PARTY, IN COURTS HAVING SITUS IN HOUSTON, HARRIS COUNTY, TEXAS. DEBTOR HEREBY
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED IN
HOUSTON, HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO TRANSFER OR CHANGE
THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST IT BY THE SECURED PARTY IN ACCORDANCE
WITH THIS SECTION.
 IN WITNESS WHEREOF,
 DEBTOR: 
PRIME OFFSHORE L.L.C.By:
    /s/     Jim R. BrockJim R. BrockPresident and Chief Financial Officer - 17 -




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SECURED PARTY:
GUARANTY BANK, FSB, AS AGENTBy:
    /s/      Kelly L. Elmore, IIIKelly L. Elmore, IIISenior Vice President - 18 -




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EXHIBIT A
   A-i