other Loan Document to the
contrary notwithstanding.
ARTICLE IX
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
SECTION 9.01.
Collateral Account.
(A)
THE COLLATERAL AGENT IS HEREBY AUTHORIZED TO ESTABLISH AND
MAINTAIN AT ITS OFFICE AT 677 WASHINGTON BOULEVARD, STAMFORD, CONNECTICUT 06901,
IN THE NAME OF THE COLLATERAL AGENT AND PURSUANT TO A CONTROL AGREEMENT, A
RESTRICTED DEPOSIT ACCOUNT DESIGNATED "BASIC ENERGY SERVICES COLLATERAL
ACCOUNT".
EACH LOAN PARTY SHALL DEPOSIT INTO THE COLLATERAL ACCOUNT FROM TIME
TO TIME (I) THE CASH PROCEEDS OF ANY OF THE COLLATERAL (INCLUDING PURSUANT TO
ANY DISPOSITION THEREOF) TO THE EXTENT CONTEMPLATED HEREIN OR IN ANY OTHER LOAN
DOCUMENT, (II) THE CASH PROCEEDS OF ANY CASUALTY EVENT WITH RESPECT TO
COLLATERAL, TO THE EXTENT CONTEMPLATED HEREIN OR IN ANY OTHER LOAN DOCUMENT, AND
(III) ANY CASH SUCH LOAN PARTY IS REQUIRED TO PLEDGE AS ADDITIONAL COLLATERAL
SECURITY HEREUNDER PURSUANT TO THE LOAN DOCUMENTS.
(B)
THE BALANCE FROM TIME TO TIME IN THE COLLATERAL ACCOUNT SHALL
CONSTITUTE PART OF THE COLLATERAL AND SHALL NOT CONSTITUTE PAYMENT OF THE
OBLIGATIONS UNTIL APPLIED AS HEREINAFTER PROVIDED.
SO LONG AS NO EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING OR WILL RESULT THEREFROM, THE COLLATERAL
AGENT SHALL WITHIN TWO BUSINESS DAYS OF RECEIVING A REQUEST OF THE APPLICABLE
LOAN PARTY FOR RELEASE OF CASH PROCEEDS (I) FROM THE COLLATERAL ACCOUNT
CONSTITUTING NET CASH PROCEEDS RELATING TO ANY CASUALTY EVENT OR ASSET
88
SALE REMIT SUCH CASH PROCEEDS ON DEPOSIT IN THE COLLATERAL ACCOUNT TO OR UPON
THE ORDER OF SUCH LOAN PARTY, SO LONG AS SUCH LOAN PARTY HAS SATISFIED THE
CONDITIONS RELATING THERETO SET FORTH IN SECTION 9.02 AND (II)
WITH RESPECT TO
THE LC SUB ACCOUNT, REMIT SUCH NET CASH PROCEEDS ON DEPOSIT IN THE LC SUB
ACCOUNT TO OR UPON THE ORDER OF SUCH LOAN PARTY AT SUCH TIME AS ALL LETTERS OF
CREDIT SHALL HAVE BEEN TERMINATED AND ALL OF THE LIABILITIES IN RESPECT OF THE
LETTERS OF CREDIT HAVE BEEN PAID IN FULL.
AT ANY TIME FOLLOWING THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE COLLATERAL AGENT MAY
(AND, IF INSTRUCTED BY THE REQUIRED LENDERS AS SPECIFIED HEREIN, SHALL) IN ITS
(OR THEIR) DISCRETION APPLY OR CAUSE TO BE APPLIED (SUBJECT TO COLLECTION) THE
BALANCE FROM TIME TO TIME OUTSTANDING TO THE CREDIT OF THE COLLATERAL ACCOUNT TO
THE PAYMENT OF THE OBLIGATIONS IN THE MANNER SPECIFIED IN SECTION 9.03 HEREOF
SUBJECT, HOWEVER, IN THE CASE OF AMOUNTS DEPOSITED IN THE LC SUB ACCOUNT, TO THE
PROVISIONS OF SECTIONS 2.18(I) AND 9.03.
THE LOAN PARTIES SHALL HAVE NO RIGHT
TO WITHDRAW, TRANSFER OR OTHERWISE RECEIVE ANY FUNDS DEPOSITED IN THE COLLATERAL
ACCOUNT EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED HEREIN.
(C)
AMOUNTS ON DEPOSIT IN THE COLLATERAL ACCOUNT SHALL BE INVESTED
FROM TIME TO TIME IN CASH EQUIVALENTS AS THE APPLICABLE LOAN PARTY (OR, AFTER
THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE COLLATERAL
AGENT) SHALL DETERMINE, WHICH CASH EQUIVALENTS SHALL BE HELD IN THE NAME AND BE