Document:

exv10w23w4

 

EXHIBIT 10.23.4

AMENDED AND RESTATED

SECURITY AGREEMENT

BETWEEN

PRIMEENERGY CORPORATION

PRIMEENERGY MANAGEMENT CORPORATION

PRIME OPERATING COMPANY

EASTERN OIL WELL SERVICE COMPANY

SOUTHWEST OILFIELD CONSTRUCTION COMPANY

EOWS MIDLAND COMPANY

(DEBTOR)

AND

GUARANTY BANK, FSB, AS AGENT

(SECURED PARTY)

DECEMBER 28, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I
	 	DEFINITIONS AND INTERPRETATION 	 	 	1	 
	1.1
	 	Terms Defined Above 	 	 	1	 
	1.2
	 	Terms Defined in Credit Agreement 	 	 	1	 
	1.3
	 	Additional Defined Terms 	 	 	1	 
	1.4
	 	Undefined Financial Accounting Terms 	 	 	2	 
	1.5
	 	References 	 	 	2	 
	1.6
	 	Articles and Sections 	 	 	2	 
	1.7
	 	Number and Gender 	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	GRANT OF SECURITY INTEREST 	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	REPRESENTATIONS AND WARRANTIES 	 	 	3	 
	3.1
	 	Validity, Perfection and Priority 	 	 	3	 
	3.2
	 	No Liens; Other Financing Statements 	 	 	3	 
	3.3
	 	Location of Debtor 	 	 	3	 
	3.4
	 	Tradenames; Prior Names 	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	COVENANTS 	 	 	3	 
	4.1
	 	Further Assurances 	 	 	4	 
	4.2
	 	Change of Chief Executive Office 	 	 	4	 
	4.3
	 	Change of Name or Corporate Structure 	 	 	4	 
	4.4
	 	Title, Prohibited Liens and Filings 	 	 	4	 
	4.5
	 	Possession of Collateral 	 	 	5	 
	4.6
	 	Inspection of Collateral 	 	 	5	 
	4.7
	 	Financing Statement Filings; Notifications 	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 	POWER OF ATTORNEY 	 	 	5	 
	5.1
	 	Appointment as Attorney-in-Fact 	 	 	5	 
	5.2
	 	No Duty on the Part of Secured Party 	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 	REMEDIES; RIGHTS UPON DEFAULT 	 	 	7	 
	6.1
	 	Rights and Remedies Generally 	 	 	7	 
	6.2
	 	Proceeds 	 	 	7	 
	6.3
	 	Disposition of Collateral 	 	 	7	 
	6.4
	 	Possession of Collateral 	 	 	7	 
	6.5
	 	Disposition of the Collateral 	 	 	8	 
	6.6
	 	Recourse 	 	 	9	 
	6.7
	 	Expenses; Attorneys’ Fees 	 	 	9	 
	6.8
	 	Application of Proceeds 	 	 	9	 
	6.9
	 	Limitation on Duties Regarding Preservation of Collateral 	 	 	9	 
	6.10
	 	Waiver of Claims 	 	 	10	 
	6.11
	 	Discontinuance of Proceedings 	 	 	10	 

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	 	 	 	 	Page	 
	ARTICLE VII
	 	INDEMNITY 	 	 	10	 
	7.1
	 	INDEMNITY 	 	 	10	 
	7.2
	 	Indemnity Obligations Secured by Collateral; Survival 	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 	MISCELLANEOUS 	 	 	12	 
	8.1
	 	No Waiver; Remedies Cumulative 	 	 	12	 
	8.2
	 	Termination; Release 	 	 	12	 
	8.3
	 	Counterparts 	 	 	12	 
	8.4
	 	Marshalling 	 	 	12	 
	8.5
	 	Severability 	 	 	12	 
	8.6
	 	Financing Statement Filing 	 	 	12	 
	8.7
	 	Notices and Other Communications 	 	 	13	 
	8.8
	 	Parties in Interest 	 	 	13	 
	8.9
	 	Amendments 	 	 	13	 
	8.10
	 	ENTIRE AGREEMENT 	 	 	13	 
	8.11
	 	GOVERNING LAW 	 	 	13	 
	8.12
	 	JURISDICTION AND VENUE 	 	 	13	 

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AMENDED AND RESTATED

SECURITY AGREEMENT

     This
AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”), dated as of December
28, 2006, is by and between PRIMEENERGY CORPORATION, a
Delaware corporation (“PEC”), PRIMEENERGY
MANAGEMENT CORPORATION, a New York corporation, PRIME OPERATING COMPANY, a Texas corporation,
EASTERN OIL WELL SERVICE COMPANY, a West Virginia corporation, SOUTHWEST OILFIELD CONSTRUCTION
COMPANY, an Oklahoma corporation, and EOWS MIDLAND COMPANY, a Texas corporation (collectively, the
“Debtor”), and GUARANTY BANK, FSB, a federal savings bank, as Agent for the benefit of the
Lenders (“Secured Party”).

W I T N E S S E T H:

     WHEREAS, pursuant to the terms and conditions of the Amended and Restated Credit Agreement
dated December 28, 2006, by and among Debtor, et al., and the Secured Party and the Lenders
signatory thereto (as amended, restated, or supplemented from time to time, the “Credit
Agreement”), the Secured Party and the Lenders have agreed to extend credit to or for the
benefit of Debtor; and

     WHEREAS, the Debtor and the Secured Party entered into a Security Agreement dated as of
February 3, 2003, and the parties hereto desire to amend and restate such Security Agreement;

     WHEREAS, pursuant to the Credit Agreement and as an inducement to the Secured Party and the
Lenders to extend credit to or for the benefit of the Debtor pursuant to the Credit Agreement,
Debtor has agreed to execute this Agreement in favor of the Secured Party;

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

     1.1
Terms Defined Above. As used herein, each of the terms “Agreement,”
“Credit Agreement,” “Debtor,” and “Secured Party” shall have the meaning
assigned to such term hereinabove.

     1.2 Terms Defined in Credit Agreement. Each capitalized term used but not defined
herein shall have the meaning assigned to such term in the Credit Agreement.

     1.3 Additional Defined Terms. As used herein, each of the following terms shall have
the following meanings:

          “Collateral” shall have the meaning assigned to it in Article II.

 

 

     “Equipment” shall mean all of Debtor’s equipment, as defined in
Section 9.102(a)(33) of the UCC, in any form, whether now owned or hereinafter
acquired and wherever located including all parts thereof and all accessories or
additions thereto, whether now owned or hereafter acquired.

     “Indemnitees” shall mean the Secured Party and its shareholders,
officers, directors, employees, agents, attorneys-in-fact, and affiliates.

     “Proceeds” shall mean proceeds (as such term is defined in Section
9-306(a)of the UCC).

     “Secured Obligations” shall mean the Obligations.

     “UCC” shall mean the Uniform Commercial Code as in effect from time to
time in the State of Texas.

     1.4 Undefined Financial Accounting Terms. Undefined financial accounting terms used
in this Agreement shall have the meanings assigned to such terms according to GAAP.

     1.5 References. The words “hereby,” “herein,” “hereinabove,” “hereinafter,”
“hereinbelow,” “hereof,” “hereunder,” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular Article, Section, or provision of this
Agreement. References in this Agreement to Articles, Sections, or Exhibits are to such Articles,
Sections, or Exhibits of this Agreement unless otherwise specified.

     1.6 Articles and Sections. This Agreement, for convenience only, has been divided
into Articles and Sections; and it is understood that the rights and other legal relations of the
parties hereto shall be determined from this instrument as an entirety and without regard to the
aforesaid division into Articles and Sections and without regard to headings prefixed to such
Articles or Sections.

     1.7 Number and Gender. Whenever the context requires, reference herein made to the
single number shall be understood to include the plural; and likewise, the plural shall be
understood to include the singular. Words denoting sex shall be construed to include the
masculine, feminine and neuter, when such construction is appropriate; and specific enumeration
shall not exclude the general but shall be construed as cumulative. Definitions of terms defined
in the singular or plural shall be equally applicable to the plural or singular, as the case may
be, unless otherwise indicated.

ARTICLE II

GRANT OF SECURITY INTEREST

     As security for the prompt and complete payment and performance in full of all Secured
Obligations, Debtor hereby assigns and transfers for the purpose of security and pledges to the
Secured Party and grants to the Secured Party a security interest in and continuing lien on all
right, title, and interest of Debtor in, to, and under the following, in each case, whether now

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owned or existing or hereafter acquired or arising, and wherever located (all of which is herein
collectively called the “Collateral”):

	 	(a)	 	all Equipment; and
	 
	 	(b)	 	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

     Debtor hereby represents and warrants to the Secured Party, which representations and
warranties shall survive execution and delivery of this Agreement, as follows:

     3.1
Validity, Perfection and Priority. The security interests in the Collateral
granted to the Secured Party hereunder constitute valid and continuing security interests in the
Collateral. Upon the filing of financing statements, naming Debtor as “debtor” and the Secured
Party as “secured party” and describing the Collateral, in the filing offices set forth on Exhibit
A, the security interests granted to the Secured Party hereunder will constitute valid
first-priority perfected security interests in all Collateral with respect to which a security
interest can be perfected by the filing of a financing statement, subject only to Permitted Liens.

     3.2
No Liens; Other Financing Statements. (a) Except for the Lien granted to the
Secured Party hereunder and Permitted Liens, Debtor owns each item of the Collateral free and
clear of any and all Liens, rights, or claims of all other Persons, and Debtor shall defend the
Collateral against all claims and demands of all Persons at any time claiming the same or any
interest therein adverse to the Secured Party.

          (b) No financing statement or other evidence of Lien covering or purporting to cover any of
the Collateral is on file in any public office other than (i) financing statements in favor of the
Secured Party, (ii) financing statements for which proper termination statements have been
delivered to the Secured Party for filing, and (iii) financing statements filed in connection with
Permitted Liens.

     3.3 Location of Debtor. The chief executive office of Debtor is located at One
Landmark Square, Stamford, Connecticut 06901.

     3.4
Tradenames; Prior Names. Debtor has not conducted business under any name other
than its current name during the last five years.

ARTICLE IV

COVENANTS

     Debtor covenants and agrees with the Secured Party that from and after the date of this
Agreement:

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     4.1 Further Assurances. At any time and from time to time, upon the request of
the Secured Party, and at the sole expense of Debtor, Debtor will promptly and duly execute and
deliver any and all such further instruments, endorsements, powers of attorney, and other
documents, make such filings, give such notices, and take such further action as the Secured Party
may reasonably deem desirable in obtaining the full benefits of this Agreement and the rights,
remedies, and powers herein granted, including, without limitation, the following:

     (a) the filing of financing statements, in form acceptable to the Secured Party
under the Uniform Commercial Code in effect in any jurisdiction with respect to the
liens and security interests granted hereby;

     (b) the performance of all searches of public records deemed necessary by the
Secured Party to establish and determine the priority of the security interests of
the Secured Party or to determine the presence or priority of other secured parties;
and

     (c) the furnishing to the Secured Party from time to time of reports and
schedules in connection with the Collateral as required pursuant to the Credit
Agreement, all in reasonable detail and in form reasonably satisfactory to the
Secured Party.

     4.2 Change of Chief Executive Office. Debtor will not move its chief executive office
except to such new location as Debtor may establish in accordance with the last sentence of this
Section. Debtor shall not establish a new location for its chief executive office or such
activities (or move any such activities from the locations referred to in Section 3.3) until it
shall have given to the Secured Party not less than ten days’ prior written notice of its
intention to do so, clearly describing such new location and providing such other information in
connection therewith as the Secured Party may reasonably request.

     4.3 Change of Name or Corporate Structure. Debtor shall not change its name or
corporate structure or conduct business under any name other than its current name without giving
notice thereof to the Secured Party within ten days thereafter, clearly describing such new name,
or corporate structure or such new tradename and providing such other information in connection
therewith as the Secured Party may reasonably request. With respect to such new name, corporate
structure, or tradename, promptly upon the request of the Secured Party, Debtor shall take all
such action as the Secured Party may reasonably request to maintain the security interest of the
Secured Party in the Collateral granted hereby at all times fully perfected with the same or
better priority and in full force and effect.

     4.4
Title, Prohibited Liens and Filings. Debtor agrees to protect the title to the
Collateral. Debtor will not pledge, mortgage, otherwise encumber, create or suffer a Lien to exist
on any of the Collateral (other than in favor of the Secured Party) or sell, assign or otherwise
transfer any of the Collateral to or in favor of any Person other than the Secured Party without
the Secured Party’s written consent. Debtor will not file or permit to be filed or recorded any
financing statement or other security instrument with respect to the Collateral other than in
favor of Secured Party.

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     4.5 Possession of Collateral. The Collateral shall remain in Debtor’s possession
or control at all times at Debtor’s risk of loss.

     4.6 Inspection of Collateral. Secured Party may from time to time, open request,
inspect the Equipment.

     4.7
Financing Statement Filings; Notifications. Debtor recognizes that financing
statements pertaining to the Collateral have been or will be filed with the offices of the
Secretary of State for the States listed in Exhibit A hereto. Debtor will immediately notify the
Secured Party of any condition or event that may change the proper location for the filing of any
financing statement or other public notice or recording for the purpose of perfecting a security
interest in the Collateral. Without limiting the generality of the foregoing, Debtor will (a)
notify the Secured Party within a reasonable period of time in advance of any change to a
jurisdiction other than as represented in Section 3.3 hereof, and (b) immediately notify Secured
Party of any change in Debtor’s name. In any notice furnished pursuant to this Section, Debtor
will expressly state that the notice is required by this Agreement and contains facts that will or
may require additional filings of financing statements or other notices for the purpose of
continuing perfection of the Secured Party’s security interest in the Collateral.

ARTICLE V

POWER OF ATTORNEY

     5.1 Appointment as Attorney-in-Fact. Debtor hereby irrevocably constitutes and
appoints the Secured Party and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact, with full irrevocable power and authority in the place and
stead of Debtor and in the name of Debtor or in its own name, from time to time in the discretion
of the Secured Party, for the purpose of carrying out the terms of this Agreement, to take any and
all appropriate action and to execute any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of
the foregoing, Debtor hereby gives the Secured Party the power and right, on behalf of Debtor,
without notice to or assent by the Debtor, to do the following:

     (a) in the case of any Collateral, at any time when any Event of Default shall
have occurred and be continuing, in the name of Debtor or its own name, or
otherwise, to take possession of and indorse and collect any checks, drafts, notes,
acceptances, or other instruments for the payment of moneys due under, or with
respect to, any Collateral; in the name of Debtor or otherwise to direct any party
liable for any payment under any of the Collateral to make payment of any and all
moneys due or to become due thereunder directly to the Secured Party or as the
Secured Party shall direct; to ask or demand for, collect, receive payment of, and
receipt for, any and all moneys, claims, and other amounts due or to become due at
any time in respect of or arising out of any Collateral;

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     (b) at any time when an Event of Default shall have occurred and be continuing,
to prepare, sign, and file financing statements and amendments thereto in the name
of Debtor;

     (c) at any time when an Event of Default shall have occurred and be continuing,
to take or cause to be taken all actions necessary to perform or comply or cause
performance or compliance with the terms of this Agreement, including, without
limitation, actions to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, to effect any repairs or obtain any insurance
called for by the terms of this Agreement, and to pay all or any part of the
premiums therefor and the costs thereof;

     (d) upon the occurrence and during the continuance of any Event of Default, (i)
to sign and indorse any invoices, freight or express bills, bills of lading, storage
or warehouse receipts, drafts against debtor, assignments, verifications, notices,
and other documents in connection with any of the Collateral, (ii) to commence and
prosecute any suits, actions, or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral, (iii) to defend any suit,
action, or proceeding brought against Debtor with respect to any Collateral, (iv) to
settle, compromise, or adjust any suit, action, or proceeding described in the
preceding clause and, in connection therewith, to give such discharges or releases as
the Secured Party may deem appropriate, and (v) generally, to sell or transfer and
make any agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Secured Party were the absolute owner thereof for
all purposes, and to do, at the option of the Secured Party and the expense of
Debtor, at any time, or from time to time, all acts and things which the Secured
Party deems necessary to protect, preserve, or realize upon the Collateral and the
Liens of the Secured Party thereon and to effect the intent of this Agreement, all as
fully and effectively as Debtor might do; and

     (e) at any time when an Event of Default shall have occurred and be continuing,
to execute, in connection with any foreclosure, any endorsements, assignments, or
other instruments of conveyance or transfer with respect to the Collateral.

     Debtor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue
hereof. This power of attorney is a power coupled with an interest and shall be irrevocable so long
as any Obligation remains outstanding or any Commitment exists. Debtor hereby acknowledges and
agrees that in acting pursuant to this power-of-attorney the Secured Party shall be acting in its
own interest and shall have no fiduciary duties to the Debtor, and Debtor hereby waives any claims
to the rights of a beneficiary of a fiduciary relationship hereunder.

     5.2 No Duty on the Part of Secured Party. The powers conferred on the Secured Party
hereunder are solely to protect the interests of the Secured Party in the Collateral and shall not
impose any duty upon the Secured Party to exercise any such powers. The Secured Party

- 6 -

 

shall be accountable only for amounts that it actually receives as a result of the exercise of such
powers, and, except for its own gross negligence, neither it nor any of its officers, directors,
employees, or agents shall be responsible to the Debtor for any act or failure to act hereunder.

ARTICLE VI

REMEDIES; RIGHTS UPON DEFAULT

     6.1 Rights and Remedies Generally. If an Event of Default shall occur and be
continuing, then and in every such case, the Secured Party shall have all the rights of a secured
party under the UCC, all rights now or hereafter existing under all other applicable laws, and,
subject to any mandatory requirements of applicable law then in effect, all rights set forth in
this Agreement and the other Loan Documents. No enumeration of rights in this Section or elsewhere
in this Agreement or in any other Loan Document or other agreement shall be deemed to in any way
limit the rights of the Secured Party as described in this Section.

     6.2 Proceeds. If an Event of Default shall occur and be continuing (a) all Proceeds
received by Debtor consisting of cash, checks, and other near-cash items shall be held by Debtor
in trust for the Secured Party, segregated from other funds of Debtor, and shall forthwith upon
receipt by Debtor, be turned over to the Secured Party, in the same form received by Debtor
(appropriately indorsed or assigned by the Debtor to the order of the Secured Party or in such
other manner as shall be satisfactory to the Secured Party), and (b) any and all such Proceeds
received by the Secured Party (whether from Debtor or otherwise), or any part thereof, shall be
applied by the Secured Party as provided in Section 6.8 hereof.

     6.3 Disposition of Collateral. If an Event of Default shall occur and be continuing:

     (a) the Secured Party may direct Debtor to sell, assign, or otherwise liquidate
or dispose of all or from time to time any portion of the Collateral, and Debtor
shall do so, and the Secured Party may take possession of the Proceeds of such
Collateral. The Secured Party may direct Debtor to direct that all Proceeds of such
Collateral be paid directly to the Secured Party or may permit the Proceeds of such
Collateral to be paid to Debtor and all such Proceeds consisting of cash, checks, or
near-cash items shall be held by Debtor in trust for the Secured Party, segregated
from other funds of Debtor in a separate deposit account containing only Proceeds
and shall forthwith upon receipt by Debtor, be turned over to the Secured Party, in
the same form received by Debtor (appropriately indorsed or assigned by Debtor to
the order of the Secured Party or in such other manner as shall be satisfactory to
the Secured Party); and

     (b) any and all such Proceeds received by the Secured Party (whether from
Debtor or otherwise), shall be applied by the Secured Party as provided in Section
7.10 hereof.

     6.4 Possession of Collateral. If an Event of Default shall occur and be continuing,
(a) the Secured Party may, personally or by agents or attorneys, immediately retake possession of
the Collateral or any part thereof, from Debtor or any other Person which then has possession of

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any part thereof with or without notice or judicial process, and for that purpose may enter upon
Debtor’s premises where any of the Collateral is located and remove the same and may make
reasonable use in connection with such removal of any and all services, supplies, aids, and other
facilities of Debtor, and (b) upon three days’ notice to Debtor, Debtor shall, at its own expense,
assemble the Collateral, and make it available to the Secured Party by delivery to the Secured
Party at any location designated by the Secured Party which is reasonably convenient to both
parties, whether at the premises of Debtor or the Secured Party or elsewhere. Debtor shall, at its
sole expense, store and keep any Collateral so assembled at such place or places pending further
action by the Secured Party and while the Collateral shall be so stored and kept, provide such
guards and maintenance services as shall be reasonably necessary to protect the same and to
preserve and maintain the Collateral in good condition. Debtor’s obligation to so assemble and
deliver the Collateral is of the essence of this Agreement and, accordingly, upon application to a
court of equity having jurisdiction, the Secured Party shall be entitled to a decree requiring
specific performance by the Debtor of such obligation.

     6.5 Disposition of the Collateral. If an Event of Default shall occur and be
continuing, the Secured Party may sell, assign, lease, give an option or options to purchase, or
otherwise dispose of the Collateral (or contract to do any of the foregoing) under one or more
contracts or as an entirety, and, to the extent permitted by applicable law, without the necessity
of gathering at the place of sale the property to be sold, at public or private sale or sales,
conducted by any officer, nominee or agent of, or auctioneer or attorney for the Secured Party at
any location of any third party conducting or otherwise involved in such sale or any office of the
Secured Party or elsewhere and in general in such manner, at such time or times and upon such
terms and conditions and at such price as may be commercially reasonable, for cash or on credit or
for future delivery without assumption of any credit risk. Any of the Collateral may be sold,
leased, assigned, or options or contracts entered to do so, or otherwise disposed of, in the
condition in which the same existed when taken by the Secured Party or after any overhaul or
repair which may be commercially reasonable. Any such disposition which shall be a private sale or
other private proceeding shall be made upon not less than ten days’ written notice to Debtor
specifying the time after which such disposition is to be made and the intended sale price or
other consideration therefor. Any such disposition which shall be a public sale shall be made upon
not less than ten days’ written notice to Debtor (which Debtor agrees to be commercially
reasonable) specifying the time and place of such sale and, in the absence of applicable
requirements of law to the contrary, shall be by public auction (which may, at the option or the
Secured Party, be subject to reserve), after publication of commercially reasonable notice of such
auction. To the extent permitted by applicable law, the Secured Party may bid for and become the
purchaser of the Collateral or any item thereof, offered for sale in accordance with this Section
without accountability to Debtor (except to the extent of surplus money received) as provided
below. In the payment of the purchase price of the Collateral, the purchaser shall be entitled to
have credit on account of the purchase price thereof of amounts owing to such purchaser on account
of any of the Secured Obligations and any such purchaser may deliver notes, claims for interest,
or claims for other payment with respect to such Secured Obligations in lieu of cash up to the
amount which would, upon distribution of the net proceeds of such sale, be payable thereon. Such
notes, if the amount payable hereunder shall be less than the amount due thereon, shall be
returned to the holder thereof after being appropriately stamped to
show partial payment. Notwithstanding the foregoing, if the Collateral or any portion thereof is

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perishable or threatens to decline speedily in value or is of a type customarily sold in a
recognized market only such notice as shall be reasonably practicable shall be required.

     6.6 Recourse. Debtor shall remain liable for any deficiency if the proceeds of any
sale or other disposition of the Collateral are insufficient to satisfy the Secured Obligations.
Debtor shall also be liable for all reasonable expenses of the Secured Party incurred in
connection with collecting such deficiency, including, without limitation, the reasonable fees and
disbursements of any attorneys employed by the Secured Party to collect such deficiency.

     6.7
Expenses; Attorneys’ Fees. Debtor shall reimburse the Secured Party for all its
reasonable expenses in connection with the exercise of its rights and remedies hereunder,
including, without limitation, reasonable attorneys’ fees and legal expenses incurred by the
Secured Party.

     6.8 Application of Proceeds. The proceeds of any disposition of Collateral shall be
applied as follows:

	 	(a)	 	first, to payment or reimbursement of that portion of the Obligations
constituting fees, expenses and indemnities payable to the Agent in its
capacity as such;
	 
	 	(b)	 	second, pro rata to payment or reimbursement of that portion of the
Obligations constituting fees, expenses and indemnities payable to the
Lenders;
	 
	 	(c)	 	third, pro rata to payment of accrued interest on the Loans;
	 
	 	(d)	 	fourth, pro rata to payment of principal outstanding on the Loans and
Obligations owed to any Lender or affiliate of any Lender under any Commodity
Hedge Agreement or Rate Management Transaction;
	 
	 	(e)	 	fifth, pro rata to any other Obligations;
	 
	 	(f)	 	sixth, to serve as cash collateral to be held by the Agent to secure
the LC Exposure; and
	 
	 	(g)	 	seventh, any excess, after all of the Obligations shall have been
indefeasibly paid in full in cash, shall be paid to the Borrower or as
otherwise required by any Governmental Authority.

     6.9 Limitation on Duties Regarding Preservation of Collateral. The Secured Party’s
sole duty with respect to the custody, safekeeping, and physical preservation of the Collateral in
its possession, under Section 9.207 of the UCC or otherwise, shall be to deal with it in the same
manner as the Secured Party deals with similar property for its own account. The Secured Party
shall have no obligation to take any steps to preserve rights against prior parties to any
Collateral. Except for matters constituting gross negligence, neither the Secured Party nor any of
its directors, officers, employees, or agents shall be liable for failure to demand, collect, or
realize upon all or any part of the Collateral or for any delay in doing so or shall be under any

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obligation to sell or otherwise dispose of any Collateral upon the request of the Debtor or
otherwise.

     6.10 Waiver of Claims. Except as otherwise provided in this Agreement, Debtor hereby
waives, to the extent permitted by applicable law, notice of and judicial hearing in connection
with the Secured Party’s taking possession or the Secured Party’s disposition of any of the
Collateral in accordance herewith, including, without limitation, any and all prior notice and
hearing for any prejudgment remedy or remedies and any such right which the Debtor would otherwise
have under the constitution or any statute of the United States or any state, and Debtor hereby
further waives, to the extent permitted by law:

     (a) all damages occasioned by such taking of possession except any damages
which are the direct result of the gross negligence of the Secured Party;

     (b) all other requirements as to the time, place, and terms of sale or other
requirements with respect to the enforcement of the rights of the Secured Party
hereunder;

     (c) demand of performance or other demand, notice of intent to demand or
accelerate, notice of acceleration, presentment, protest, advertisement, or notice
of any kind to or upon Debtor or any other Person, except as may be required by the
Credit Agreement; and

     (d) all rights of redemption, appraisement, valuation, diligence, stay,
extension, or moratorium now or hereafter in force under any applicable law in
order to stay or delay the enforcement of this Agreement, including the absolute
sale of the Collateral or any portion thereof, and Debtor, for itself and all who
may claim under it, insofar as it or they now or hereafter lawfully may, hereby
waives the benefit of all such laws.

     6.11 Discontinuance of Proceedings. In case the Secured Party shall have instituted
any proceeding to enforce any right, power, or remedy under this Agreement by foreclosure, sale,
entry, or otherwise, and such proceeding shall have been discontinued or abandoned for any reason,
then and in every such case, Debtor and the Secured Party shall be returned to their former
positions and rights hereunder with respect to the Collateral subject to the security interest
created under this Agreement, and all rights, remedies, and powers of the Secured Party shall
continue as if no such proceeding had been instituted.

ARTICLE VII

INDEMNITY

     7.1
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, COSTS, EXPENSES, OR DISBURSEMENTS (INCLUDING REASONABLE ATTORNEYS’ FEES AND
EXPENSES) (FOR THE PURPOSES OF

- 10 -

 

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 GROSS NEGLIGENCE OF SUCH INDEMNITEE.

          (b) Debtor agrees that upon written notice by any such Indemnitee of any assertion that could
give rise to an Expense, Debtor shall assume full responsibility for the defense thereof. Without
limiting the application of part (a) of this Section, Debtor agrees to pay or reimburse such
Indemnitee on demand for any and all reasonable fees, costs, and expenses of whatever kind or
nature incurred in connection with the creation, preservation, or protection of the Secured Party’s
Liens on, and security interests in, the Collateral, including, without limitation, all reasonable
fees and taxes in connection with the recording or filing of instruments and documents in public
offices, payment, or discharge of any taxes or Liens or security interests upon or in respect of
the Collateral, premiums for insurance with respect to the Collateral, all reasonable expenses
incurred in the custody, preservation, use, or operation of the Collateral when Collateral is in
the Secured Party’s possession, and all other reasonable fees, costs, and expenses in connection
with protecting, maintaining, or preserving the Collateral and the Secured Party’s interest
therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any
actions, suits, or proceedings arising out of or relating to the Collateral.

          (c) Without limiting the application of parts (a) or (b) of this Section, Debtor agrees to
pay, indemnify, and hold each Indemnitee harmless from and against any Expenses which such
Indemnitee may suffer, expend, or incur in consequence of or growing out of any misrepresentation
by any Debtor in this Agreement or in any statement or writing contemplated by or made or
delivered pursuant to or in connection with this Agreement.

          (d) If and to the extent that the obligations of Debtor under this Section are unenforceable
for any reason, Debtor hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law.

     7.2
Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Collateral. The indemnity obligations of the Debtor contained in this
Article VIII shall continue in full force and effect notwithstanding the full payment and
performance of the Secured Obligations and the termination of this Agreement.

- 11 -

 

ARTICLE VIII

MISCELLANEOUS

     8.1
No Waiver; Remedies Cumulative. No failure or delay on the part of the Secured
Party in exercising any right, power, or privilege hereunder and no course of dealing between any
Debtor and the Secured Party shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege. A waiver by the Secured Party of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy
which the Secured Party would otherwise have on any future occasion. The rights and remedies herein
expressly provided are cumulative, may be exercised singly or concurrently and as often and in such
order as the Secured Party deems expedient, and are not exclusive of any rights or remedies which
the Secured Party would otherwise have whether by agreement or now or hereafter existing under
applicable law. No notice to or demand on Debtor in any case shall entitle Debtor to any other or
further notice or demand in similar or other circumstances or constitute a waiver of the rights of
the Secured Party to any other or further action in any circumstances without notice or demand.

     8.2
Termination; Release. When the Secured Obligations have been indefeasibly paid
and performed in full and the Commitment has terminated, this Agreement shall terminate, and the
Secured Party, at the request and sole expense of Debtor, will execute and deliver to Debtor the
proper instruments (including Uniform Commercial Code termination statements) acknowledging the
termination of this Agreement, and will duly assign, transfer, and deliver to Debtor, without
recourse, representation, or warranty of any kind whatsoever, such of the Collateral as may be in
possession of the Secured Party and has not theretofore been disposed of, applied, or released.

     8.3 Counterparts. This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one and the same
instrument.

     8.4 Marshalling. The Secured Party shall not be under any obligation to marshall any
assets in favor of Debtor or any other Person or against or in payment of any or all of the
Secured Obligations.

     8.5 Severability. In case any provision in or obligation under this Agreement or the
Secured Obligations shall be invalid, illegal, or unenforceable in any jurisdiction, the validity,
legality, and enforceability of the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

     8.6 Financing Statement Filing. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement and may be filed in lieu of the original to the
extent permitted by applicable law.

- 12 -

 

     8.7 Notices and Other Communications. Except as to oral notices expressly
authorized herein, all notices, requests, and communications under this Agreement shall be in
writing (including by telecopy). Unless otherwise expressly provided herein, any such notice,
request, or communication shall be deemed to have been duly given or made when provided in
accordance with the terms of the Credit Agreement.

     8.8 Parties in Interest. This Agreement shall be binding upon and inure to the benefit
of Debtor, the Secured Party, and their respective legal representatives, successors, and assigns.
No other Person shall have any right, benefit, priority, or interest hereunder or as a result
hereof or have standing to require satisfaction of provisions hereof in accordance with their
terms, and any or all of such provisions may be freely waived in whole or in part by the Secured
Party at any time if the Secured Party in its sole discretion deems it advisable to do so.

     8.9 Amendments. Neither this Agreement nor any provision hereof may be amended,
supplemented, modified, discharged, or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the amendment, supplement, modification,
discharge, or termination is sought.

     8.10 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.

     8.11 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).

     8.12 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.

- 13 -

 

     IN WITNESS WHEREOF, this Agreement is executed as of the date first above written.

	 	 	 	 	 	 	 
	 	 	DEBTOR:
	 
	 	 	 	 	 	 
	 	 	PRIMEENERGY CORPORATION 

PRIMEENERGY MANAGEMENT

CORPORATION, PRIME OPERATING 

COMPANY, EASTERN OIL WELL SERVICE 

COMPANY, SOUTHWEST OIL FIELD

CONSTRUCTION COMPANY 

EOWS MIDLAND COMPANY
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Beverly A. Cummings	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Beverly A. Cummings	 	 
	 

	 	 	 	Executive Vice President, Treasurer, and	 	 
	 

	 	 	 	Chief Financial Officer	 	 

- 14 -

 

	 	 	 	 	 	 	 
	 	 	SECURED PARTY:	 	 
	 
	 	 	 	 	 	 
	 	 	GUARANTY BANK, FSB, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David M. Butler	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	David M. Butler	 	 
	 

	 	 	 	Vice President	 	 

- 15 -

 

EXHIBIT A

	 	 	 
	Section 3.1:

	 	FILING LOCATIONS
	 
	 

	 	Secretary of State of Delaware
	 
	 

	 	Secretary of State of New York
	 
	 

	 	Secretary of State of Texas
	 
	 

	 	Secretary of State of West Virginia
	 
	 

	 	County Clerk of Oklahoma County, Oklahoma
	 

A-iexv10w23w5

 

EXHIBIT
10.23.5

 

AMENDED AND RESTATED

SECURITY AGREEMENT

BETWEEN

EASTERN OIL WELL SERVICE COMPANY

EOWS MIDLAND COMPANY

(DEBTOR)

AND

GUARANTY BANK, FSB, AS AGENT

(SECURED PARTY)

DECEMBER 28, 2006

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND INTERPRETATION
	 	 	1	 
	1.1 Terms Defined Above
	 	 	1	 
	1.2 Terms Defined in Credit Agreement
	 	 	1	 
	1.3 Additional Defined Terms
	 	 	1	 
	1.4 Undefined Financial Accounting Terms
	 	 	3	 
	1.5 References
	 	 	3	 
	1.6 Articles and Sections
	 	 	3	 
	1.7 Number and Gender
	 	 	3	 
	 
	 	 	 	 
	ARTICLE II GRANT OF SECURITY INTEREST
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	4	 
	3.1 Validity, Perfection and Priority
	 	 	4	 
	3.2 No Liens; Other Financing Statements
	 	 	4	 
	3.3 Location of Debtor and Collateral
	 	 	5	 
	3.4 Accounts
	 	 	5	 
	3.5 Tradenames; Prior Names
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV COVENANTS
	 	 	5	 
	4.1 Further Assurances
	 	 	5	 
	4.2 Change of Chief Executive Office
	 	 	6	 
	4.3 Change of Name or Corporate Structure
	 	 	6	 
	4.4 Title, Prohibited Liens and Filings
	 	 	6	 
	4.5 Maintain Records and Accounts
	 	 	6	 
	4.6 Right of Inspection
	 	 	7	 
	4.7 Possession of Collateral
	 	 	7	 
	4.8 Financing Statement Filings; Notifications
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V ACCOUNTS
	 	 	7	 
	5.1 Debtor Remains Liable under Accounts
	 	 	7	 
	5.2 Collections on Accounts
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VI POWER OF ATTORNEY
	 	 	8	 
	6.1 Appointment as Attorney-in-Fact
	 	 	8	 
	6.2 No Duty on the Part of Secured Party
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VII REMEDIES; RIGHTS UPON DEFAULT
	 	 	9	 
	7.1 Rights and Remedies Generally
	 	 	9	 
	7.2 Proceeds
	 	 	9	 
	7.3 Collection of Accounts
	 	 	10	 
	7.4 Disposition of Collateral
	 	 	10	 
	7.5 Debtor’s Accounts
	 	 	10	 
	7.6 Possession of Collateral
	 	 	10	 

- i -

 

	 	 	 	 	 
	 	 	Page	 
	7.7 Disposition of the Collateral
	 	 	11	 
	7.8 Recourse
	 	 	12	 
	7.9 Expenses; Attorneys’ Fees
	 	 	12	 
	7.10 Application of Proceeds
	 	 	12	 
	7.11 Limitation on Duties Regarding Preservation of Collateral
	 	 	12	 
	7.12 Waiver of Claims
	 	 	13	 
	7.13 Discontinuance of Proceedings
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VIII INDEMNITY
	 	 	13	 
	8.1 INDEMNITY
	 	 	13	 
	8.2 Indemnity Obligations Secured by Collateral; Survival
	 	 	14	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	15	 
	9.1 No Waiver; Remedies Cumulative
	 	 	15	 
	9.2 Termination; Release
	 	 	15	 
	9.3 Counterparts
	 	 	15	 
	9.4 Marshalling
	 	 	15	 
	9.5 Severability
	 	 	15	 
	9.6 Financing Statement Filing
	 	 	15	 
	9.7 Notices and Other Communications
	 	 	16	 
	9.8 Parties in Interest
	 	 	16	 
	9.9 Amendments
	 	 	16	 
	9.10 Entire Agreement
	 	 	16	 
	9.11 Governing Law
	 	 	16	 
	9.12 Jurisdiction and Venue
	 	 	16	 

- ii -

 

AMENDED AND RESTATED

SECURITY AGREEMENT

     This AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”), dated as of
December 28, 2006, is by and between EOWS MIDLAND COMPANY, a Texas corporation EASTERN
OIL WELL SERVICE COMPANY, a West Virginia Corporation (collectively the
“Debtor’”) and GUARANTY BANK, FSB, a federal savings bank as Agent for the
benefit of the Lenders (“Secured Party”).

W I
T N E S S E T H:

     WHEREAS, pursuant to the terms and conditions of the Amended and Restated Credit
Agreement dated December 28, 2006, by and among Debtor and the Secured Party and the
Lenders signatory thereto (as amended, restated, or supplemented from time to time, the
“Credit Agreement”), the Secured Party and the Lenders have agreed
to extend credit to or for the benefit of Debtor; and

     WHEREAS, the Debtor and the Secured Party entered into a Security Agreement dated
as of December 28, 2006, and the parties hereto desire to amend and restate such
Security Agreement;

     WHEREAS, pursuant to the Credit Agreement and as an inducement to the Secured Party
to extend credit to or for the benefit of the Debtor pursuant to the Credit Agreement,
Debtor has agreed to execute this Agreement in favor of the Secured Party;

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

     1.1 Terms Defined Above. As used herein, each of the terms
“Agreement,” “Credit Agreement,” “Debtor,” and “Secured
Party” shall have the meaning assigned to such term hereinabove.

     1.2 Terms Defined in Credit Agreement. Each capitalized term used but not
defined herein shall have the meaning assigned to such term in the Credit Agreement.

     1.3 Additional Defined Terms. As used herein, each of the following terms
shall have the following meanings:

     “Accounts” shall mean all accounts receivable, book debts,
notes, drafts, instruments, documents, acceptances, and other forms of
obligations now owned or hereafter received or acquired by or belonging or
owing to Debtor (including, without limitation, under any trade names,
styles, or divisions thereto), whether arising from the sale or lease of
goods or the rendition of services or any other

 

 

transaction (including, without limitation, any such obligation which
might be characterized as an account, general intangible, other than contract
rights under contracts containing prohibitions against assignment of or the
granting of a security interest in the rights of a party thereunder, or chattel
paper under the Uniform Commercial Code in effect in any jurisdiction), and all
rights of Debtor in, to, and under all purchase orders now owned or hereafter
received or acquired by it for goods or services, and all rights of Debtor to any
goods the sale or lease of which gave rise to any of the foregoing (including,
without limitation, returned or repossessed goods and rights of unpaid sellers),
and all moneys due or to become due to Debtor under all contracts for the sale or
lease of goods or the performance of services (whether or not earned by
performance) or in connection with any other transaction, now in existence or
hereafter arising, including, without limitation, all collateral security and
guarantees of any kind given by any Person with respect to any of the foregoing.

     “Account Debtor” shall mean each Person obligated on an Account,
Chattel Paper, or General Intangible.

     “Account Records” shall mean (a) all original copies of all
documents, instruments, or other writings evidencing the Accounts, (b) all
books, correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to the Accounts, including, without
limitation, all tapes, cards, computer tapes, computer discs, computer runs,
record keeping systems, and other papers and documents relating to the Accounts,
whether in the possession or under the control of Debtor or any computer bureau
or agent from time to time acting for or on behalf of Debtor or otherwise, (c)
all evidences of the filing of financing statements and the registration of
other instruments in connection therewith and amendments, supplements, or other
modifications thereto, notices to other creditors or secured parties, and
certificates, acknowledgements, or other writings, including, without
limitation, lien search reports, from filing or other registration offices, (d)
all credit information, reports, and memoranda relating thereto, and (e) all
other written or non written forms of information related in any way to the
foregoing or any Account.

     “Chattel Paper” shall mean all chattel paper (as such term is
defined in Section 9 105(a)(2) of the UCC) of the Debtor.

     “Collateral” shall have the meaning assigned to it in Article II.

     “Equipment” shall mean all of Debtor’s equipment (including, but
not limited to that described on Exhibit B attached hereto), as defined in
Section 9.102(a)(33) of the UCC, in any form, whether now owned or hereinafter
acquired and wherever located including all parts thereof and all accessories or
additions thereto, whether now owned or hereafter acquired.

     “General Intangibles” shall mean all general intangibles (as such
term is defined in Section 9 106 of the UCC) of Debtor, including, without
limitation,

- 2 -

 

rights to the payment of money (other than Accounts), net profit interests,
contracts, farmout agreements, licenses, and franchises (excluding licenses
and franchises which prohibit the assignment or grant of a security
interest by Debtor), federal income tax refunds, trade names, distributions
on certificated securities (as defined in §8 102(a)(1) of the UCC) and
uncertificated securities (as defined in §8 102(a)(2) of the UCC), computer
programs and other computer software, inventions, designs, trade secrets,
goodwill, proprietary rights, customer lists, supplier contracts, sale
orders, correspondence, advertising materials, payments due in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of
any property, reversionary interests in pension and profit sharing plans
and reversionary, beneficial and residual interests in trusts, credits with
and other claims against any Person, together with any collateral for any
of the foregoing and the rights under any security agreement granting a
security interest in such collateral.

     “Indemnitees” shall mean the Secured Party and its shareholders,
officers, directors, employees, agents, attorneys-in-fact, and affiliates.

     “Proceeds” shall mean proceeds (as such term is defined in
Section 9 306(a) of the UCC).

     “Secured Obligations” shall mean the Obligations.

     “UCC” shall mean the Uniform Commercial Code as in effect from
time to time in the State of Texas.

     1.4 Undefined Financial Accounting Terms. Undefined financial accounting
terms used in this Agreement shall have the meanings assigned to such terms according to
GAAP.

     1.5 References. The words “hereby,” “herein,” “hereinabove,” “hereinafter,”
“hereinbelow,” “hereof,” “hereunder,” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular Article,
Section, or provision of this Agreement. References in this Agreement to Articles,
Sections, or Exhibits are to such Articles, Sections, or Exhibits of this Agreement
unless otherwise specified.

     1.6 Articles and Sections. This Agreement, for convenience only, has been
divided into Articles and Sections; and it is understood that the rights and other legal
relations of the parties hereto shall be determined from this instrument as an entirety
and without regard to the aforesaid division into Articles and Sections and without
regard to headings prefixed to such Articles or Sections.

     1.7 Number and Gender. Whenever the context requires, reference herein made
to the single number shall be understood to include the plural; and likewise, the plural
shall be understood to include the singular. Words denoting sex shall be construed to
include the masculine, feminine and neuter, when such construction is appropriate; and
specific enumeration shall not exclude the general but shall be construed as cumulative.
Definitions of terms defined

- 3 -

 

in the singular or plural shall be equally applicable to the plural or singular,
as the case may be, unless otherwise indicated.

ARTICLE II

GRANT OF SECURITY INTEREST

     As security for the prompt and complete payment and performance in full of all
Secured Obligations, Debtor hereby assigns and transfers for the purpose of security and
pledges to the Secured Party and grants to the Secured Party a security interest in and
continuing lien on all right, title, and interest of Debtor in, to, and under the
following, in each case, whether now owned or existing or hereafter acquired or arising,
and wherever located (all of which is herein collectively called the
“Collateral”):

	 	(a)	 	all Accounts;
	 
	 	(b)	 	all Account Records;
	 
	 	(c)	 	all Chattel Paper;
	 
	 	(d)	 	all Equipment;
	 
	 	(e)	 	
all General Intangibles; and
	 
	 	(f)	 	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

     Debtor hereby represents and warrants to the Secured Party, which representations
and warranties shall survive execution and delivery of this Agreement, as follows:

     3.1 Validity, Perfection and Priority. The security interests in the
Collateral granted to the Secured Party hereunder constitute valid and continuing
security interests in the Collateral. Upon the filing of financing statements, naming
Debtor as “debtor” and the Secured Party as “secured party” and describing the
Collateral, in the filing offices set forth on Exhibit A, the security interests granted
to the Secured Party hereunder will constitute valid first-priority perfected security
interests in all Collateral with respect to which a security interest can be perfected by
the filing of a financing statement, subject only to Permitted Liens.

     3.2
No Liens; Other Financing Statements. (a) Except for the Lien granted to
the Secured Party hereunder and Permitted Liens, Debtor owns each item of the Collateral
free and clear of any and all Liens, rights, or claims of all other Persons, and Debtor
shall defend the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Secured Party.

- 4 -

 

          (b) No financing statement or other evidence of Lien covering or purporting
to cover any of the Collateral is on file in any public office other than (i) financing
statements in favor of the Secured Party, (ii) financing statements for which proper
termination statements have been delivered to the Secured Party for filing, and (iii)
financing statements filed in connection with Permitted Liens.

     3.3 Location of Debtor and Collateral. The chief executive office of Debtor
is located at One Landmark Square, Stamford, Connecticut 06901. The primary copies of the
Account Records are located at, and all Accounts and General Intangibles are maintained
at, and controlled and directed (including, without limitation, for general accounting
purposes) from, such chief executive office.

     3.4 Accounts. (a) Each Account (i) is and will be, in all material respects,
the genuine, legal, valid, and binding obligation of the Account Debtor in respect
thereof, representing an unsatisfied obligation of such Account Debtor, (ii) is and will
be, in all material respects, enforceable in accordance with its terms, (iii) is not and
will not be subject to any setoffs, defenses, taxes, counterclaims (except (A) with
respect to refunds, returns, and allowances in the ordinary course of business, and (B)
to the extent that such Account may not yet have been earned by performance), and (iv) is
and will be, in all material respects, in compliance with all applicable laws, whether
federal, state, local, or foreign.

          (b) No Accounts which are evidenced by Chattel Paper require the consent of the
Account Debtor in respect thereof in connection with their assignment hereunder.

     3.5 Tradenames; Prior Names. Debtor has not conducted business under any
name other than its current name during the last five years.

ARTICLE IV

COVENANTS

     Debtor covenants and agrees with the Secured Party that from and after the date of
this Agreement:

     4.1 Further Assurances. At any time and from time to time, upon the request
of the Secured Party, and at the sole expense of Debtor, Debtor will promptly and duly
execute and deliver any and all such further instruments, endorsements, powers of
attorney, and other documents, make such filings, give such notices, and take such
further action as the Secured Party may reasonably deem desirable in obtaining the full
benefits of this Agreement and the rights, remedies, and powers herein granted,
including, without limitation, the following:

          (a) the filing of financing statements, in form acceptable to the Secured Party
under the Uniform Commercial Code in effect in any jurisdiction with respect to the liens
and security interests granted hereby;

- 5 -

 

          (b) the performance of all searches of public records deemed necessary by the
Secured Party to establish and determine the priority of the security interests of the
Secured Party or to determine the presence or priority of other secured parties; and

          (c) the furnishing to the Secured Party from time to time of reports and schedules
in connection with the Collateral as required pursuant to the Credit Agreement, all in
reasonable detail and in form reasonably satisfactory to the Secured Party.

     4.2 Change of Chief Executive Office. Debtor will not move its chief
executive office except to such new location as Debtor may establish in accordance with
the last sentence of this Section. The originals of all Account Records and General
Intangibles will be kept at such chief executive office or at the locations referred to in
Section 3.3, or at such new locations as Debtor may establish in accordance with the last
sentence of this Section. All Accounts, Account Records, and General Intangibles of Debtor
will be maintained at and controlled and directed (including, without limitation, for
general accounting purposes) from the locations referred to in Section 3.3 or such new
locations as the Debtor may establish in accordance with the last sentence of this
Section. With respect to any new location, promptly upon the request of the Secured Party,
Debtor shall take all such action as the Secured Party may request to maintain the
security interest of the Secured Party in the Collateral granted hereby at all times fully
perfected with the same or better priority and in full force and effect. Debtor shall not
establish a new location for its chief executive office or such activities (or move any
such activities from the locations referred to in Section 3.3) until it shall have given
to the Secured Party not less than ten days’ prior written notice of its intention to do
so, clearly describing such new location and providing such other information in
connection therewith as the Secured Party may reasonably request.

     4.3 Change of Name or Corporate Structure. Debtor shall not change its name
or corporate structure or conduct business under any name other than its current name
without giving notice thereof to the Secured Party within ten days thereafter, clearly
describing such new name, or corporate structure or such new tradename and providing such
other information in connection therewith as the Secured Party may reasonably request.
With respect to such new name, corporate structure, or tradename, promptly upon the
request of the Secured Party, Debtor shall take all such action as the Secured Party may
reasonably request to maintain the security interest of the Secured Party in the
Collateral granted hereby at all times fully perfected with the same or better priority
and in full force and effect.

     4.4 Title, Prohibited Liens and Filings. Debtor agrees to protect the title
to the Collateral. Debtor will not pledge, mortgage, otherwise encumber, create or suffer
a Lien to exist on any of the Collateral (other than in favor of the Secured Party) or
sell, assign or otherwise transfer any of the Collateral to or in favor of any Person
other than the Secured Party without the Secured Party’s written consent. Debtor will not
file or permit to be filed or recorded any financing statement or other security
instrument with respect to the Collateral other than in favor of Secured Party.

     4.5 Maintain Records and Accounts. Debtor will keep and maintain, or cause
to be kept and maintained, at its own cost and expense satisfactory and complete records
of the Collateral, including, but not limited to, the originals of all documentation with
respect to all

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Accounts and General Intangibles and records of all payments received and all
credits granted on the Accounts, all merchandise returned, and all other dealings
therewith.

     4.6 Right of Inspection. The Secured Party shall upon reasonable notice to
Debtor have full and free access during normal business hours of Debtor to all the
books, correspondence, and records and Equipment of Debtor; and the Secured Party and
its representatives may examine the same, take extracts therefrom, and make photocopies
thereof.

     4.7 Possession of Collateral. The Collateral shall remain in Debtor’s
possession or control at all times at Debtor’s risk of loss.

     4.8 Financing Statement Filings; Notifications. Debtor recognizes that
financing statements pertaining to the Collateral have been or will be filed with the
offices of the Secretary of State for the States listed in Exhibit A hereto. Debtor will
immediately notify the Secured Party of any condition or event that may change the
proper location for the filing of any financing statement or other public notice or
recording for the purpose of perfecting a security interest in the Collateral. Without
limiting the generality of the foregoing, Debtor will (a) notify the Secured Party
within a reasonable period of time in advance of any change to a jurisdiction other than
as represented in Section 3.3 hereof, (i) in the location of Debtor’s chief place of
business, (ii) in the location of the office where Debtor keeps its records concerning
the Accounts and the General Intangibles and the original of all the Accounts Records,
or (iii) in the “location” of Debtor within the meaning of Section 9-103(c) of the UCC,
and (b) immediately notify Secured Party of any change in Debtor’s name. In any notice
furnished pursuant to this Section, Debtor will expressly state that the notice is
required by this Agreement and contains facts that will or may require additional
filings of financing statements or other notices for the purpose of continuing
perfection of the Secured Party’s security interest in the Collateral.

ARTICLE V

ACCOUNTS

     5.1 Debtor Remains Liable under Accounts. Anything herein to the contrary
notwithstanding (including, without limitation, the grant of any rights to the Secured
Party), Debtor shall remain liable under each of the Accounts to observe and perform all
the conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such Account. The Secured
Party shall have no obligation or liability under any Account (or any agreement giving
rise thereto) by reason of or arising out of this Agreement or the receipt by the
Secured Party of any payment relating to such Account pursuant hereto, nor shall the
Secured Party be obligated in any manner to perform any of the obligations of Debtor
under or pursuant to any Account (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any action to
enforce any performance, or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

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     5.2 Collections on Accounts. Prior to the occurrence of an Event of
Default, the Secured Party hereby authorizes Debtor to collect the Accounts. At any time
following and during the continuance of any Event of Default, the Secured Party may
curtail or terminate said authority at any time and itself, or by its agents, collect all
Accounts, and any payments of Accounts collected by Debtor shall be held by Debtor in
trust for the Secured Party, segregated from other funds of Debtor. All Proceeds, while
held by the Secured Party (or by Debtor in trust for the Secured Party) shall continue to
be Collateral securing all of the Secured Obligations and shall not constitute payment
thereof until applied as hereinafter provided.

ARTICLE VI

POWER OF ATTORNEY

     6.1 Appointment as Attorney-in-Fact. Debtor hereby irrevocably constitutes
and appoints the Secured Party and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact, with full irrevocable power and
authority in the place and stead of Debtor and in the name of Debtor or in its own name,
from time to time in the discretion of the Secured Party, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the foregoing,
Debtor hereby gives the Secured Party the power and right, on behalf of Debtor, without
notice to or assent by the Debtor, to do the following:

          (a) in the case of any Account, at any time when the authority of Debtor to collect
the Accounts has been curtailed or terminated pursuant hereto, or in the case of any
other Collateral, at any time when any Event of Default shall have occurred and be
continuing, in the name of Debtor or its own name, or otherwise, to take possession of
and indorse and collect any checks, drafts, notes, acceptances, or other instruments for
the payment of moneys due under, or with respect to, any Collateral; in the name of
Debtor or otherwise to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Secured Party or as the Secured Party shall direct; to ask or demand
for, collect, receive payment of, and receipt for, any and all moneys, claims, and other
amounts due or to become due at any time in respect of or arising out of any Collateral;

          (b) at any time when an Event of Default shall have occurred and be continuing, to
prepare, sign, and file financing statements and amendments thereto in the name of
Debtor;

          (c) at any time when an Event of Default shall have occurred and be continuing, to
take or cause to be taken all actions necessary to perform or comply or cause
performance or compliance with the terms of this Agreement, including, without
limitation, actions to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, to effect any repairs or obtain any insurance called
for by the terms of this Agreement, and to pay all or any part of the premiums therefor
and the costs thereof;

          (d) upon the occurrence and during the continuance of any Event of Default, (i) to
sign and indorse any invoices, freight or express bills, bills of lading, storage or
warehouse

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receipts, drafts against debtor, assignments, verifications, notices, and other documents in
connection with any of the Collateral, (ii) to commence and prosecute any suits, actions, or
proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral, (iii) to defend
any suit, action, or proceeding brought against Debtor with respect to any Collateral, (iv) to
settle, compromise, or adjust any suit, action, or proceeding described in the preceding clause
and, in connection therewith, to give such discharges or releases as the Secured Party may deem
appropriate, and (v) generally, to sell or transfer and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the Secured Party were
the absolute owner thereof for all purposes, and to do, at the option of the Secured Party and the
expense of Debtor, at any time, or from time to time, all acts and things which the Secured Party
deems necessary to protect, preserve, or realize upon the Collateral and the Liens of the Secured
Party thereon and to effect the intent of this Agreement, all as fully and effectively as Debtor
might do; and

          (e) at any time when an Event of Default shall have occurred and be continuing, to execute,
in connection with any foreclosure, any endorsements, assignments, or other instruments of
conveyance or transfer with respect to the Collateral.

     Debtor hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable
so long as any Obligation remains outstanding or any Commitment exists.

     6.2 No Duty on the Part of Secured Party. The powers conferred on the Secured Party
hereunder are solely to protect the interests of the Secured Party in the Collateral and shall not
impose any duty upon the Secured Party to exercise any such powers. The Secured Party shall be
accountable only for amounts that it actually receives as a result of the exercise of such powers,
and, except for its willful misconduct and/or own gross negligence, neither it nor any of its
officers, directors, employees, or agents shall be responsible to the Debtor for any act or
failure to act hereunder.

ARTICLE VII

REMEDIES; RIGHTS UPON DEFAULT

     7.1 Rights and Remedies Generally. If an Event of Default shall occur and be
continuing, then and in every such case, the Secured Party shall have all the rights of a
secured
party under the UCC, all rights now or hereafter existing under all other applicable laws,
and,
subject to any mandatory requirements of applicable law then in effect, all rights set forth
in this
Agreement and the other Loan Documents. No enumeration of rights in this Section or
elsewhere in this Agreement or in any other Loan Document or other agreement shall be deemed
to in any way limit the rights of the Secured Party as described in this Section.

     7.2 Proceeds. If an Event of Default shall occur and be continuing, in addition to the
rights of the Secured Party specified with respect to the payment of Accounts, (a) all
Proceeds
received by Debtor consisting of cash, checks, and other near cash items shall be held by
Debtor
in trust for the Secured Party, segregated from other funds of Debtor, and shall forthwith
upon

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receipt by Debtor, be turned over to the Secured Party, in the same form received
by Debtor (appropriately indorsed or assigned by the Debtor to the order of the Secured
Party or in such other manner as shall be satisfactory to the Secured Party), and (b) any
and all such Proceeds received by the Secured Party (whether from Debtor or otherwise),
or any part thereof, shall be applied by the Secured Party as provided in Section 7.10
hereof.

     7.3 Collection of Accounts. If an Event of Default shall occur and be
continuing:

          (a) the Secured Party may instruct the obligor or obligors on any obligation owing
or purporting to be owed to Debtor constituting the Collateral (including, without
limitation, the Accounts) to make any payment required by the terms of such obligation
directly to the Secured Party;

          (b) the Secured Party shall have the right from time to time to modify (including,
without limitation, to extend the time for payment or arrange for payment in
installments) or waive rights under any such obligation and to compromise or settle
counterclaims or setoffs with the obligor under any such obligation; and

          (c) any and all of such proceeds of such collections paid to the Secured Party, or
any part thereof, (after deduction of the Secured Party’s expenses of collection,
including, without limitation, reasonable attorneys’ fees and disbursements), shall be
applied by the Secured Party as provided in Section 7.10 hereof.

     7.4 Disposition of Collateral. If an Event of Default shall occur and be
continuing:

          (a) the Secured Party may direct Debtor to sell, assign, or otherwise liquidate or
dispose of all or from time to time any portion of the Collateral, and Debtor shall do
so, and the Secured Party may take possession of the Proceeds of such Collateral. The
Secured Party may direct Debtor to direct that all Proceeds of such Collateral be paid
directly to the Secured Party or may permit the Proceeds of such Collateral to be paid
to Debtor and all such Proceeds consisting of cash, checks, or near cash items shall be
held by Debtor in trust for the Secured Party, segregated from other funds of Debtor in
a separate deposit account containing only Proceeds and shall forthwith upon receipt by
Debtor, be turned over to the Secured Party, in the same form received by Debtor
(appropriately indorsed or assigned by Debtor to the order of the Secured Party or in
such other manner as shall be satisfactory to the Secured Party); and

          (b) any and all such Proceeds received by the Secured Party (whether from Debtor or
otherwise), shall be applied by the Secured Party as provided in Section 7.10 hereof.

     7.5 Debtor’s Accounts. If an Event of Default shall occur and be continuing,
the Secured Party may liquidate any securities held in any accounts of Debtor and apply
the proceeds thereof and any other amounts held in any accounts of Debtor as provided in
Section 7.10 hereof.

     7.6 Possession of Collateral. If an Event of Default shall occur and be
continuing, (a) the Secured Party may, personally or by agents or attorneys, immediately
retake possession of the Collateral (including the originals of all or any Accounts and
Account Records) or any part

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thereof, from Debtor or any other Person which then has possession of any part thereof
with or without notice or judicial process, and for that purpose may enter upon Debtor’s
premises where any of the Collateral is located and remove the same and may make
reasonable use in connection with such removal of any and all services, supplies, aids,
and other facilities of Debtor, and (b) upon three days’ notice to Debtor, Debtor shall,
at its own expense, assemble the Collateral, including, without limitation, the originals
of all Account Records (or from time to time any portion thereof) and make it available
to the Secured Party by delivery to the Secured Party at any location designated by the
Secured Party which is reasonably convenient to both parties, whether at the premises of
Debtor or the Secured Party or elsewhere. Debtor shall, at its sole expense, store and
keep any Collateral so assembled at such place or places pending further action by the
Secured Party and while the Collateral shall be so stored and kept, provide such guards
and maintenance services as shall be reasonably necessary to protect the same and to
preserve and maintain the Collateral in good condition. Debtor’s obligation to so
assemble and deliver the Collateral is of the essence of this Agreement and, accordingly,
upon application to a court of equity having jurisdiction, the Secured Party shall be
entitled to a decree requiring specific performance by the Debtor of such obligation.

     7.7 Disposition of the Collateral. If an Event of Default shall occur and
be continuing, the Secured Party may sell, assign, lease, give an option or options to
purchase, or otherwise dispose of the Collateral (or contract to do any of the
foregoing) under one or more contracts or as an entirety, and, to the extent permitted
by applicable law, without the necessity of gathering at the place of sale the property
to be sold, at public or private sale or sales, conducted by any officer, nominee or
agent of, or auctioneer or attorney for the Secured Party at any location of any third
party conducting or otherwise involved in such sale or any office of the Secured Party
or elsewhere and in general in such manner, at such time or times and upon such terms
and conditions and at such price as may be commercially reasonable, for cash or on
credit or for future delivery without assumption of any credit risk. Any of the
Collateral may be sold, leased, assigned, or options or contracts entered to do so, or
otherwise disposed of, in the condition in which the same existed when taken by the
Secured Party or after any overhaul or repair which may be commercially reasonable. Any
such disposition which shall be a private sale or other private proceeding shall be made
upon not less than ten days’ written notice to Debtor specifying the time after which
such disposition is to be made and the intended sale price or other consideration
therefor. Any such disposition which shall be a public sale shall be made upon not less
than ten days’ written notice to Debtor (which Debtor agrees to be commercially
reasonable) specifying the time and place of such sale and, in the absence of applicable
requirements of law to the contrary, shall be by public auction (which may, at the
option or the Secured Party, be subject to reserve), after publication of commercially
reasonable notice of such auction. To the extent permitted by applicable law, the
Secured Party may bid for and become the purchaser of the Collateral or any item
thereof, offered for sale in accordance with this Section without accountability to
Debtor (except to the extent of surplus money received) as provided below. In the
payment of the purchase price of the Collateral, the purchaser shall be entitled to have
credit on account of the purchase price thereof of amounts owing to such purchaser on
account of any of the Secured Obligations and any such purchaser may deliver notes,
claims for interest, or claims for other payment with respect to such Secured
Obligations in lieu of cash up to the amount which would, upon distribution of the net
proceeds of such sale, be payable thereon. Such notes, if the amount payable hereunder
shall be less than the amount

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due thereon, shall be returned to the holder thereof after being appropriately
stamped to show partial payment. Notwithstanding the foregoing, if the Collateral or any
portion thereof is perishable or threatens to decline speedily in value or is of a type
customarily sold in a recognized market only such notice as shall be reasonably
practicable shall be required.

     7.8 Recourse. Debtor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to satisfy the
Secured Obligations. Debtor shall also be liable for all reasonable expenses of the
Secured Party incurred in connection with collecting such deficiency, including, without
limitation, the reasonable fees and disbursements of any attorneys employed by the
Secured Party to collect such deficiency.

     7.9 Expenses; Attorneys’ Fees. Debtor shall reimburse the Secured Party for
all its reasonable expenses in connection with the exercise of its rights and remedies
hereunder, including, without limitation, reasonable attorneys’ fees and legal expenses
incurred by the Secured Party.

     7.10 Application of Proceeds. The proceeds of any disposition of Collateral
shall be applied as follows:

          (a) first, to payment or reimbursement of that portion of the Obligations
constituting fees, expenses and indemnities payable to the Agent in its capacity as
such;

          (b) second, pro rata to payment or reimbursement of that portion of the Obligations
constituting fees, expenses and indemnities payable to the Lenders;

          (c) third, pro rata to payment of accrued interest on the Loans;

          (d) fourth, pro rata to payment of principal outstanding on the Loans and
Obligations owed to any Lender or affiliate of any Lender under any Commodity Hedge
Agreement or Rate Management Transaction;

          (e) fifth, pro rata to any other Obligations;

          (f) sixth, to serve as cash collateral to be held by the Agent to secure the LC
Exposure; and

          (g) seventh, any excess, after all of the Obligations shall have been indefeasibly
paid in full in cash, shall be paid to the Borrower or as otherwise required by any
Governmental Authority.

     7.11 Limitation on Duties Regarding Preservation of Collateral. The Secured
Party’s
sole duty with respect to the custody, safekeeping, and physical preservation of the
Collateral in
its possession, under Section 9.207 of the UCC or otherwise, shall be to deal with
it in the same
manner as the Secured Party deals with similar property for its own account. The
Secured Party
shall have no obligation to take any steps to preserve rights against prior parties
to any
Collateral. Except for matters constituting willful misconduct and/or gross
negligence, neither
the Secured Party nor any of its directors, officers, employees, or agents shall be
liable for failure
to demand, collect, or realize upon all or any part of the Collateral or for any
delay in doing so or

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shall be under any obligation to sell or otherwise dispose of any Collateral upon
the request of the Debtor or otherwise.

     7.12 Waiver of Claims. Except as otherwise provided in this Agreement,
Debtor
hereby waives, to the extent permitted by applicable law, notice of and judicial
hearing in
connection with the Secured Party’s taking possession or the Secured Party’s
disposition of any
of the Collateral in accordance herewith, including, without limitation, any and
all prior notice
and hearing for any prejudgment remedy or remedies and any such right which the
Debtor would
otherwise have under the constitution or any statute of the United States or any
state, and Debtor
hereby further waives, to the extent permitted by law:

          (a) all damages occasioned by such taking of possession except any damages which
are the direct result of the willful misconduct and/or gross negligence of the Secured
Party;

          (b) all other requirements as to the time, place, and terms of sale or other
requirements with respect to the enforcement of the rights of the Secured Party
hereunder;

          (c) demand of performance or other demand, notice of intent to demand or
accelerate, notice of acceleration, presentment, protest, advertisement, or notice of
any kind to or upon Debtor or any other Person, except as may be required by the Credit
Agreement; and

          (d) all rights of redemption, appraisement, valuation, diligence, stay, extension,
or moratorium now or hereafter in force under any applicable law in order to stay or
delay the enforcement of this Agreement, including the absolute sale of the Collateral
or any portion thereof, and Debtor, for itself and all who may claim under it, insofar
as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.

     7.13 Discontinuance of Proceedings. In case the Secured Party shall have
instituted
any proceeding to enforce any right, power, or remedy under this Agreement by
foreclosure,
sale, entry, or otherwise, and such proceeding shall have been discontinued or
abandoned for any
reason, then and in every such case, Debtor and the Secured Party shall be returned
to their
former positions and rights hereunder with respect to the Collateral subject to the
security
interest created under this Agreement, and all rights, remedies, and powers of the
Secured Party
shall continue as if no such proceeding had been instituted.

ARTICLE VIII

INDEMNITY

     8.1 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, COSTS, EXPENSES, OR 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

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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.

          (b) Debtor agrees that upon written notice by any such Indemnitee of any assertion
that could give rise to an Expense, Debtor shall assume full responsibility for the
defense thereof. Without limiting the application of part (a) of this Section, Debtor
agrees to pay or reimburse such Indemnitee on demand for any and all reasonable fees,
costs, and expenses of whatever kind or nature incurred in connection with the creation,
preservation, or protection of the Secured Party’s Liens on, and security interests in,
the Collateral, including, without limitation, all reasonable fees and taxes in
connection with the recording or filing of instruments and documents in public offices,
payment, or discharge of any taxes or Liens or security interests upon or in respect of
the Collateral, premiums for insurance with respect to the Collateral, all reasonable
expenses incurred in the custody, preservation, use, or operation of the Collateral when
Collateral is in the Secured Party’s possession, and all other reasonable fees, costs,
and expenses in connection with protecting, maintaining, or preserving the Collateral and
the Secured Party’s interest therein, whether through judicial proceedings or otherwise,
or in defending or prosecuting any actions, suits, or proceedings arising out of or
relating to the Collateral.

          (c) Without limiting the application of parts (a) or (b) of this Section, Debtor
agrees to pay, indemnify, and hold each Indemnitee harmless from and against any
Expenses which such Indemnitee may suffer, expend, or incur in consequence of or growing
out of any misrepresentation by any Debtor in this Agreement or in any statement or
writing contemplated by or made or delivered pursuant to or in connection with this
Agreement.

          (d) If and to the extent that the obligations of Debtor under this Section are
unenforceable for any reason, Debtor hereby agrees to make the maximum contribution to
the payment and satisfaction of such obligations which is permissible under applicable
law.

     8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid
by any Indemnitee as to which such Indemnitee has the right to reimbursement shall
constitute Secured Obligations secured by the Collateral. The indemnity obligations of
the Debtor contained in this Article VIII shall continue in full force and effect
notwithstanding the full payment and performance of the Secured Obligations and the
termination of this Agreement.

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ARTICLE IX

MISCELLANEOUS

     9.1 No Waiver; Remedies Cumulative. No failure or delay on the part of the
Secured Party in exercising any right, power, or privilege hereunder and no course of
dealing between any Debtor and the Secured Party shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power, or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power, or
privilege. A waiver by the Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Secured Party
would otherwise have on any future occasion. The rights and remedies herein expressly
provided are cumulative, may be exercised singly or concurrently and as often and in such
order as the Secured Party deems expedient, and are not exclusive of any rights or
remedies which the Secured Party would otherwise have whether by agreement or now or
hereafter existing under applicable law. No notice to or demand on Debtor in any case
shall entitle Debtor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Secured Party to any other or
further action in any circumstances without notice or demand.

     9.2 Termination; Release. When the Secured Obligations have been
indefeasibly paid and performed in full and the Commitment has terminated, this
Agreement shall terminate, and the Secured Party, at the request and sole expense of
Debtor, will execute and deliver to Debtor the proper instruments (including Uniform
Commercial Code termination statements) acknowledging the termination of this Agreement,
and will duly assign, transfer, and deliver to Debtor, without recourse, representation,
or warranty of any kind whatsoever, such of the Collateral as may be in possession of
the Secured Party and has not theretofore been disposed of, applied, or released.

     9.3 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

     9.4 Marshalling. The Secured Party shall not be under any obligation to
marshall any assets in favor of Debtor or any other Person or against or in payment of
any or all of the Secured Obligations.

     9.5 Severability. In case any provision in or obligation under this
Agreement or the Secured Obligations shall be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall not in
any way be affected or impaired thereby.

     9.6 Financing Statement Filing. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement and may be filed in lieu of the
original to the extent permitted by applicable law.

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     9.7 Notices and Other Communications. Except as to oral notices
expressly authorized herein, all notices, requests, and communications under this
Agreement shall be in writing (including by telecopy). Unless otherwise expressly
provided herein, any such notice, request, or communication shall be deemed to have been
duly given or made when provided in accordance with the terms of the Credit Agreement.

     9.8 Parties in Interest. This Agreement shall be binding upon and inure to
the benefit of Debtor, the Secured Party, and their respective legal representatives,
successors, and assigns. No other Person shall have any right, benefit, priority, or
interest hereunder or as a result hereof or have standing to require satisfaction of
provisions hereof in accordance with their terms, and any or all of such provisions may be
freely waived in whole or in part by the Secured Party at any time if the Secured Party in
its sole discretion deems it advisable to do so.

     9.9 Amendments. Neither this Agreement nor any provision hereof may be
amended, supplemented, modified, discharged, or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the amendment,
supplement, modification, discharge, or termination is sought.

     9.10 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 hereto 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.

     9.11 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).

     9.12 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 Dallas,
Dallas County, Texas. Debtor hereby submits to the jurisdiction of any local, state, or
federal court located in Dallas, Dallas 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.

- 16 -

 

     IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.

	 	 	 	 	 
	 	DEBTOR:

EOWS MIDLAND COMPANY

EASTERN OIL WELL SERVICE COMPANY

 	 
	 	By:  	/s/ Beverly A. Cummings
 	 
	 	 	Beverly A. Cummings      	 
	 	 	Executive Vice President, Treasurer, and

Chief Financial Officer 	 
	 

- 17 -

 

	 	 	 	 	 
	 	SECURED PARTY:

GUARANTY BANK, FSB

 	 
	 	By:  	/s/ David M. Butler
 	 
	 	 	David M. Butler 	 
	 	 	Vice President 	 
	 

- 18 -

 

EXHIBIT A

	 	 	 
	Section 3.1:

	 	FILING LOCATIONS
	 
	 	 
	 

	 	Secretary of State of Texas
	 
	 	 
	 

	 	Secretary of State of West Virginia

A-i 

 

EXHIBIT B

DESCRIPTION OF EQUIPMENT

	1.	 	1980 WILSON Mogul 42B D/D Drum Back-In Well Service Rig, S/N-10677, (Rig No. 2)
LEBUS f/1” Tubing Line, 650’ of 1” Tubing Line, 9,000’ of 9/16” Sandline, Air Clutches,
PARMAC 22SR Hydromatic Brake p/b DETROIT 12V-71N Diesel Engine, S/N-N/A, w/Electric Starter,
Radiator, ALLISON CLBT-5860 Transmission, WILSON 96’H 180,000# Static Hook Load Telescoping
Mast, S/N-N/A, Hydraulically Raised & Scoped, Single 3-Stage Raising Ram, Double Tubing
Board, Triple Rod Basket, All Mounted on WILSON 5-Axle Carrier, VIN-N/A (TX Lic #16P-146),
w/(6) Hydraulic Leveling jacks, KOENIG Hydraulic Utility Winch, Folding Walkways w/Stairs,
Fuel, Air, Water & Hydraulic Tanks, Adjustable Work Platform, 445/65Rx22.5 Front & 11.00x20
Rear Tires (unit #8617) together with well service tools described as follows:
	 
	 	 	McKISSICK 83A 100-Ton Weighted Tubing Block w/(3) 24” Sheaves f/1” Line
	 
	 	 	Rod Clevis
	 
	 	 	(2) 2-1/4” x 72” Elevator Links
	 
	 	 	FOSTER 58-93 Hydraulic Tubing Tongs, S/N-1840, w/Backup & Lift Cylinders
	 
	 	 	CAVINS Type C-101 2-3/8” to 2-7/8” Air Tubing Slips
	 
	 	 	GUIBERSON Type H Double Oil Saver w/Hand Pump, Lubricator & Hose
	 
	 	 	KING OIL TOOLS 2-7/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	DENCON 2-3/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	Tubing Safety Valve
	 
	 	 	BJ Mark IV Hydraulic Rod Tongs, S/N-SR3298RR
	 
	 	 	20-Ton Rod Hook
	 
	 	 	DOUBLE E Rod Stripper
	 
	 	 	(6) Rod Elevators
	 
	 	 	(6) Snapper-Type Rod Wrenches
	 
	 	 	MARTIN-DECKER Clipper 0 180,000# Weight Indicator
	 
	 	 	OIL WORKS, INC. (Rebuilt TOTCO) Hydromast Pad-Type Weight Indicator, S/N-2007
	 
	2.	 	1980 WILSON Mogul 42B Double Drum Back-In Well Service Rig, S/N-10650, (Rig No. 3)
ZEBUS f/1” Tubing Line, 575’ of 1” Tubing Line, 11,000’ of 9/16” Sandline, Air

B-i 

 

	 	 	Clutches, PARMAC 122 Hydromatic Brake, S/N-53087, p/b DETROIT 8V-71N Diesel
Engine w/Electric Starter, Radiator, ALLISON CLBT-5860 Transmission, WILSON 96-180
96’H 180,000# Static Hook Load Telescoping Mast, S/N-N/A, Hydraulically Raised &
Scoped, Single 3-Stage Raising Ram, Double Tubing Board, Triple Rod Basket, All
Mounted on WILSON 5-Axle Carrier, VIN-N/A (TX Lic #16P-147), w/(4) Hydraulic
Leveling jacks, (4) Manual Leveling Jacks, KOENIG Hydraulic Utility Winch, Folding
Walkways w/Stairs, Fuel, Air, Water & Hydraulic Tanks, Adjustable Work Platform,
385/65Rx22.5 Front & 10.00Rx20 Rear Tires (unit #8616) together with well service
tools described as follows:
	 
	 	 	McKISSICK 83A 100-Ton Weighted Tubing Block w/(3) 24” Sheaves f/1” Line
	 
	 	 	Rod Clevis
	 
	 	 	(2) 1-1/4” x 72” Elevator Links
	 
	 	 	FOSTER 58-93R Hydraulic Tubing Tongs, S/N-632, w/Backup & Lift Cylinders
	 
	 	 	CAVINS Type TC-101 2-3/8” to 2-7/8” Air Tubing Slips
	 
	 	 	GUIBERSON Type H Double Oil Saver w/Hand Pump, Lubricator & Hose
	 
	 	 	BJ 2-7/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	BJ 2-3/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	Tubing Safety Valve
	 
	 	 	
BJ Mark IV Hydraulic Rod Tongs, S/N-2310
	 
	 	 	RATIGAN 20-Ton Rod Hook
	 
	 	 	BELL RUBBER BRS 1 Rod Stripper
	 
	 	 	(6) Rod Elevators 
	 
	 	 	(6) Snapper-Type Rod Wrenches
	 
	 	 	MARTIN-DECKER Clipper 0 180,000# Weight Indicator
	 
	 	 	OIL WORKS, INC. (Rebuilt TOTCO) Hydromast Pad-Type Weight Indicator
	 
	3.	 	1968 SKYTOP 4210 Double Drum Back-In Well Service Rig, S/N-4210-382, (Rig No. 4)
LEBUS f/1” Tubing Line, 650’ of 1” Tubing Line, 13,000’ of 9/16” Sandline, Air
Clutches, PARMAC 15” DR Hydromatic Brake p/b DETROIT 8V-71N Diesel Engine,
S/N-8VA794503, w/Electric Starter, Radiator, ALLISON CLBT-4460 Transmission,
SKYTOP 96’H 180,000# Static Hook Load Telescoping Mast, S/N-LXT120, Hydraulically
Raised & Scoped, Single 3 Stage Raising Ram, Double Tubing Board, Triple Rod
Basket, All Mounted on 1968 SKYTOP 4 Axle Carrier, VIN-N/A, w/(4)

B-ii 

 

	 	 	Hydraulic Leveling Jacks, Hydraulic Utility Winch, Folding Walkways w/Stairs,
Fuel, Air, Water & Hydraulic Tanks, Adjustable Work Platform, 385/65Rx22.5 Front &
10.00x20 Rear Tires (Unit #11016) together with well service tools described as
follows:
	 
	 	 	McKISSICK 75-Ton Tubing Block w/(3) 24” Sheaves f/1” Line
	 
	 	 	(2) Rod Clevises
	 
	 	 	(2) 1-1/4” x 72” Elevator Links
	 
	 	 	FOSTER 58-93R Hydraulic Tubing Tongs, S/N-436, w/Backup & Lift Cylinders w/(2)
Sets 4 1/2” Backup Dies, (1)5 1/2” Drag Ring & Top Plate, Extra Sets of 2 3/8” to
4 1/2” Heads
	 
	 	 	CAVINS TB-101 Air Tubing Slips w/2-3/8”, 2-7/8”, 4-1/2” & 5-1/2” Inserts
	 
	 	 	GUIBERSON Type H Double Oil Saver w/Hand Pump, Lubricator & Hose
	 
	 	 	2-7/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	2-3/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	CARTER TOOL CO. Hydraulic Rod Tongs, S/N-N/A
	 
	 	 	20-Ton Rod Hook
	 
	 	 	DOUBLE E Rod Stripper
	 
	 	 	(6) Rod Elevators, (2) 1.25” Rod Elevators
	 
	 	 	(6) Snapper-Type Rod Wrenches, (2) 1.25” Rod Wrenches
	 
	 	 	MARTIN-DECKER Clipper 0 220,000# Weight Indicator (Recalibrated by NATIONAL OIL
WELL 12/05/01)
	 
	 	 	Hydraulic Pump f/FOSTER 58-93R Tubing Tongs
	 
	4.	 	1970 SKYTOP 4212 Double Drum Back-In Well Service Rig, S/N-99, (Rig No. 5)
LEBUS f/1” Tubing Line, 575’ of 1” Tubing Line, 9000’ of 9/16” Sandline, Makeup
Catwheel, Air Clutches, PARMAC 15DR Hydromatic Brake p/b DETROIT 12V-71N Diesel
Engine w/Electric Starter, Radiator, ALLISON TG-627 Transmission, SKYTOP 96’H
210,000# Static Hook Load Telescoping Mast, Hydraulically Raised & Scoped, Single
3-Stage Raising Ram, Double Tubing Board, Triple Rod Basket, All Mounted on SKYTOP
5-Axle Carrier w/(4) Hydraulic Leveling Jacks, TULSA Hydraulic Utility Winch,
Folding Walkways w/Stairs, Fuel, Air, Water & Hydraulic Tanks, Adjustable Work
Platform, 385/65Rx22.5 Front & 10.00Rx20 Rear Tires (Unit #11026) together with
well service tools described as follows:
	 
	 	 	McKISSICK 83A 100-Ton Weighted Tubing Block w/(3) 24” Sheaves f/1” Line

B-iii 

 

	 	 	Rod Clevis
	 
	 	 	(2) 2-1/4” x 72” Elevator Links
	 
	 	 	FOSTER 58-93R Hydraulic Tubing Tongs w/Backup & Lift Cylinders
	 
	 	 	GUIBERSON T-60 2-3/8” to 2-7/8” Air Tubing Slips
	 
	 	 	GUIBERSON Type H Double Oil Saver w/Hand Pump, Lubricator & Hose
	 
	 	 	BJ 2-3/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	DIEHL 2-7/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	Tubing Safety Valve
	 
	 	 	OIL COUNTRY Mark IV Hydraulic Rod Tongs, S/N-N/A
	 
	 	 	DOUBLE E Rod Stripper
	 
	 	 	(6) Rod Elevators
	 
	 	 	(6) Snapper-Type Rod Wrenches
	 
	 	 	Assorted Rod Transfers
	 
	 	 	TOTCO Hydromast 0-180,000# Pad-Type Weight Indicator
	 
	5.	 	1984 HAROLD LEE ENGINEERING Double Drum Back-In Well Service Rig, (Rig No. 1)
S/N-N/A, LEBUS f/1” Tubing Line, 650’ of 1” Tubing Line, 9000’ of 9/16”
Sandline, Air Clutches, 15” Double Hydromatic Brake p/b DETROIT 8V 92T Diesel
Engine, S/N-N/A, w/Electric Starter, Radiator, ALLISON CLBT-5860 Transmission,
QUINCY 325 Air Compressor, 1989 HAROLD LEE ENGINEERING 96’H 250,000# Static Hook
Load Telescoping Mast, S/N-847, Hydraulically Raised & Scoped, Single 3-Stage
Raising Ram, Double Tubing Board, Triple Rod Basket, All Mounted on 1984
HENDRICKSON 5-Axle Carrier, VIN-N/A (TX Lic #16P-185) w/(6) Hydraulic Leveling
Jacks, GEARMATIC Hydraulic Utility Winch, Folding Walkways w/Stairs, Fuel, Air,
Water & Hydraulic Tanks, Adjustable Work Platform, 385/65Rx22.5 Front & 10.00Rx20
Rear Tires (Unit #7253) together with well service tools described as follows:
	 
	 	 	SOWA 100-Ton Tubing Block w/(3) 24” Sheaves f/1” Line
	 
	 	 	Rod Clevis
	 
	 	 	(2) 2-1/4” x 72” Elevator Links
	 
	 	 	PECK-O-MATIC 63 Hydraulic Tubing Tongs w/Backup & Lift Cylinder
	 
	 	 	CAVINS B 2-3/8” Air Tubing Slips

B-iv 

 

	 	 	GUIBERSON Type H Double Oil Saver w/Hand Pump, Lubricator & Hose
	 
	 	 	KING OIL TOOLS 2 7/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	BJ 2-3/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	TIW 2-3/8” Tubing Safety Valve
	 
	 	 	Tubing Stripper w/Companion Flange
	 
	 	 	20-Ton Rod Hook
	 
	 	 	DOUBLE E Rod Stripper
	 
	 	 	(6) 5/8” &
3/4
” – 7/8” Rod Elevators
	 
	 	 	(8) 5/8” &
3/4 ” – 7/8” Snapper-Type Rod Wrenches
	 
	 	 	TOTCO Hydromast 0 150,000# Pad-Type Weight Indicator
	 
	 	 	TOWNSEND 7 1/16” 3000# Double Hydraulic Blowout Preventer
	 
	6.	 	1975 FRANKS 1287/160 DTD-HT Double Drum Back-In Well Service Rig, (Rig No. 2)
S/N-75022-6, LEBUS f/1” Tubing Line, 650’ of 1” Tubing Line, 12,000’ of 9/16”
Sandline, Breakout Catwheel, Air Clutches, PARMAC 122 12” Double Hydromatic Brake
p/b DETROIT 8V-71 Diesel Engine, S/N-8VA308118, w/Electric Starter, Radiator,
ALLISON CLT-4460 Transmission, FRANKS Tri-Scope 96’H 150,000# Static Hook Load
Telescoping Mast, S/N-D 150961193, Hydrauhcally Raised & Scoped, Single 3-Stage
Raising Ram, Double Tubing Board, Triple Rod Basket, All Mounted on 1975 FRANKS
Explorer III 300C 4 Axle Carrier, VIN-195396 (TX Lic #12P-477) w/(4) Hydraulic
Leveling Jacks, KOENIG Hydraulic Utility Winch, Folding Walkways w/Stairs, Fuel,
Air, Water & Hydraulic Tanks, Adjustable Work Platform, 425/65R22.5 Front &
10.00Rx20 Rear Tires (Unit #11041) together with well service tools described as
follows:
	 
	 	 	SOWA 100-Ton Tubing Block w/(3) 24” Sheaves f/1” Line
	 
	 	 	Rod Clevis
	 
	 	 	(2) 1-1/2” x 72” Elevator Links
	 
	 	 	FOSTER 58-93R Hydraulic Tubing Tongs w/Backup & Lift Cylinder
	 
	 	 	OIL COUNTRY-Style/CAVINS Type B-Type 2-7/8” Air Tubing Slips
	 
	 	 	GUIBERSON Type H Double Oil Saver w/Hand Pump, Lubricator & Hose
	 
	 	 	BJ 2-3/8” 100-Ton Center Latch Tubing Elevators

B-v 

 

	 	 	OIL COUNTRY 2-7/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	TIW 2-3/8” Tubing Safety Valve
	 
	 	 	BJ Tubing Stripper
	 
	 	 	OIL COUNTRY 20-Ton Rod Hook
	 
	 	 	DOUBLE E Rod Stripper
	 
	 	 	(5) 3/4”, 5/8” & 7/8” Rod Elevators
	 
	 	 	(2) 1”, 3-7/8” to 3/4” & (2) 5/8” Snapper-Type Rod Elevators
	 
	 	 	MARTIN-DECKER Clipper 0-180,000# Weight Indicator
	 
	 	 	TOWNSEND 7-1/16” 3000# Double Hydraulic Blowout Preventer
	 
	7.	 	1982 FRANKS 1058/120 Double Drum Back-In Well Service Rig, (Rig No. 3) S/N- 82115-6,
LEBUS f/1” Tubing Line, 650’ of 1” Tubing Line, 8000’ of 9/16” Sandline, Air
Clutches p/b DETROIT 8V-71N Diesel Engine, S/N-N/A, w/Electric Starter, Radiator, ALLISON
CLT-750 Transmission, FRANKS Tri-Scope 96’H 150,000# Static Hook Load Telescoping Mast,
S/N-D150962428, Hydraulically Raised & Scoped, Single 3-Stage Raising Ram, Double Tubing
Board, Triple Rod Basket, All Mounted on 1982 FRANKS Mobilrig 300 4-Axle Carrier, VIN-19310
(TX Lic #23P-938) w/(4) Hydraulic Leveling Jacks, MFG N/A Hydraulic Utility Winch, Folding
Walkways w/Stairs, Fuel, Air, Water & Hydraulic Tanks, Adjustable Work Platform,
385/65Rx22.5 Front & 11.00x20 Rear Tires (Unit #7264) together with well service tools
described as follows:
	 
	 	 	WILSON 100-Ton Tubing Block, S/N-N/A, w/(3) 24” Sheaves f/1” Line
	 
	 	 	Rod Clevis
	 
	 	 	(2) 1-1/2” x 72” Elevator Links
	 
	 	 	FOSTER 58-93R Hydraulic Tubing Tongs, S/N-N/A, w/Backup & Lift Cylinder
	 
	 	 	GUIBERSON Type H Double Oil Saver w/Hand Pump, Lubricator & Hose
	 
	 	 	OIL COUNTRY 2-3/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	BJ 2-7/8” 100-Ton Center Latch Tubing Elevators
	 
	 	 	TIW 2-3/8” Tubing Safety Valve
	 
	 	 	GUIBERSON JU Tubing Stripper w/Companion Flange
	 
	 	 	RATIGAN 20-Ton Rod Hook

B-vi 

 

	 	 	DOUBLE E Rod Stripper
	 
	 	 	(6) 5/8” to 7/8” &
3/4 Rod Elevators
	 
	 	 	(6)5/8” to 7/8” &
3/4 Snapper-Type Rod Wrenches
	 
	 	 	MARTIN-DECKER 180,000# Weight Indicator
	 
	 	 	TOWNSEND 7-1/16” 3000# Double Hydraulic Blowout Preventer

B-vii

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