Document:

ex10-2.htm

 

EXHIBIT 10.2

 

EMPLOYMENT AGREEMENT

SAMUEL BORGESE

 

EMPLOYMENT AGREEMENT (the “Agreement”) dated as of January 18, 2011 by and between El Pollo Loco, Inc. (the “Company”) and Samuel Borgese (the “Executive”).

 

WHEREAS, the Company desires to employ Executive and to enter into an agreement embodying the terms of such employment; and

 

WHEREAS, Executive is willing to accept such employment on the terms hereinafter set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

 

	
1.

	
Term of Employment; Executive Representation.

 

	
  

	
(a)

	
Employment Term.  Subject to the terms and conditions set forth in this Agreement, the term of Executive's employment under this Agreement shall commence on January 18, 2011 (the “Effective Date”) and end on the second anniversary of the Effective Date (the “Employment Term”).  The Employment Term shall terminate upon termination of Executive's employment as set forth in Section 7. Additionally, if not terminated pursuant to Section 7, or by either party by delivery of written notice to the other party (delivered not less than thirty (30) days prior to the end of the initial Employment Term) of its desire not to renew the Employment Term, the Employment Term shall automatically renew for an additional one (1) year renewal period (i.e., a third year) which period shall be considered part of the "Employment Term."  Notwithstanding anything herein to the contrary, in no event shall a notice of non-renewal of the Employment Term by either party or the termination of Executive's employment upon or following the subsequent expiration of the Employment Term constitute a termination of Executive's employment by the Company without Cause (as defined below) or by Executive for Good Reason (as defined below).

 

	
  

	
(b)

	
Executive Representation.  Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

 

	
2.

	
Position.

 

	
  

	
(a)

	
During the Employment Term, Executive shall serve as the Company’s Executive Chairman and shall principally perform Executive’s duties to the Company and its

  

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affiliates from the Company’s offices in the Orange County, California metropolitan area, subject to normal and customary travel requirements in the conduct of the Company’s business.  Executive shall have such authorities, duties and responsibilities as the Board of Directors of the Company (the "Board") may from time to time assign to him and will be responsible for overseeing implementation of the strategic direction of the Company, and for providing assistance to the President and Chief Executive Officer of the Company (the “CEO”) in the fulfillment of the CEO’s responsibilities, including, but not limited to, evaluating the performance of the Company’s executive management and maintaining and enhancing the Company’s relationship with its customers, suppliers, and others.

 

	
  

	
(b)

	
During the Employment Term, Executive will devote seventy-five percent (75%) of normal business hours and his best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation (including in an advisory capacity, consulting capacity, or otherwise) for compensation or otherwise which would conflict with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that Executive shall be permitted to (i) participate in such charitable and community-related services as Executive may choose, (ii) may serve as a Board member of not more than two other entities, subject to approval by the Board which approval shall not be unreasonably withheld, and (iii) may make or hold passive investments; provided further that in each case, and in the aggregate, such services do not materially interfere with his duties hereunder.

 

	
3.

	
Compensation.

 

	
  

	
(a)

	
During the Employment Term, the Company shall pay Executive a base salary (the “Base Salary”) at the annual rate of $262,500 (less applicable withholding taxes), payable in regular installments in accordance with the Company’s usual payment practices.  Executive shall be entitled to such increases in Executive’s Base Salary, if any, as may be determined from time to time in the sole discretion of the Board.

 

	
  

	
(b)

	
With respect to each full calendar year during the Employment Term, Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”) based on the achievement of specified performance goals, which shall be determined by the Board in its sole discretion within ninety (90) days following the commencement of each calendar year, with a targeted bonus equal to seventy-five percent (75%) of Executive’s then current Base Salary (the “Target Bonus”).  The Annual Bonus, if any, will be paid between January 1 and April 15 of the year following the year to which it relates.

 

	
  

	
(c)

	
During the Employment Term, Executive shall receive an automobile allowance and related benefits on the same terms and conditions as is provided to other senior officers of the Company, which currently includes a $600 monthly allowance, payable in regular installments in accordance with the Company’s

  

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usual payment practices, and reimbursement for gas expenses in accordance with Company policies.

 

	
4.

	
Equity.  During the Employment Term, Executive shall be eligible to participate in the Company's equity-based compensation plan, subject to the terms and conditions thereof.

 

	
5.

	
Employee Benefits.  During the Employment Term, Executive shall be provided, in accordance with the terms of the Company’s employee benefit plans as in effect from time to time, including, without limitation, health insurance, retirement benefits and fringe benefits (collectively “Employee Benefits”) on the same basis as those benefits are generally made available to other senior executives of the Company.  Executive shall be provided with annual vacation of sixteen (16) business days per each twelve (12) month period or additional weeks on a basis consistent with Company policy.

 

	
6.

	
Business Expenses.  During the Employment Term, reasonable, documented business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies. Executive shall be reimbursed for his legal expenses relating to the negotiation and execution of this Agreement in an amount not to exceed $2,500, in accordance with such Company policies.

 

	
7.

	
Termination.  The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least ninety (90) days advance written notice of any resignation of Executive’s employment.  Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

 

	
  

	
(a)

	
By the Company for Cause or by Executive’s Resignation Without Good Reason.

 

	
  

	
(i)

	
The Employment Term and Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) or by Executive’s resignation without Good Reason (as defined below).

 

	
  

	
(ii)

	
For purposes of this Agreement, “Cause” shall mean action by the Executive that constitutes misconduct, dishonesty, the failure to comply with specific directions of the Board that are consistent with the terms hereof (after having been given a reasonably detailed written notice of, and a period of twenty (20) days to cure, such misconduct or failure), a deliberate and premeditated act by Executive against the Company or its affiliates, Executive's commission of a felony, substance abuse or alcohol abuse which renders the Executive unfit to perform his duties, or any breach of the covenants set forth in Section 8 of this Agreement by Executive. Any voluntary termination of employment by the Executive in anticipation of an involuntary termination of the Executive’s employment by the Company for Cause shall be deemed to be a termination for Cause.

  

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(iii)

	
If Executive’s employment is terminated by the Company for Cause, or if Executive resigns without Good Reason, Executive shall be entitled to receive:

 

	
  

	
(A)

	
the Base Salary through the date of termination;

 

	
  

	
(B)

	
any Annual Bonus earned but unpaid as of the date of termination for any previously completed calendar year;

 

	
  

	
(C)

	
reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination;

 

	
  

	
(D)

	
such Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company; and

 

	
  

	
(E)

	
any additional amounts or benefits due under any applicable plan, program, agreement or arrangement of the Company or its affiliates or pursuant to applicable law (the amounts described in clauses (A) through (E) hereof being referred to as the “Accrued Rights”).  The Accrued Rights under this Section 7 shall in all events be paid in accordance with the Company’s normal payroll procedures, expense reimbursement procedures or plan terms, as applicable.

 

Following such termination of Executive’s employment by the Company for Cause or resignation by Executive without Good Reason, except as set forth in this Section 7(a), Executive shall have no further rights to any contract damages, other compensation or any other benefits under this Agreement.

 

	
  

	
(b)

	
Disability or Death.

 

	
  

	
(i)

	
The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death or if Executive (A) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (B) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan, or disability plan, covering employees of the Company or an affiliate of the Company (such incapacity is hereinafter referred to as “Disability”).

 

Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company.  If Executive and the Company cannot agree

  

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as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing.  The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement.

 

	
  

	
(ii)

	
Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive:

 

	
  

	
(A)

	
the Accrued Rights; and

 

	
  

	
(B)

	
the Annual Bonus, if any, that the Executive would have been entitled to receive pursuant to Section 3(b) hereof in respect of the year in which such termination occurs based upon the actual achievement of the performance goals, multiplied by a fraction the numerator of which is the number of days Executive is employed by the Company in such year and the denominator of which is the total number of days in such year, payable when such Annual Bonus would have otherwise been payable in accordance with Section 3(b) had the Executive’s employment not terminated (the "Pro-Rata Bonus").

 

Following Executive's termination of employment due to death or Disability, except as set forth in this Section 7(b), Executive or Executive’s estate (as the case may be) shall have no further rights to any contract damages, other compensation or any other benefits under this Agreement.

 

	
  

	
(c)

	
By the Company Without Cause or by Executive’s Resignation With Good Reason.

 

	
  

	
(i)

	
The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause or by Executive with Good Reason.

 

	
  

	
(ii)

	
For purposes of this Agreement, “Good Reason” shall mean:

 

	
  

	
(A)

	
Executive’s relocation by the Company outside Orange County, California;

 

	
  

	
(B)

	
a material diminution of Executive’s authority, duties or responsibilities as set forth in Section 2(a) hereof;

 

	
  

	
(C)

	
a  material reduction of Executive’s Base Salary (as increased from time to time) as set forth in Section 3(a) hereof;

 

	
  

	
(D)

	
the failure of the Company to provide or cause to be provided to Executive any of the Employee Benefits described in Section 5 hereof; or

  

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(E)

	
a requirement that Executive report to anyone other than the Board; provided that none of the events described in clauses (A) through (E) of this Section 7(c)(ii) shall constitute Good Reason unless Executive shall have notified the Company in writing describing the event which constitutes Good Reason within thirty (30) days of the initial occurrence of such event and then only if the Company shall have failed to cure such event within thirty (30) days after the Company’s receipt of such written notice.

 

	
  

	
(iii)

	
If Executive’s employment is terminated by the Company without Cause (and not by reason of death or Disability), or by Executive with Good Reason, Executive shall be entitled to receive:

 

	
  

	
(A)

	
the Accrued Rights;

 

	
  

	
(B)

	
the Pro-Rata Bonus; and

 

	
  

	
(C)

	
subject to Executive’s execution of a general release of claims in a form reasonably determined by the Company (the “Release”), the expiration of the applicable revocation period with respect to such Release within sixty (60) days following the date of termination and Executive’s continued compliance with the provisions of Section 8 and 9, continued payment of the Base Salary in accordance with the Company's normal payroll practices for the lesser of a period of twelve (12) months following the date of such termination or the remainder of the Employment Term, which shall commence on the sixtieth (60th) day following such termination (with the first payment equal to the cumulative amount that would have been paid in such initial sixty (60) day period); provided that aggregate amount described in this clause (C) shall be in lieu of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates.

 

Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation with Good Reason, except as set forth in this Section 7(c), Executive shall have no further rights to any contract damages, other compensation or any other benefits under this Agreement.

 

	
  

	
(d)

	
Notice of Termination.  Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11(g) hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

  

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(e)

	
Resignation as Officer or Director.  Upon a termination of Executive’s employment hereunder, unless requested otherwise by the Company, Executive shall resign each position (if any) that Executive then holds as an officer or director of the Company or of any of its affiliates.

 

	
8.

	
Non-Interference/Non-Solicitation.  Executive acknowledges and recognizes that in the course of performing services for the Company, Executive will have access to certain confidential and proprietary information of the Company and its affiliates that is extremely valuable to  the Company and its affiliates and is not known to the general public. Accordingly, Executive agrees as follows:

 

	
  

	
(a)

	
Executive agrees that during the term of employment and until the first anniversary of the date of termination of Executive's employment with the Company or any subsidiary of the Company, as the case may be (the "Restricted Period"), the Executive will not directly or indirectly, use any Company Confidential Information (as defined in Section 9) to interfere with business relationships (whether formed before or after the date of this Agreement) between the Company or any of its affiliates and customers, suppliers, partners, members or investors of the Company or its affiliates.

 

	
  

	
(b)

	
Executive further agrees that during the Restricted Period, Executive will not, directly or indirectly, (i) solicit or encourage any employee of the Company or its affiliates to leave the employment of the Company or its affiliates, or (ii) solicit or encourage to cease to work with the Company or its affiliates any consultant then under contract with the Company or its affiliates; provided, however, that general advertising not directed specifically at employees of the Company or any affiliate shall not be deemed to violate this Section 8(b).

 

	
  

	
(c)

	
It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that any restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.  Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

 

	
9.

	
Confidentiality.  Executive will not at any time (whether during or after Executive's employment with the Company) disclose or use for Executive's own benefit or purposes or the benefit or purposes of any other person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise other than the Company and any of its subsidiaries or affiliates, any trade secrets, information, data, or other confidential information relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, manufacturing

  

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processes, financing methods, plans, or the business and affairs of the Company generally, or of any subsidiary or affiliate of the Company (“Company Confidential Information”); provided that the foregoing shall not apply to information which is not unique to the Company or which is generally known to the industry or the public other than as a result of Executive's breach of this covenant; provided further that the foregoing shall not apply when Executive is required to divulge, disclose or make accessible such information by a court of competent jurisdiction or an individual duly appointed thereby, by any administrative body or legislative body (including a committee thereof) having supervisory authority over the business of the Company, or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order Executive to divulge, disclose or make accessible such information.  Executive agrees that upon termination of Executive's employment with the Company for any reason, he will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of the Company and its affiliates and/or containing any Company Confidential Information, except that he may retain personal notes, notebooks and diaries that do not contain Company Confidential Information of the type described in the preceding sentence.  Executive further agrees that he will not retain or use for Executive's account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company or its affiliates.

 

	
10.

	
Specific Performance. Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of Section 8 or Section 9 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

 

	
11.

	
Directors and Officers Liability Insurance.  During the Employment Term and at all relevant times, the Company shall maintain a directors’ and officers’ liability insurance policy of a commercially reasonable amount for a company of similar size and risk exposure as the Company.

 

	
12.

	
Miscellaneous.

 

	
  

	
(a)

	
Governing Law.  This Agreement  shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles thereof.

 

	
  

	
(b)

	
Entire Agreement/Amendments.  This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein.  This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect

  

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to the subject matter hereof which have been made by either party.  This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

 

	
  

	
(c)

	
No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

	
  

	
(d)

	
Severability.  In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

 

	
  

	
(e)

	
Assignment.  This Agreement shall not be assignable by Executive.  This Agreement may be assigned by the Company to a company which is a successor in interest to substantially all of the business operations of the Company.  Such assignment shall become effective when the Company notifies the Executive of such assignment or at such later date as may be specified in such notice.  Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such successor company, provided that any assignee expressly assumes the obligations, rights and privileges of this Agreement.

 

	
  

	
(f)

	
Successors Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees.

 

	
  

	
(g)

	
Notice.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

If to the Company:

El Pollo Loco, Inc.

3535 Harbor Boulevard, Suite 100

Costa Mesa, CA 92626

Attn: President

 

With a copy to:

Trimaran Capital Partners

1325 Avenue of the Americas, 34th Floor

New York, NY 10019

  

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Attn: Dean Kehler

 

If to Executive: To the most recent address of Executive set forth below or  in the personnel records of the Company.

 

	
  

	
(h)

	
Withholding Taxes.  The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

	
  

	
(i)

	
Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  Notwithstanding anything contained herein to the contrary, Executive shall not be considered to have terminated employment with the Company for purposes of any payments under this Agreement which are subject to Section 409A of the Code until the Executive has incurred a “separation from service” from the Company within the meaning of Section 409A of the Code.  Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A of the Code.  Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following an Executive’s separation from service shall instead be paid on the first business day after the date that is six months following the Executive’s separation from service (or, if earlier, the Executive’s date of death).  To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to Executive) during one year may not affect amounts reimbursable or provided in any subsequent year.  The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment.

 

	
  

	
(j)

	
Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

 

[signature page follows]

  

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

	  	
/s/ Samuel Borgese

	  	
SAMUEL BORGESE

	  	
Address:    

	
[redacted]

	  	  	
[redacted]

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	
CHICKEN ACQUISITION CORP.,

	  	
on behalf of its subsidiary:

	  	  
	  	  
	  	
EL POLLO LOCO, INC.

	  	  	  
	  	
By:   

	
/s/ Dean Kehler

	  	  	
Name:    

	
Dean Kehler

	  	  	
Title:

	
DirectorExhibit 10.1

                                AMENDMENT NO. 15
             TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
             -----------------------------------------------------

     THIS AMENDMENT NO. 15 (this "Agreement") is entered into as of December 23,
2010  by  and among BEST ENERGY SERVICES, INC (f/k/a HYBROOK RESOURCES CORP.), a
corporation organized under the laws of the State of Nevada ("Best"), BOB BEEMAN
DRILLING  COMPANY,  a  corporation organized under the laws of the State of Utah
("BBD")  and  BEST WELL SERVICE, INC., a corporation organized under the laws of
the  State  of  Kansas  ("BWS")  (Best,  BBD  and  BWS,  each  a "Borrower", and
collectively  "Borrowers"),  the  financial  institutions  party  hereto
(collectively, the "Lenders" and individually a "Lender") and PNC BANK, NATIONAL
ASSOCIATION  ("PNC"), as agent for Lenders (PNC, in such capacity, the "Agent").

                                   BACKGROUND
                                   ----------

Borrowers,  Lenders and Agent are parties to that certain Revolving Credit, Term
Loan and Security Agreement dated as of February 14, 2008 (as amended, restated,
supplemented  or  otherwise  modified  from  time to time, the "Loan Agreement")
pursuant  to  which  Agent  and Lenders provide Borrowers with certain financial
accommodations.

Borrowers  have requested that Agent and Lenders amend certain provisions of the
Loan Agreement as hereafter provided, and Agent and Lenders are willing to do so
on  the  terms  and  conditions  hereafter  set  forth.

NOW,  THEREFORE,  in  consideration  of  any  loan or advance or grant of credit
heretfore  or  hereafter  made  to  or  for the account of Borrowers by Agent or
Lenders,  and  for  other  good  and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1.     Definitions.  All  capitalized  terms  not  otherwise  defined or amended
       -----------
herein  shall  have  the  meanings  given  to  them  in  the  Loan  Agreement.

2.     Reservation  of  Rights: Borrowers acknowledge that the Events of Default
       -----------------------
set  forth  on Schedule I hereto (the "Existing Defaults") have occurred and are
               ----------
continuing  under  the  Loan  Agreement.

(a)     As  a  result of the Existing Defaults, Agent has the immediate right to
exercise  its  rights and remedies under the Loan Agreement, the Other Documents
or  at  law.

(b)     To the extent Agent makes any additional Advances after the date hereof,
such  Advances shall not constitute either a waiver of, nor agreement to forbear
by  Agent with respect to the Existing Defaults or any future violation or Event
of  Default  under the Loan Agreement or the Other Documents, including, without
limitation,  the  Existing Default.  No such additional Advances by Agent shall,
directly  or  indirectly,  in any way whatsoever, impair, prejudice or otherwise
adversely effect Agent's right at any time and from time to time to exercise any
right,  privilege  or  remedy  in  connection with the Loan Agreement or related
documents  or  amend  or alter the provisions of the Loan Agreement or the Other
Documents  or  constitute  a  course  of dealing or other basis for altering any
Obligation of Borrowers or any other Person or any right, privilege or remedy of
Agent  under  the  Loan  Agreement  or  the  Other  Documents.

(c)     Although Agent is not presently taking any immediate action with respect
to  the  Existing  Defaults except as set forth above, Agent hereby reserves all
its  rights  and  remedies  under  the  Loan  Agreement, the Other Documents and
applicable law, and its election not to exercise any such right or remedy at the

                                       1

<PAGE>
present  time  shall  not  (a)  preclude  Agent from ceasing at any time to make
Advances,  (b)  limit  in  any manner whatsoever Borrowers' obligation to comply
with,  and Agent's right to insist on Borrowers' compliance with, each and every
term of the Loan Agreement and the Other Documents or (c) constitute a waiver of
any  Event  of  Default or any right or remedy available to Agent under the Loan
Agreement,  the  Other  Documents  or applicable law, and Agent hereby expressly
reserves  its  rights  with  respect  to  the  same.

(d)     No  failure  or  delay  on  the part of Agent in exercising any right or
remedy  under  the Loan Agreement and no course of dealing between Borrowers and
Agent shall operate as a waiver of any such right or remedy nor shall any single
or partial exercise of any right or remedy under the Loan Agreement preclude any
other  or  further exercise thereof or the exercise of any other right or remedy
under  the  Loan  Agreement.  Agent  expressly  reserves  all  of its rights and
remedies  under  the  Loan  Agreement.

3.     Amendments  to  Loan Agreement.  Subject to the satisfaction of Section 4
       ------------------------------
below,  the  Loan  Agreement  is  hereby  amended  as  follows:

(a)     The definition of Special Advance Amount set forth in Section 1.1 of the
Loan  Agreement  is  hereby  amended to read in its entirety as set forth below:

"Special Advance Amount" shall mean (w) $1,750,000, prior to December 21, 2010,
 ----------------------
(x) $1,875,000 from December 21, 2010 through and including January 14, 2011,
(y)  $1,750,000 from January 15, 2001 through and including March 30, 2011 and
(z) $0 on and after March 31, 2011.

     (b)     The  Borrowers covenant and agree that the incremental availability
created  by  the  increase  in  the  Special  Advance  Amount  for  the  period
contemplated by this Agreement will be used solely for the purpose of mobilizing
to  rigs  to the Eagle Ford in South Texas and, if requested by Agent, Borrowers
will provide a certification to Agent that the incremental availability is being
used  for  such  purpose.

4.     Conditions  of Effectiveness.  This Agreement shall become effective when
       ----------------------------
Agent  shall  have  received:

(a)     four  (4)  copies of this Agreement executed by the Required Lenders and
each  Borrower;

(b)     a  common  stock  purchase warrant for 250,000 shares of common stock of
Best  at an exercise price of $0.10 per share in form and substance satisfactory
to  Agent  and  its  counsel;

(c)     such other certificates, instruments, documents, agreements and opinions
of counsel as may be required by Agent or its counsel, each of which shall be in
form  and  substance  satisfactory  to  Agent  and  its  counsel.

5.     Representations,  Warranties  and  Covenants.  Each  Borrower  hereby
       --------------------------------------------
represents,  warrants  and  covenants  as  follows:

(a)     This  Agreement  and  the  Loan  Agreement  constitute  legal, valid and
binding  obligations  of such Borrower and are enforceable against such Borrower
in  accordance  with  their  respective  terms.

                                       2
<PAGE>
(b)     Upon the effectiveness of this Agreement, each Borrower hereby reaffirms
all  covenants, representations and warranties made in the Loan Agreement to the
extent  the  same  are  not  amended  or  waived hereby and agrees that all such
covenants, representations and warranties shall be deemed to have been remade as
of  the  effective  date  of  this  Agreement.

(c)     The  execution, delivery and performance of this Agreement and all other
documents  in  connection  therewith  has  been duly authorized by all necessary
corporate  action,  and  does not contravene, violate or cause the breach of any
agreement,  judgment,  order,  law  or  regulation  applicable  to any Borrower.

(d)     No  Event  of Default or Default has occurred and is continuing or would
exist  after  giving effect to this Agreement (other than the Existing Default).

(e)     No  Borrower has any defense, counterclaim or offset with respect to the
Loan  Agreement  or  the  Obligations.

6.     Effect  on  the  Loan  Agreement.
       --------------------------------

(a)     Upon  the  effectiveness  of  this Agreement, each reference in the Loan
Agreement  to "this Agreement," "hereunder," "hereof," "herein" or words of like
import  shall  mean  and be a reference to the Loan Agreement as amended hereby.
Except  as  specifically  amended  herein,  the  Loan  Agreement,  and all other
documents,  instruments  and  agreements executed and/or delivered in connection
therewith,  shall  remain  in full force and effect, and are hereby ratified and
confirmed.  This Agreement shall constitute an "Other Document" for all purposes
under  the  Loan  Agreement.

(b)     Except  as  expressly  provided  herein,  the  execution,  delivery  and
effectiveness  of  this  Agreement  shall  not operate as a waiver of any right,
power or remedy of Agent or any Lender, nor constitute a waiver of any provision
of  the  Loan  Agreement,  or  any  other  documents,  instruments or agreements
executed  and/or  delivered  under  or  in  connection  therewith.

     7.     Release.  The  Borrowers  hereby  acknowledge  and  agree that:  (a)
            -------
neither  they  nor  any  of  their  Affiliates have any claim or cause of action
against  Agent  or  any  Lender  (or  any of Agent's or any Lender's Affiliates,
officers,  directors, employees, attorneys, consultants or agents) and (b) Agent
and  each  Lender  have  heretofore properly performed and satisfied in a timely
manner  all  of  their  respective  obligations  to the Borrowers under the Loan
Agreement  and  the  Other  Documents.  Notwithstanding the foregoing, Agent and
each Lender wish (and the Borrowers agree) to eliminate any possibility that any
past  conditions,  acts,  omissions,  events  or  circumstances  would impair or
otherwise  adversely  affect  any of Agent's or such Lender's rights, interests,
security  and/or  remedies  under  the  Loan  Agreement and the Other Documents.
Accordingly,  for  and  in  consideration  of  the  agreements contained in this
Agreement  and  other good and valuable consideration, each Borrower (for itself
and  its  Affiliates  and  the successors, assigns, heirs and representatives of
each  of  the  foregoing)  (each a "Releasor" and collectively, the "Releasors")
does  hereby fully, finally, unconditionally and irrevocably release and forever
discharge  Agent, each Lender and each of their respective Affiliates, officers,
directors, employees, attorneys, consultants and agents (each a "Released Party"
and  collectively,  the  "Released  Parties")  from  any  and all debts, claims,
obligations,  damages,  costs,  attorneys'  fees,  suits,  demands, liabilities,
actions,  proceedings  and  causes  of  action,  in  each case, whether known or
unknown,  contingent  or  fixed,  direct  or indirect, and of whatever nature or
description,  and  whether in law or in equity, under contract, tort, statute or
otherwise,  which any Releasor has heretofore had or now or hereafter can, shall
or  may  have against any Released Party by reason of any act, omission or thing
whatsoever done or omitted to be done on or prior to the date hereof arising out
of,  connected  with or related in any way to this Agreement, the Loan Agreement
or  any  Other  Document,  or any act, event or transaction related or attendant

                                       3
<PAGE>
thereto,  or  Agent's  or  any  Lender's  agreements  contained  therein, or the
possession,  use,  operation  or  control  of  any  of  the assets of agreements
contained  therein,  or  the possession, use, operation or control of any of the
assets of the Borrowers, or the making of any advance, or the management of such
advance  or  the  Collateral.

8.     Governing  Law.  This  Agreement  shall  be binding upon and inure to the
       --------------
benefit  of  the  parties hereto and their respective successors and assigns and
shall  be  governed by and construed in accordance with the laws of the State of
New  York  (other  than  those  conflict  of  law  rules that would defer to the
substantive  law  of  another  jurisdiction).

9.     Cost  and Expenses.   Borrowers hereby agree to pay the Agent, on demand,
       ------------------
all  costs  and  reasonable  expenses  (including reasonable attorneys' fees and
legal  expenses)  incurred in connection with this Agreement and any instruments
or  documents  contemplated  hereunder.

10.     Headings.  Section  headings  in  this Agreement are included herein for
        --------
convenience  of reference only and shall not constitute a part of this Agreement
for  any  other  purpose.

11.     Counterparts;  Facsimile  Signatures.  This Agreement may be executed by
        ------------------------------------
the  parties hereto in one or more counterparts of the entire document or of the
signature  pages  hereto,  each  of which shall be deemed an original and all of
which taken together shall constitute one and the same agreement.  Any signature
received  by  facsimile  or  electronic transmission shall be deemed an original
signature  hereto.

                  [Remainder of page intentionally left blank]

                                       4
<PAGE>
     IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year  first  written  above.

                                        PNC BANK, NATIONAL ASSOCIATION,
                                        as Lender and as Agent

                                        By:__________________________
                                        Name:
                                        Title:

                                        BEST ENERGY SERVICES, INC.

                                        By:__________________________
                                        Name:
                                        Title:

                                        BOB BEEMAN DRILLING COMPANY

                                        By:__________________________
                                        Name:
                                        Title:

                                        BEST WELL SERVICE, INC.

                                        By:__________________________
                                        Name:
                                        Title:

                                       5
<PAGE>
SCHEDULE I

                                Existing Default

     1.     An  Event  of  Default  as a result of the Borrowers' failure to pay
certain  taxes  as  required  pursuant  to  Section  4.13 of the Loan Agreement.

     2.     An Event of Default as a result of the imposition of tax Liens as
evidenced by (i) that certain Tax Warrant of the Kansas Department of Revenue
and (ii) the Notices of Federal Tax Lien received from the Internal Revenue
Service and attached hereto as Exhibit A.
                               ---------

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