Document:

EX-10.2

 Exhibit 10.2 
 SECURITY AGREEMENT 
 THIS SECURITY AGREEMENT
(the “Security Agreement”) is made and entered into this 11th day of May 2012, by and between DAWSON GEOPHYSICAL COMPANY, a Texas Corporation, whose address is 508 West Wall Street, Suite 800, Midland, Texas 79701 (the “Debtor”), and
WESTERN NATIONAL BANK, a national banking association, whose address is 508 West Wall Street Suite 1100, Midland, Texas 79701 (the “Secured Party”). 
 NOTICE IS TAKEN OF THE FOLLOWING: 
  

	A.	Reference is made to that certain Loan Agreement, of even date herewith, (the “Loan Agreement”) by and between Debtor, as Borrower, and the Secured
Party, as Lender. Pursuant to the terms of the Loan Agreement, the Secured Party has agreed to advance certain loans to Debtor, from time to time (collectively, the “Loans”). 

 

	B.	The Loans are, or will be, evidenced by: (i) that certain Revolving Line of Credit Note, dated as of June 2, 2011, in the original principal amount of Twenty
Million and No/100 Dollars ($20,000,000.00), executed by the Debtor, as Maker, and payable to the order of the Secured Party, as Payee, together with any and all renewals, extension for any period, increases and rearrangements thereof;
(ii) that certain Term Note, dated as of June 30, 2011, in the original principal amount of Sixteen Million Four Hundred Twenty-Six Thousand Six Hundred Eighty and Six/100 Dollars ($16,426,680.06), executed by the Debtor, as Maker, and
payable to the order of the Secured Party, as Payee (the “First Term Note”, together with any and all renewals, extension for any period, increases and rearrangements thereof; and (iii) that certain Multiple Advance Term Note,
dated as of May 11, 2012, in the original principal amount of Fifteen Million and No/100 Dollars ($15,000,000.00), executed by the Debtor, as Maker, and payable to the order of the Secured Party, as Payee, (the “Second Term
Note”) together with any and all renewals, extension for any period, increases and rearrangements thereof. Collectively, the promissory notes described in (i) and (ii) are referred to herein as the “Notes”. The
Loan Agreement, the Notes, and all documents executed by the parties simultaneously therewith, as any of the same may be amended, extended or replaced from time to time are collectively referred to herein as the “Credit Documents.”
Capitalized terms not otherwise defined herein are used with the same meanings as in the Credit Documents. 

  

	C.	To induce Secured Party to extend such credit, and in support of its performance under the Loan Agreement and the Notes, Debtor has agreed to pledge and to grant to
Secured Party a security interest in and hen upon certain property of Debtor described more particularly herein. 

NOW, THEREFORE, for and in consideration of the above Recitals and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Debtor hereby agrees as follows: 

  
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 AGREEMENT 

 

	1.	Grant of Security Interest 

Debtor hereby pledges and grants to Secured Party a security interest in the property described in paragraph 2 (collectively and
severally, the “Collateral”) to secure payment and performance of the obligations described in paragraph 3 (collectively and severally, the “Obligations”). 

 

	2.	Collateral 

 The
Collateral shall consist of all of the Debtor’s interest in the following: 
 (i) All of Debtor’s Accounts and
Equipment, as those terms are defined under the terms of the Credit Documents and the Uniform Commercial Code, as adopted by the State of Texas, in effect as of the date of this Agreement; (ii) any related or additional property from time to
time delivered to or deposited with Secured Party by or for the account of Debtor expressly securing the Obligations; (iii) all proceeds, products, replacements, additions to, substitutions for, accessions of, and property necessary for the
operation of any of the foregoing, including, without limitation, insurance payable as a result of loss or damage to the foregoing property and any proceeds thereunder, refunds or unearned premiums of any such insurance policy, and claims against
third parties; (iv) all books and records related to any of the foregoing, including without limitation any and all books of account, customer lists and other records relating in any way to the accounts receivable; and (v) any of the
aforementioned collateral hereafter acquired by Debtor as well as Collateral which Debtor now owns or in which Debtor otherwise has rights related to any property referred to in this Section 2. 

 

	3.	Obligations 

 The
Obligations secured by this Security Agreement shall consist of any and all debts, obligations, and liabilities of Debtor to Secured Party arising out of or related to the Credit Documents (whether principal, interest, fees, or otherwise, whether
now existing or thereafter arising, whether voluntary or involuntary, whether or not jointly owed with others, whether direct or indirect, absolute or contingent, contractual or tortious, liquidated or unliquidated, arising by operation of law, or
otherwise, whether or not from time to time decreased or extinguished and later increased, created or incurred, and whether or not extended, modified, rearranged, restructured, refinanced, or replaced, including without limitation, modifications to
interest rates or other payment terms of such debts, obligations, or liabilities). 

  
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	4.	Representations and Warranties 

 In addition to any representations and warranties of Debtor set forth in the Credit Documents, which are incorporated herein by this reference, Debtor hereby represents and warrants that: 

 

	 	a.	Authority. It has authority, and has completed all proceedings and obtained all approvals and consents necessary, to execute, deliver, and perform this Security
Agreement and the transactions contemplated hereby. 

  

	 	b.	No Default or Lien. Such execution, delivery, and performance will not contravene, or constitute a default under or result in a lien upon any property of Debtor
pursuant to any applicable law or regulation or any contract, agreement, judgment, order, decree, or other instrument binding upon or affecting Debtor. 

  

	 	c.	Enforceability. This Security Agreement constitutes a legal, valid, and binding obligation of Debtor, enforceable in accordance with its terms (except as
enforceability may be affected by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditor’s rights), and this Security Agreement grants to Secured Party a valid, first-priority perfected and enforceable lien on the
Collateral. 

  

	 	d.	No Litigation. There is no action, suit or proceeding pending or, to the best knowledge of Debtor after reasonable investigation, threatened against Debtor that
might adversely affect its property or financial condition in any material respect. 

  

	 	e.	Ownership of Collateral. Debtor is the sole owner of and has good and marketable title to the Collateral (or, in the case of after-acquired Collateral, at the
time the Debtor acquires rights in the Collateral, will be the sole owner thereof) and is the record and beneficial owner of any such Collateral. 

  

	 	f.	Priority. Except for security interests in favor of Secured Party, no person has (or, in the case of after-acquired Collateral, at the time Debtor acquires
rights therein, will have) any right, title, claim, or interest (by way of security interest or other lien or charge) in, against or to the Collateral. 

  

	 	g.	Accuracy of Information. All information heretofore, herein or hereafter supplied to Secured Party by or on behalf of Debtor with respect to the Collateral is
true and correct. 

  

	 	h.	Delivery of Documents. Debtor has delivered to Secured Party all instruments, documents, chattel paper, and other items of Collateral in which a security
interest is or may be perfected by possession, the certificate of title with respect to each motor vehicle, if any, included in the Collateral, and any certificated Pledged Shares together with such additional writings, including, without
limitation, assignments and stock powers, with respect thereto as Secured Party shall request. 

  
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	 	i.	Exclusion of Certain Collateral. Unless otherwise agreed by Secured Party, the Collateral does not include any aircraft, watercraft or vessels, railroad cars,
railroad equipment locomotives or other rolling stock intended for a use related to interstate commerce, trade names, trademarks, service marks, mask works, copyrights, patents, fixtures or uncertificated securities. 

 

	 	j.	Enforceability Against Account Debtors. Each account, contract right, item of chattel paper, instrument or any other right to the payment of money constituting
Collateral is genuine and enforceable in accordance with its terms against the party obligated to pay the same (an Account Debtor), which terms have not been modified or waived in any respect or to any extent. 

 

	 	k.	Amount Due From Account Debtors. Any amount represented by Debtor to Secured Party as owing by any Account Debtor is the correct amount actually and
unconditionally owing by such Account Debtor. 

  

	 	l.	No Account Debtor Defense. No Account Debtor has any defense, set off, claim, or counterclaim against Debtor that can be asserted against Secured Party, whether
in any proceeding to enforce Secured Party’s rights in the Collateral, or otherwise. 

  

	5.	Covenants and Agreements of Debtor 

 In addition to all covenants and agreements of Debtor set forth in the Credit Documents, which are incorporated herein by this reference, Debtor hereby agrees: 

 

	 	a.	Preservation of Collateral. To do all acts that may be necessary to maintain, preserve, and protect the Collateral. 

 

	 	b.	Use of Collateral. Not to use or permit any Collateral to be used unlawfully or in violation of any provision of this Security Agreement, any other agreement
with Secured Party related hereto or any applicable statute, regulation, or ordinance or any policy of insurance covering the Collateral. 

  

	 	c.	Payment of Taxes. To pay promptly when due all taxes, assessments, charges, encumbrances and liens now or hereafter imposed upon or affecting any Collateral.

  

	 	d.	Defense of Litigation. To appear in and defend any action or proceeding that may affect its title to or Secured Party’s interest in the Collateral.

  
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	 	e.	Possession of Collateral. Not to surrender or lose possession of (other than to Secured Party), sell, encumber, lease, rent, or otherwise dispose of or transfer
any Collateral or right or interest therein except as hereinafter provided, and to keep the Collateral free of all levies and security interests or other liens or charges except those approved in writing by Secured Party. 

 

	 	f.	Compliance with Law. To comply with all laws, regulations, and ordinances relating to the possession, operation, maintenance, and control of the Collateral.

  

	 	g.	Standard of Care by Secured Party. That such care as Secured Party gives to the safekeeping of its own property of like kind shall constitute reasonable care of
the Collateral when in Secured Party’s possession. 

  

	 	h.	Maintenance of Records. To keep separate, accurate, and complete records of the Collateral and to provide Secured Party with such records and such other reports
and information relating to the Collateral as Secured Party may request from time to time. 

  

	 	i.	Further Assurances. To procure, execute, and deliver from time to time any endorsements, notifications, registrations, assignments, financing statements,
certificates of title, ship mortgages, aircraft mortgages, copyright mortgages assignments or mortgages of patents, mortgages of mask works, mortgages for filing pursuant to the Interstate Commerce Act, and other writings deemed necessary or
appropriate by Secured Party to perfect, maintain, and protect its security interest in the Collateral hereunder and the priority thereof; and to take such other actions as Secured Party may request to protect the value of the collateral and of
Secured Party’s security interest in the Collateral, including, without limitation, provision of assurances from third parties regarding Secured Party’s access to, right to foreclose on or sell, Collateral and right to realize the
practical benefits of such foreclosure or sale. 

  

	 	j.	Payment of Secured Party’s Costs and Expenses. To reimburse Secured Party upon demand for any costs and expenses, including, without limitation, attorney
fees and disbursements, Secured Party may incur in preparing the Credit Documents and while exercising any right, power, or remedy provided by this Security Agreement or by law, all of which costs and expenses are included in the Obligations.

  

	 	k.	Notification Regarding Certain Types of Collateral. To promptly notify Secured Party of inclusion in the Collateral after the date hereof of any aircraft,
watercraft or vessels, railroad cars, railroad equipment, locomotives or other rolling stock intended for a use related to interstate commerce, trade names, trademarks, service marks, mask works, copyrights, patents, fixtures, or uncertificated
securities. 

  
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	 	l.	Notice of Changes. To give Secured Party thirty (30) days prior written notice of any change in Debtor’s residence or chief place of business or legal
name or tradename(s) or style(s) set forth in the penultimate paragraph of this Security Agreement. 

  

	 	m.	Location of Records. To keep the records concerning the collateral at the location(s) set forth in the penultimate paragraph of this Security Agreement and not
to remove such records from such location(s) without the prior written consent of the Secured Party. 

  

	 	n.	Purchase Money Agreement. If Secured Party gives value to enable Debtor to acquire rights in or the use of any Collateral, to use such value for such purpose.

  

	6.	Authorized Action by Secured Party 

 Debtor hereby agrees that from time to time, without presentment, notice or demand, and without affecting or impairing in any way the rights of Secured Party with respect to the Collateral, the
obligations of the Debtor hereunder or the Obligations, Secured Party may, but shall not be obligated to and shall incur no liability to Debtor or any third party for failure to take any action which Debtor is obligated by this Security Agreement to
do and to exercise such rights and powers as Debtor might exercise with respect to the Collateral, and Debtor hereby irrevocably appoints Secured Party as its attorney-in-fact to exercise such rights and powers, including without limitation, to
(a) file a financing statement describing the Collateral, without the signature of either the Debtor or the Secured Party; (b) collect by legal proceedings or otherwise and indorse, receive and receipt for all dividends, interest,
payments, proceeds, and other sums and property now or hereafter payable on or on account of the Collateral; (c) enter into any extension, reorganization, deposit, merger, consolidation, or other agreement pertaining to, or deposit, surrender,
accept, hold, or apply other property in exchange for the Collateral; (d) insure, process, and preserve the Collateral; (e) transfer the Collateral to its own or its nominee’s name; (f) make any compromise or settlement, and take
any action it deems advisable, with respect to the Collateral; and (g) notify any Account Debtor on any Collateral to make payment directly to Secured Party. 
  

	7.	Default 

 A default under
this Security Agreement shall be deemed to exist upon the occurrence of any of the following (an Event of Default): 
  

	 	a.	Default in Payment. Any of the Obligations shall not be paid in accordance with the terms of the Credit Documents. 

 

	 	b.	 Default under Credit Documents. Debtor shall fail to observe any other term or condition of the Credit Documents or there shall otherwise occur
any event which would permit Secured Party to accelerate amounts outstanding thereunder or the 

  
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Borrower shall fail to make any payment or there shall otherwise occur any event which would permit Secured Party to accelerate amounts outstanding to Borrower which are guaranteed by Debtor
pursuant to the Credit Documents. 

  

	8.	Remedies 

 Upon the
occurrence of any such Event of Default, Secured Party may, at its option, and without notice to or demand on Debtor and in addition to all rights and remedies available to Secured Party under the Credit Documents, at law, in equity, or otherwise,
do any one or more of the following: 
  

	 	a.	General Enforcement. Foreclose or otherwise enforce Secured Party’s security interest in any manner permitted by law, or provided for in this Security
Agreement. 

  

	 	b.	Sale, etc. Sell, lease, or otherwise dispose of any Collateral at one or more public or private sales at Secured Party’s place of business or any other
place or places, including, without limitation, any broker’s board or securities exchange, whether or not such Collateral is present at the place of sale, for cash or credit or future delivery, on such terms and in such manner as Secured Party
may determine. 

  

	 	c.	Costs of Remedies. Recover from Debtor all costs and expenses, including, without limitation, reasonable attorney fees, incurred or paid by Secured Party in
exercising any right power, or remedy provided by this Security Agreement. 

  

	 	d.	Manner of Sale of Collateral. Debtor shall be given ten (10) business days prior notice of the time and place of any public sale or of the time after which
any private sale or other intended disposition of Collateral is to be made, which notice Debtor hereby agrees shall be deemed reasonable notice thereof. 

  

	 	e.	Delivery to and Rights of Purchaser. Upon any sale or other disposition pursuant to this Security Agreement, Secured Party shall have the right to deliver,
assign, and transfer to the purchaser thereof the Collateral or portion thereof so sold or disposed of. Each purchaser at any such sale or other disposition (including Secured Party) shall hold the Collateral free from any claim or right of whatever
kind, including any equity or right of redemption of Debtor and Debtor specifically waives (to the extent permitted by law) all rights of redemption, stay or appraisal which it has or may have under any rule of law or statute now existing or
hereafter adopted. 

  

	9.	Cumulative Rights 

 The
rights, powers, and remedies of Secured Party under this Security Agreement shall be in addition to all rights, powers, and remedies given to Secured Party by virtue of any statute or rule of law, the Credit Documents or any other agreement, all of
which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Secured Party’s security interest in the Collateral. 

  
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	10.	Waiver 

 Any waiver,
forbearance or failure or delay by Secured Party in exercising any right, power, or remedy shall not preclude the further exercise thereof, and every right, power, or remedy of Secured Party shall continue in full force and effect until such right
power or remedy is specifically waived in a writing executed by Secured Party. Debtor waives any right to require Secured Party to proceed against any person or to exhaust any Collateral or to pursue any remedy in Secured Party’s power.

  

	11.	Setoff 

 Debtor agrees
that Secured Party may exercise its rights of setoff with respect to the Obligations in the same manner as if the Obligations were unsecured. 
  

	12.	Binding Upon Successors 

All rights of Secured Party under this Security Agreement shall inure to the benefit of its successors and assigns, and all obligations of
Debtor shall bind its heirs, executors, administrators, successors, and assigns. 
  

	13.	Entire Agreement; Severability 

 This Security Agreement contains the entire security agreement between Secured Party and Debtor. If any of the provisions of this Security Agreement shall be held invalid or unenforceable, this Security
Agreement shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly. 
  

	14.	Choice of Law 

 This
Security Agreement shall be construed in accordance with and governed by the laws of Texas, without giving effect to choice of law rules, and, where applicable and except as otherwise defined herein, terms used herein shall have the meanings given
them in the Uniform Commercial Code of such state. 
  

	15.	Amendment 

 This Security
Agreement may not be amended or modified except by a writing signed by each of the parties hereto. 

  
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	16.	Residence; Collateral Location Records 

 Debtor represents that its residence or chief place of business is set forth below its signature hereto; and that, except as otherwise disclosed to Secured Party in writing prior to the date hereof, the
Collateral and Debtor’s records concerning the Collateral are located at that address. 
  

	17.	Addresses for Notices 

All demands, notices, and other communications to Debtor or Secured Party provided for hereunder shall be in writing or by telephone,
promptly confirmed in writing, mailed, delivered, or sent by telefacsimile, addressed or sent to it to the address or telefacsimile number, as the case may be, of Debtor or Secured Party set forth beneath such party’s signature below, or to
such other address as shall be designated by a party in a written notice to the other party. All such demands, notices, and other communications shall, when mailed or sent by telefacsimile, be effective when deposited in the mails, delivered or so
sent, as the case may be, addressed as aforesaid. 
 EXECUTED this 11th day of May 2012. 

 

							
		 		 	DEBTOR:
			
	 Address:
 508 West Wall Street,
Suite 800
 Midland, Texas 79701
	 		 	DAWSON GEOPHYSICAL COMPANY
				
		 		 	By:	 	 /s/ Stephen C. Jumper

		 		 		 	Stephen C. Jumper
		 		 		 	President
				
		 		 	By:	 	 /s/ Christina W. Hagan

		 		 		 	Christina W. Hagan
		 		 		 	Secretary
			
		 		 	 SECURED PARTY:
  

WESTERN NATIONAL BANK

				
	 508 West Wall Street, Suite 1100

Midland, Texas 79701
	 		 		 	
				
		 		 	By:	 	 /s/ Marshall N. Vicknair

		 		 		 	Marshall N. Vicknair
		 		 		 	Senior Vice President

  
 9Form of Change of Control Severance Agreement

 Exhibit 10.1 
 [Date] 
 [Name and Address] 
 Dear [Name of Employee]: 
 This letter is to confirm our discussion regarding the
separation or severance benefits to be provided to you. 
 In the event that (1) Zhone terminates your
employment without “Cause” or (2) following a “Change in Control” you terminate your employment for “Good Reason” (as such terms are defined below), then Zhone will pay you the greater of (i)
$            1 or (ii) your then current annual salary in a lump sum as severance in exchange for a standard release of claims. You will not receive the severance if you do not sign the release of claims within 50
days following your termination, or you revoke the release. The severance will be paid on the 8th day following the effective date of the release. You also will not be eligible for the severance payment if you voluntarily terminate your employment prior to a Change in Control for any reason, or
following a Change in Control other than for Good Reason, or you are terminated for Cause. 
 For this purpose,
“Cause” and “Change in Control” shall have the respective meanings set forth in the company’s 2001 Stock Incentive Plan, as amended. “Good Reason” shall mean (i) a diminution in your authority, duties or
responsibilities from those in effect immediately prior to the Change in Control, including an adverse change in your reporting relationship or a change in the named individual to whom you report, (ii) a reduction of your total compensation
opportunities, (iii) a diminution in the authority, duties or responsibilities of the named individual to whom you report, including a requirement that you report to someone other than the Chief Executive Officer of Zhone or someone who reports
directly to the Board of Directors of Zhone, or (iv) a requirement that you relocate your principal place of employment by more than 50 miles. You must provide notice to Zhone of the existence of one or more of the conditions listed above,
within a period not to exceed 90 days of the initial existence of such condition, and Zhone shall have a period of 10 days to remedy the condition. If Zhone is unable to remedy such condition within the 10-day cure period, you may terminate your
employment for Good Reason. For purposes of the definition of Good 
  

	1 	 Amount will be equal to 2008 annual base salary prior to giving effect to any voluntary salary reduction. 

 Reason, references to Zhone shall include any successor thereto in the Change in Control, or if Zhone or its
successor following such Change in Control is a subsidiary, then Zhone shall mean the ultimate parent company. 
 This letter
and the agreements contained herein shall be binding upon and shall by their terms automatically be assigned to any successor in interest to Zhone in a Change in Control, including but not limited to any entity that acquires substantially all of the
assets, capital stock or operations of Zhone. 
 As is our normal practice, your employment with us will remain voluntarily
at-will and for no specified period. Of course you are always free to resign at any time, for any reason, or for no reason, as you deem appropriate. We will have a similar right and may conclude our employment relationship with you at any time, with
or without Cause. 
 The terms stated in this letter, the proprietary rights and stock option agreements you previously executed
constitute the entire agreements between you and Zhone regarding the terms and conditions of your employment, and they supersede all prior negotiations, representations or agreements between you and Zhone. 

I want to thank all of you for your hard work and contributions in making Zhone successful. With your continued commitment, our best days
are ahead of us. 
 Sincerely, 
 Mory
Ejabat 
 Chief Executive Officer 
 I
AGREE TO AND ACCEPT TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT. 
  

							
	  
	 		  	  
	  	
	Executive Signature	 		  	Date	  	

 Schedule to Exhibit 10.1: In accordance with Instruction 2 to Item 601 of Regulation S-K, the Company
has filed only the form of Change in Control Severance Agreement as the agreements are substantially identical in all material respects, except as to the parties thereto, the dates of execution and the minimum severance amount (which in each case
will be equal to the employee’s 2008 annual base salary prior to giving effect to any voluntary salary reduction). The Company agrees to furnish the agreements at the request of the SEC. The Form of Change in Control Severance Agreement was
entered into on August 9, 2012 with the following officers, with their respective titles listed below: 
  

			
	 Name
	  	Title
	 Kirk Misaka
	  	Chief Financial Officer, Treasurer and Secretary
	 David Misunas
	  	Vice President, Business Development

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