Common use of Collateral Security Clause in Contracts

Collateral Security. To secure the performance by Borrowers of their obligations hereunder, and under the Notes, the Guaranty and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior to the execution of this Agreement and the Notes, grant and assign to Agent for the ratable benefit of the Banks a first and prior Lien on (i) the Rigs, together with an assignment of the insurance covering such Rigs, the charter hire, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Liens in the Collateral or any part thereof. In addition to the granting of the first and prior Liens referred to above, Borrowers shall also grant to the Banks a negative pledge on all of their other assets.

Collateral Security. To secure 3.1 As Collateral Security for the repayment of such loan with interest by the BORROWER to the LENDER and for the performance by Borrowers the BORROWER of their obligations hereunder, and under all the Notesterms of this agreement, the Guaranty BORROWER shall execute, acknowledge and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior deliver to the execution LENDER, one or more pledge agreements substantially in the form of this Agreement Exhibit "B" annexed hereto and the Notes, grant simultaneously deliver to LENDER Federal Housing Administration or Veterans Administration first mortgage promissory notes and assign to Agent for the ratable benefit of the Banks mortgages on real estate improved by a first and prior Lien on (i) the Rigscompleted one-family dwelling, together with an assignment of their corresponding complementary documents listed and set forth in Exhibit "C" hereof, or conventional first mortgages as indicated in Article 2.3 above. 3.2 BORROWER covenants that the insurance covering such Rigsinstruments creating LENDER'S security interest in the Collateral shall be in a form satisfactory to LENDER, in the charter hireLENDER'S absolute discretion and that it shall make, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are execute and/or deliver from time to time constituted, are hereinafter collectively called all necessary instruments as may be necessary or convenient to perfect the "LENDER'S security interest in the Collateral." The granting and assigning of 3.3 So long as such security interests and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Liens in the Collateral loans or any part thereof, together with interest thereon, shall 8 remain unpaid, the LENDER shall have all the rights of an unconditional owner of such mortgage promissory notes and mortgages, including but without limitation, the following: (a) The right to declare the entire principal sum of such mortgage promissory notes and mortgages immediately due and payable in the event of a default on the part of any owner of the mortgaged premises in any of the terms of such mortgage promissory notes and mortgages. In addition BORROWER is allowed to cure default by replacing such mortgage or mortgages with others acceptable to LENDER. (b) The right to receive the principal sum of such mortgage promissory notes and mortgages or any part thereof, and upon receipt of the unpaid balance of the principal sum with interest, to execute and acknowledge in its own name and deliver a satisfaction of such mortgage promissory notes and mortgages or an assignment thereof in form to be recorded, and to retain for its own use the sums so received by it and to apply such sums on account of such loan and interest; 9 (c) The right to collect all interest thereon which may become due and payable, and to apply such interest on account of the interest due and payable, and to apply such interest on account of the interest due or hereafter to become due to the granting LENDER from the BORROWER shall not be entitled to any abatement of interest by reason of any sums collected by the LENDER as interest on such mortgage promissory notes and mortgages in advance of the first date upon which interest shall become due and prior Liens referred to above, Borrowers shall also grant payable to the Banks a negative pledge LENDER from the BORROWER on all account of their other assets.such loan; (d) The right in case of default under the terms of such mortgage promissory notes and mortgages by any owner of the mortgaged premises, to institute, prosecute to judgement, settle, or discontinue any proceeding at law or in equity to enforce the collection of the mortgage debt, and to foreclose such mortgage, and the BORROWER shall indemnify the LENDER 10

Collateral Security. To secure (a) On the performance by Borrowers of their obligations hereunder, and under the NotesIssue Date, the Guaranty Company shall (i) enter into the Pledge Agreement and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint thereafter comply with the terms and several, including extensions, modifications, renewals provisions of such agreement and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior (ii) pledge the Pledged Securities to the execution Pledged Securities Intermediary for the benefit of this Agreement the Trustee and the Notes, grant and assign to Agent for the ratable benefit of the Banks a first and prior Lien on (i) the Rigs, together with an assignment Holders in such amount as will be sufficient upon receipt of scheduled interest and/or principal payments of such Pledged Securities to provide for payment in full of the insurance covering such Rigsfirst six scheduled interest payments due on the Securities, but excluding the charter hireLiquidated Damages, drilling contract earnings and revenues if any. The Pledged Securities shall be pledged by the Company to the Pledged Securities Intermediary for the benefit of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, Trustee and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first Holders and prior Lien (shall be held by the Pledged Securities Intermediary in the Pledge Account pending disposition pursuant to the satisfaction Pledge Agreement. The Pledged Securities shall also secure the payment of the AgentPrincipal Amount and Liquidated Damages, if any, due on the Securities subject to the terms and conditions set forth in Section 13 of the Pledge Agreement. (b) Each Holder, by its acceptance of a Security, consents and agrees to the terms of the Pledge Agreement (including, without limitation, the provisions providing for foreclosure and release of the Pledged Securities) as such agreement may be in effect or may be amended from time to time in accordance with this Section 6their terms, and authorizes and directs the Pledged Securities Intermediary and the Trustee to enter into the Pledge Agreement and to perform their respective obligations and exercise their respective rights under such agreement in accordance therewith. The Company will do or cause to be done all such acts and things as may be necessary or reasonably requested by the Pledged Securities Intermediary or the Trustee, or as may be required by the provisions of the Pledge Agreement, to assure and confirm to the Pledged Securities Intermediary and the Trustee the security interest in the Pledged Securities contemplated hereby, by the Pledge Agreement or any part of such agreement, as such properties and interests are from time to time constituted, are hereinafter collectively called so as to render the "Collateral." The granting same available for the security and assigning benefit of such security interests this Indenture and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory of the Securities secured hereby, according to the Agentintent and purposes herein and therein expressed. Borrowers will The Company shall take, or cause to be executed taken, upon request of the Pledged Securities Intermediary or the Trustee, any and delivered all actions reasonably required to create and maintain, as security for the obligations of the Company under this Indenture and the Securities, a valid, enforceable and perfected first priority Lien in and on all the Pledged Securities, in favor of the Pledged Securities Intermediary for the benefit of the Trustee and the ratable benefit of the Holders, superior to and prior to the Agentrights of third Persons and subject to no other Liens. (c) The release of any portion of the Pledged Securities pursuant to the Pledge Agreement will not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Pledged Securities are released pursuant to this Indenture and the Pledge Agreement. To the extent applicable, the Company shall cause TIA Section 314(d) relating to the release of property or securities from the Lien and security interest of the Pledge Agreement and relating to the substitution therefore of any property or securities to be subjected to the Lien and security interest of the Pledge Agreement to be complied with. Any certificate or opinion required by TIA Section 314(d) may be made by an Officer of the Company, except in cases where TIA Section 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Company. (d) The Company shall cause TIA Section 314(b), relating to opinions of counsel regarding the Lien under the Pledge Agreement, to be complied with. The Pledged Securities Intermediary and the Trustee may accept, to the extent permitted by Sections 4.4 and 7.6 as conclusive evidence of compliance with the foregoing provisions, the appropriate statements contained in such instruments. (e) The Pledged Securities Intermediary and the Trustee may, in their sole discretion and without the futureconsent of the Holders, additional Security Instruments on behalf of the Holders, take all reasonable actions in accordance with the Pledge Agreement, necessary or appropriate in order to (i) enforce any of the terms of the Pledge Agreement and (ii) collect and receive any and all amounts payable in respect of the obligations of the Company under such agreement. The Pledged Securities Intermediary and the Trustee shall have power to institute and to maintain such suits and proceedings as the they may reasonably deem expedient to preserve or protect their interests and the interests of the Holders in the Pledged Securities (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the Agent reasonably deems enforcement of, or compliance with, such are necessary to insure perfection enactment, rule or maintenance of Banks' Liens in order would impair the Collateral security interest hereunder or any part thereof. In addition be prejudicial to the granting interests of the first and prior Liens referred to aboveHolders, Borrowers shall also grant to the Banks a negative pledge on all Pledged Securities Intermediary or of their other assetsthe Trustee).

Collateral Security. To secure The Borrowers hereby grant the performance by Borrowers of their obligations hereunder, and under Stockholders’ Representative a first-lien security interest in the Notes, the Guaranty and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior to the execution of this Agreement and the Notes, grant and assign to Agent Collateral as collateral security for the ratable benefit of the Banks a first and prior Lien on Borrowers’ obligations under this Note. For this purpose, “Collateral” shall mean, collectively: (i) the Rigs, together with an assignment of the insurance covering such Rigseither Borrower’s contracts specified on Annex A (collectively, the charter hire, drilling contract earnings and revenues of the Rigs“Contracts”), (ii) at least $20,000,000 in market value Treasury Bondsall Accounts arising under the Contracts, (ii) any Supporting Obligations related to the Accounts arising under the Contracts; (iii) 66% of all books and records pertaining to the voting stock of the Material SubsidiariesCollateral, and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit products and/or Proceeds of the Banks a first and prior Lien (to foregoing, in each case whether now owned or acquired in the satisfaction future. All of the Agentcapitalized terms used in clauses (i) through (iv) above shall have the meanings ascribed to them under the UCC as in accordance with this Section 6effect, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers will cause to be executed and delivered to the Agenttime, in the futureState of New York; provided, additional Security Instruments if however, that if, by reason of mandatory provisions of law, the Agent reasonably deems such are necessary to insure perfection or maintenance the effect of Banks' Liens in the Collateral perfection or any part thereof. In addition to the granting non-perfection of the first security interest granted hereunder in any Collateral is governed by the UCC as in effect in a jurisdiction other than New York, then an affected capitalized term shall have the meaning ascribed to it under the UCC as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. This Note is subject to a Lien Subordination Agreement dated of even date herewith between the Slipstream Communications, LLC, an Anguillan limited liability company and prior Liens referred senior lender to aboveBorrowers (“Senior Lender”) and Stockholders’ Representative. Borrower hereby authorizes Stockholders’ Representative to file such financing statements, Borrowers financing statement amendments and continuation statements as Stockholders’ Representative shall also grant reasonably determine necessary or appropriate to perfect or continue the Banks a negative pledge on all perfection of their other assetsthe security interest granted hereby and to reflect the assignments contemplated herein.

Collateral Security. To secure (a) On the performance by Borrowers of their obligations hereunder, and under the NotesIssue Date, the Guaranty and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers Company shall contemporaneously with or prior to (i) enter into the execution of this Pledge Agreement and the Notes, grant Control Agreement and assign thereafter comply with the terms and provisions of each such agreements and (ii) pledge the Pledged Securities (and additional Pledged Securities prior to any sale of Option Securities (as defined in the Pledge Agreement)) to the Collateral Agent for the benefit of the Trustee and the ratable benefit of the Banks a first and prior Lien on (i) the Rigs, together with an assignment Holders in such amount as will be sufficient upon receipt of scheduled interest and/or principal payments of such Pledged Securities to provide for payment in full of the insurance covering such Rigs, first six scheduled interest payments due on the charter hire, drilling contract earnings and revenues Securities. The Pledged Securities shall be pledged by the Company to the Collateral Agent for the benefit of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, Trustee and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first Holders and prior Lien (shall be held by the Collateral Agent in the Pledge Account pending disposition pursuant to the satisfaction Pledge Agreement. (b) Each Holder, by its acceptance of a Security, consents and agrees to the terms of the AgentPledge Agreement (including, without limitation, the provisions providing for foreclosure and release of the Pledged Securities) and the Control Agreement as either such agreement may be in effect or may be amended from time to time in accordance with this Section 6their terms, and authorizes and directs the Collateral Agent and the Trustee to enter into the Pledge Agreement and the Control Agreement and to perform their respective obligations and exercise their respective rights under each such agreement in accordance therewith. The Company will do or cause to be done all such acts and things as may be necessary or reasonably requested by the Collateral Agent or the Trustee, or as may be required by the provisions of the Pledge Agreement and the Control Agreement, to assure and confirm to the Collateral Agent and the Trustee the security interest in the Pledged Securities contemplated hereby, by the Pledge Agreement or by the Control Agreement or any part of any such agreement, as such properties and interests are from time to time constituted, are hereinafter collectively called so as to render the "Collateral." The granting same available for the security and assigning benefit of such security interests this Indenture and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory of the Securities secured hereby, according to the Agentintent and purposes herein and therein expressed. Borrowers will The Company shall take, or cause to be executed taken, upon request of the Collateral Agent or the Trustee, any and delivered all actions reasonably required to create and maintain, as security for the obligations of the Company under this Indenture and the Securities, a valid, enforceable and perfected first priority Lien in and on all the Pledged Securities, in favor of the Collateral Agent for the benefit of the Trustee and the ratable benefit of the Holders, superior to and prior to the Agentrights of third Persons and subject to no other Liens. (c) The release of any portion of the Pledged Securities pursuant to the Pledge Agreement will not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Pledged Securities are released pursuant to this Indenture, the Pledge Agreement and the Control Agreement. To the extent applicable, the Company shall cause TIA Section 314(d) relating to the release of property or securities from the Lien and security interest of the Pledge Agreement and relating to the substitution therefore of any property or securities to be subjected to the Lien and security interest of the Pledge Agreement to be complied with. Any certificate or opinion required by TIA Section 314(d) may be made by an Officer of the Company, except in cases where TIA Section 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Company. (d) The Company shall cause TIA Section 314(b), relating to opinions of counsel regarding the Lien under the Pledge Agreement, to be complied with. The Collateral Agent and the Trustee may accept, to the extent permitted by Sections 4.4 and 7.6 as conclusive evidence of compliance with the foregoing provisions, the appropriate statements contained in such instruments. (e) The Collateral Agent and the Trustee may, in their sole discretion and without the futureconsent of the Holders, additional Security Instruments on behalf of the Holders, take all reasonable actions in accordance with the Pledge Agreement and the Control Agreement, necessary or appropriate in order to (i) enforce any of the terms of the Pledge Agreement and the Control Agreement and (ii) collect and receive any and all amounts payable in respect of the obligations of the Company under such agreements. The Collateral Agent and the Trustee shall have power to institute and to maintain such suits and proceedings as the they may reasonably deem expedient to preserve or protect their interests and the interests of the Holders in the Pledged Securities (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the Agent reasonably deems enforcement of, or compliance with, such are necessary enactment, rule or order would impair the security interest hereunder or be prejudicial to insure perfection or maintenance the interests of Banks' Liens in the Holders, the Collateral Agent or any part thereof. In addition to the granting of the first and prior Liens referred to above, Borrowers shall also grant to the Banks a negative pledge on all of their other assetsTrustee).

Collateral Security. To secure Payment and performance of the performance Obligations shall be secured by Borrowers of their obligations hereunderthe following Collateral, and under the NotesBorrower hereby grants, conveys, transfers and assigns to the Guaranty Lender a security interest in and Security Instrumentslien upon all of the property described below: A. A second assignment of, whether now security interest in and lien upon all of the Borrower's interests in and to all patents for products, goods and items produced or hereafter incurredmanufactured by the Borrower, matured and all processes employed in the production or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases manufacture thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior to the execution of this Agreement and extent the Notes, grant and assign to Agent for the ratable benefit of the Banks a first and prior Lien on (i) the Rigs, together with an assignment of the insurance covering such Rigs, the charter hire, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests shall not constitute a violation of law or a default under any existing agreement between the Borrower and Liens by Borrowers shall be pursuant any Person with regard to Security Instruments any such patents; B. A continuing security interest in form and substance reasonably satisfactory to lien upon all of the AgentBorrower's accounts, inventory, and general intangibles, and a security interest in and lien upon all of the Borrower's furniture, machinery and equipment, whether now owned or hereafter acquired, and wherever located, together with all proceeds thereof. Borrowers will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Liens Lender's security interest in the Collateral or any part thereof. In addition shall be junior and subordinate to the granting security interest of DAMAD Holding AG to such Collateral. Borrower agrees and undertakes to execute and deliver to the Lender such deeds of trust, security agreements, pledge agreements, assignments, financing statements, subordinations, certificates, waivers, estoppel agreements, and other documentation, in form acceptable to the Lender, as may be reasonably requested by the Lender in connection with the Collateral. Borrower further agrees that all of the first and prior Liens referred to above, Borrowers Collateral shall also grant secure all of the Obligations of the Borrower to the Banks Lender. It is specifically agreed and acknowledged by the parties hereto that the personal and real property owned by Schoeller Xxxxxx Technologies GmbH, a negative pledge on all joint venture between Borrower and Schoeller Textil AG, shall not be deemed to be Collateral, as herein defined. Lender agrees that it will release its security interest in the Borrower's accounts receivable upon the establishment by Borrower of their other assetsa program of factoring such accounts receivable.

Collateral Security. To secure the performance by Borrowers Borrower and the Guarantors of their obligations hereunder, and under the Notes, the Guaranty Note and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers Borrower and the Guarantors shall contemporaneously with or prior to the execution of this Agreement and the Notes, grant and assign to Agent for the ratable benefit of the Banks a first and prior Lien on (i) the Rigs, together with an assignment of the insurance covering such Rigs, the charter hire, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% . All agreements and obligations arising out of Rate Management Transactions between Borrower and the voting stock Banks or their Affiliates shall be secured by the Collateral and paid on a pari passu basis with the indebtedness and obligations of Borrower under this Agreement and the Material Subsidiaries, and (iv) the Subsidiary Notesother Loan Documents. The Rigs, Treasury Bonds, stock and Subsidiary Notes Rigs and other collateral in which Borrowers Borrower and the Guarantors have herewith granted or hereafter grants grant to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests and Liens by Borrowers Borrower and the Guarantors shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers Borrower and the Guarantors will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Liens in the Collateral or any part thereof. In addition to the granting of the first and prior Liens referred to above, Borrowers Borrower shall also (i) grant to the Banks a negative pledge on all of their its other assetsassets and (ii) provide the Guaranties.

Collateral Security. To secure the performance by Borrowers Borrower of their obligations hereunder, and under the Notes, the Guaranty Note and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers Borrower shall contemporaneously with or prior to the execution of this Agreement and the NotesNote, grant and assign to Agent for the ratable benefit of the Banks Bank a first and prior security interest and Lien on (i) the Rigscertain of its Oil and Gas Properties, together with an assignment and on certain related equipment, oil and gas inventory and proceeds of the insurance covering such Rigsforegoing. To further secure the foregoing, Bank shall have the charter hire, drilling contract earnings right to acquire the note and revenues of liens previously granted to the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, Midland or any holders thereof by Borrower. All Oil and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes Gas Properties and other collateral in which Borrowers Borrower have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks Bank a first and prior Lien (to the satisfaction of the AgentBank) in accordance with this Section 66 or Oil and Gas Properties covered by the Liens which are acquired by Bank from the Midland or any holders thereof, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests and Liens by Borrowers Borrower shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the AgentBank. Borrowers Concurrently with the delivery of each of the Security Instruments, Borrower shall furnish to the Bank mortgage and title opinions and other documents reasonably satisfactory to Bank with respect to the title and Lien status of Borrower's interests in such of the Oil and Gas Properties covered by the Security Instruments as Bank shall have designated. Borrower will cause to be executed and delivered to the AgentBank, in the future, additional Security Instruments if the Agent Bank reasonably deems such are necessary to insure perfection or maintenance of Banks' Bank's security interests and Liens in the Collateral Oil and Gas Properties or any part thereof. In addition to the granting of the first and prior Liens referred to above, Borrowers shall also grant to the Banks a negative pledge on all of their other assets.

Collateral Security. To secure the performance by Borrowers of their obligations hereunder, and under the Notes, the Guaranty and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior to the execution of this Agreement and the Notes, grant and assign to Agent for the ratable benefit of the Banks a first and prior Lien on (i) the Rigs, together with an assignment of the insurance covering such Rigs, the charter hire, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 19,600,000 in market value Treasury Bonds, (iii) 66% of the voting stock of all foreign Material Subsidiaries, (iv) 100% of the voting stock of all domestic Material Subsidiaries, and (ivv) the Subsidiary Notes. All agreements and obligations arising out of Rate Management Transactions between either Borrower and the Banks or their Affiliates shall be secured by the Collateral and paid on a pari passu basis with the indebtedness and obligations of such Borrower under this Agreement and the other Loan Documents. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Liens in the Collateral or any part thereof. In addition to the granting of the first and prior Liens referred to above, Borrowers shall also grant to the Banks a negative pledge on all of their other assets.

Collateral Security. (a) To secure the performance by Borrowers Borrower of their its obligations hereunder, and under the Notes, the Guaranty and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior to the execution of this Agreement and the Notes, Borrower shall grant and assign to Agent in its capacity as such Agent under this Agreement for the ratable benefit of the Banks Lenders hereunder, a first priority security interest in and prior Lien (and only Lien, except for Permitted Liens) on (i) the Rigs, together with an assignment certain of the insurance covering Oil and Gas Properties of Borrower as may be selected by Agent, in its capacity as such Rigs, the charter hire, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material SubsidiariesAgent under this Agreement, and the oil, gas and mineral production therefrom or attributable thereto, and in all operating agreements and oil or gas purchase contracts (ivnow existing or hereafter arising) relating to such Oil and Gas Properties and in related personal properties, fixtures and other properties, as evidenced by mortgages, deeds of trust, assignments of production, security agreements, general security agreements, indentures, and other documents to be executed by Borrower and delivered to or on behalf of Agent, in its capacity as such Agent under this Agreement for the Subsidiary Notesratable benefit of Lenders. The RigsObligations arising from agreements arising from Rate Management Transactions between Borrower and one or more of Lenders or an Affiliate of any of Lenders shall be secured by the Collateral covering the Oil and Gas Properties on a pari passu basis with the indebtedness and obligations of Borrower under the Loan Documents. Once agreements arising from Rate Management Transactions involving one or more Lenders, Treasury Bondsor an Affiliate of any Lender, stock are entered into, and Subsidiary Notes pursuant to this provision become secured by the Collateral on a pari passu basis, said Collateral shall continue to secure such obligations until such agreements are no longer in force and effect irrespective of whether Lender involved in such agreement ceases to be a Lender under this Agreement. All Oil and Gas Properties and other collateral in which Borrowers have herewith granted Borrower grants or hereafter grants to Agent for the ratable benefit of the Banks Lenders, a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "“Collateral”." (b) The granting and assigning of such security interests and Liens by Borrowers Borrower shall be pursuant to Security Instruments Collateral Documents in form and substance reasonably satisfactory to the Agent. Borrowers Concurrently with the delivery of each of the Collateral Documents or within a reasonable time thereafter, Borrower shall have furnished or caused to be furnished to Agent mortgage and title opinions and other title information reasonably satisfactory to Agent with respect to the title and Lien status of Borrower’s interests in not less than 75% of the Engineered Value of the mortgaged Borrowing Base Properties. “Engineered Value” for this purpose shall mean future net revenues discounted at the discount rate being used by Agent as of the date of any such determination utilizing the pricing parameters used in the engineering report furnished to Agent pursuant to Sections 7 and 12 hereof. Borrower will cause to be executed and delivered to the Agent, in the future, additional Security Instruments Collateral Documents if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Lenders’ security interests and Liens in the Collateral or any part thereof. In addition to the granting not less than 80% of the first Engineered Value of Borrower’s Oil and prior Liens referred to above, Borrowers shall also grant to Gas Properties which are included in the Banks a negative pledge on all of their other assetsBorrowing Base then in effect.

Collateral Security. To secure the performance by Borrowers Borrower of their obligations hereunder, and under the Notes, the Guaranty Note or Notes and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior Borrower has heretofore granted and assigned to the execution of this Agreement and the Notes, grant and assign to Agent for the ratable benefit of the Banks a first and prior security interest and Lien on certain of its Oil and Gas Properties, certain related equipment, oil and gas inventory and proceeds of the foregoing, proceeds of partnership interests, stock of Subsidiaries, promissory notes of Subsidiaries and similar collateral. Contemporaneously with the execution and delivery of this Agreement and the Notes (i) Borrower shall grant and assign to Agent for the Rigs, together with an assignment benefit of the insurance covering such RigsBanks a first and prior security interest and Lien on certain additional Oil and Gas Properties, related equipment, oil and gas inventory and the charter hireproceeds thereof including those oil and gas properties being acquired by Borrower from Conoco, drilling contract earnings Inc. and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% Espero shall grant and assign to Agent for the benefit of the voting stock Banks a first and prior security interest and Lien on certain of their Oil and Gas Properties, related equipment, oil and gas inventory and the Material Subsidiaries, proceeds thereof. All Oil and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes Gas Properties and other collateral in which Borrowers Borrower and Espero have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the AgentBanks) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests and Liens by Borrowers Borrower and Espero shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers Concurrently with the delivery of each of the Security Instruments, Borrower and Espero shall furnish to the Agent mortgage and title opinions and other documents reasonably satisfactory to Agent with respect to the title and Lien status of Borrower's and Espero's interests in such of the Oil and Gas Properties covered by the Security Instruments as Agent shall have designated. Borrower and Espero will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' security interests and Liens in the Collateral Oil and Gas Properties or any part thereof. In addition to The obligations of Borrower hereunder, and under the granting Note or Notes and Security Instruments, shall be additionally secured by the Guaranty Agreements, executed by each of the first and prior Liens referred to aboveGuarantors, Borrowers shall also grant to the Banks a negative pledge on all form of their other assetswhich Guaranty Agreement is attached hereto as Exhibit "C".

Collateral Security. (a) To secure the performance by Borrowers Borrower of their its obligations hereunder, and under the Notes, the Guaranty and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior to the execution of this Agreement and the Notes, Borrower and Guarantors shall grant to Agent in its capacity as such Agent under this Agreement for the ratable benefit of Secured Parties hereunder, a first priority security interest in and assign Lien (and only Lien, except for Permitted Liens) on certain of the Oil and Gas Properties of Borrower and Guarantors as may be selected by Agent, in its capacity as such Agent under this Agreement, and the oil, gas and mineral production therefrom or attributable thereto, and in all operating agreements and oil or gas purchase contracts (now existing or hereafter arising) relating to such Oil and Gas Properties and in related personal properties, fixtures and other properties, as evidenced by mortgages, deeds of trust, assignments of production, security agreements, general security agreements, indentures, and other documents to be executed by Borrower and Guarantors and delivered to or on behalf of Agent, in its capacity as such Agent under this Agreement for the ratable benefit of Secured Parties. Obligations arising from agreements arising from Rate Management Transactions between Borrower and one or more of Secured Parties shall be secured by the Collateral covering the Oil and Gas Properties on a pari passu basis with the indebtedness and obligations of Borrower under the Loan Documents. Once agreements arising from Rate Management Transactions involving one or more Secured Parties are entered into, and pursuant to this provision become secured by the Collateral on a pari passu basis, said Collateral shall continue to secure such obligations until such agreements are no longer in force and effect irrespective of whether a Secured Party involved in such agreement ceases to be a Lender under this Agreement. All Oil and Gas Properties and other collateral in which Borrower and Guarantors grant or hereafter grant to Agent for the ratable benefit of the Banks a first and prior Lien on (i) the RigsSecured Parties, together with an assignment of the insurance covering such Rigs, the charter hire, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of the Material Subsidiaries, and (iv) the Subsidiary Notes. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "“Collateral”." The granting and assigning of such security interests and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Liens in the Collateral or any part thereof. In addition to the granting of the first and prior Liens referred to above, Borrowers shall also grant to the Banks a negative pledge on all of their other assets.

Collateral Security. To secure the performance by Borrowers of their obligations hereunder, and under the Notes, the Guaranty and Security Instruments, whether now or hereafter incurred, matured or unmatured, direct or contingent, joint or several, or joint and several, including extensions, modifications, renewals and increases thereof, and substitutions therefore, Borrowers shall contemporaneously with or prior to the execution of this Agreement and the Notes, grant and assign to Agent for the ratable benefit of the Banks a first and prior Lien on (i) the Rigs, together with an assignment of the insurance covering such Rigs, the charter hire, drilling contract earnings and revenues of the Rigs, (ii) at least $20,000,000 in market value Treasury Bonds, (iii) 66% of the voting stock of all foreign Material Subsidiaries, (iii) 100% of the voting stock of all domestic Material Subsidiaries, and (iv) the Subsidiary Notes. All agreements and obligations arising out of Rate Management Transactions between either Borrower and the Banks or their Affiliates shall be secured by the Collateral and paid on a pari passu basis with the indebtedness and obligations of such Borrower under this Agreement and the other Loan Documents. The Rigs, Treasury Bonds, stock and Subsidiary Notes and other collateral in which Borrowers have herewith granted or hereafter grants to Agent for the ratable benefit of the Banks a first and prior Lien (to the satisfaction of the Agent) in accordance with this Section 6, as such properties and interests are from time to time constituted, are hereinafter collectively called the "Collateral." The granting and assigning of such security interests and Liens by Borrowers shall be pursuant to Security Instruments in form and substance reasonably satisfactory to the Agent. Borrowers will cause to be executed and delivered to the Agent, in the future, additional Security Instruments if the Agent reasonably deems such are necessary to insure perfection or maintenance of Banks' Liens in the Collateral or any part thereof. In addition to the granting of the first and prior Liens referred to above, Borrowers shall also grant to the Banks a negative pledge on all of their other assetsassets (limited, in the case of the voting stock of foreign subsidiaries, to 66% of such stock).