EXHIBIT 10.7
PARENT PLEDGE AGREEMENT
dated October 13, 2006,
between
The Shaw Group Inc.
as Pledgor
and
The Bank of New York
as Trustee

 

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This PARENT PLEDGE AGREEMENT, dated October 13, 2006 (this “Agreement”), is
entered into between The Shaw Group Inc., a Louisiana corporation (the
“Pledgor”), and The Bank of New York, as security agent for the Secured
Creditors (as defined below) (herein in such capacity, the “Trustee”).
RECITALS
A. Nuclear Energy Holdings, L.L.C. , a limited liability company organized under
the laws of the State of Delaware (the “Issuer”), and the Trustee, have entered
into a Bond Trust Deed dated October 13, 2006 (the “Bond Trust Deed”), pursuant
to which the Issuer is issuing JPY 50,980,000,000 aggregate principal amount of
2.20% Fixed Rate Bonds due 2013 and JPY 78,000,000,000 aggregate principal
amount of Floating Rate Bonds due 2013 (together, the “Bonds”).
B. The Pledgor is the sole member of the Issuer and has agreed to pledge its
membership interest in the Issuer as additional security for the Secured
Obligations.
C. As a condition precedent to issuance of the Bonds under the Bond Trust Deed,
the Pledgor is required to execute and deliver this Agreement.
In consideration of the premises and for other valuable consideration, the
receipt and sufficiency of which the parties hereto hereby acknowledge, the
Pledgor and the Trustee, on behalf of itself and each Secured Creditor (and each
of their respective successors or permitted assigns), hereby agree as follows:
SECTION 1
DEFINITIONS; RULES OF INTERPRETATION
Section 1.1 Definition of Terms Used Herein
Unless the context otherwise requires, all capitalized terms used but not
defined herein shall have the meanings set forth in the Deed of Charge (as
defined below).
Section 1.2 UCC
Terms used herein that are defined in the UCC but not defined herein have the
meanings given to them in the UCC.
Section 1.3 General Definitions In this Agreement:
“Agreement” has the meaning set forth in the preamble hereto.
“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et.
seq.
“Bond Trust Deed” has the meaning set forth in the recitals hereof.
“Cash Collateral Account” means any Deposit Account or Securities Account
established by the Trustee in which cash and Cash Equivalents may from time to
time be on deposit or held therein as provided herein.
“Collateral” means the property of the Pledgor described in Section 2.1 in which
Security Interests are granted to the Trustee for the benefit of the Secured
Creditors.
“Collateral Records” means books, records, ledger cards, files, correspondence,
customer lists, blueprints, technical specifications, manuals, computer
software, computer printouts, tapes, disks and

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related data processing software and similar items that at any time evidence or
contain information relating to any of the Collateral or are otherwise necessary
or helpful in the collection thereof or realization thereon.
“Deed of Charge” means the deed of charge dated on or about the date hereof
among the Trustee, the Issuer, the Account Bank, the Cash Manager and the
Principal Paying Agent.
“Dividends” means, in relation to Pledged LLC Interest, all present and future:
(a) dividends and distributions of any kind and any other sum received or
receivable in respect of that Pledged LLC Interest, (b) rights, shares, money or
other assets accruing or offered by way of redemption, substitution, exchange,
bonus, option, preference or otherwise in respect of that Pledged LLC Interest,
(c) allotments, offers and rights accruing or offered in respect of that Pledged
LLC Interest and (d) other rights and assets attaching to, deriving from or
exercisable by virtue of the ownership of, that Pledged LLC Interest.
“Enforcement Event” means the service of the Bond Enforcement Notice under
Section 7 of the Deed of Charge.
“Federal Securities Laws” means the Securities Act of 1933, as now or hereafter
in effect, or any similar statute hereafter enacted that is analogous in purpose
or effect.
“General Intangibles” means “general intangibles” as defined in Article 9 of the
UCC.
"Indemnified Party” means each Secured Creditor, each Affiliate thereof and each
of their respective partners, controlling Persons, directors, officers,
trustees, employees and agents.
“Indemnified Matters” has the meaning set forth in Section 9.6.
“Issuer Pledge Agreement” means the pledge agreement dated on or about the date
hereof between the Issuer and the Trustee.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any agreement or arrangement
that has the practical effect of creating a security interest, in respect of
such asset.
“LLC Agreement” means the limited liability company agreement governing the
operation of Nuclear Energy Holdings, L.L.C.
“Pledged Collateral” means, collectively, the Pledged LLC Interest, all General
Intangibles related to the Pledged LLC Interest, all certificates or other
instruments representing the Pledged LLC Interest and all distributions, cash,
warrants, rights, instruments and other property or Proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing.
“Pledged LLC Interest” means all of the Pledgor’s right, title and interest as a
member of Nuclear Energy Holdings, L.L.C. a Delaware limited liability company
and all of the Pledgor’s right, title and interest in, to and under the LLC
Agreement.
“Pledgor” has the meaning set forth in the preamble hereto.
“Proceeds” means “Proceeds,” as defined in Article 9 of the UCC, and includes
all payments or distributions made with respect to the Pledged Collateral and
whatever is receivable or received when

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the Collateral or Proceeds are sold, exchanged, collected, converted or
otherwise disposed of, whether such disposition is voluntary or involuntary.
“Secured Creditors” has the meaning set forth in the Deed of Charge.
“Secured Obligations” means all amounts, obligations, covenants and duties owing
by the Pledgor or the Issuer to the Secured Creditors, present or future,
arising under the Transaction Documents, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired and whether or not evidenced
by any note, guaranty or other instrument or for the payment of money.
“Security Interest” means, collectively, the continuing security interests in
the Collateral granted to the Trustee for the benefit of the Secured Creditors
pursuant to Section 2.1.
“Security Supplement” means any supplement to this Agreement in substantially
the form of Exhibit A, executed by an authorized financial officer of the
Pledgor.
“Stock” means shares of capital stock (whether denominated as common stock or
preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non voting, and all rights to subscribe for, purchase or
otherwise acquire any of the foregoing.
“Toshiba” means Toshiba Corporation, a corporation organized under the laws of
Japan.
“Trustee” has the meaning set forth in the preamble hereto.
“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or, when the context implies, the Uniform Commercial Code as
in effect from time to time in any other applicable jurisdiction.
Section 1.4 Rules of Interpretation
In this Agreement, unless otherwise specified, (a) the Schedules and Exhibits to
this Agreement, in each case as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the provisions hereof,
are incorporated herein by reference and (b) all obligations of the Pledgor
hereunder shall be satisfied by the Pledgor at the Pledgor’s sole cost and
expense.
Section 1.5 Certain Terms
The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include” and “includes” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein,” “hereof” and
“hereunder,” and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Sections, Exhibits and Schedules shall be construed to
refer to Sections of, and

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Exhibits and Schedules to, this Agreement, (e) any reference to any law or
regulation herein (including the UCC) shall, unless otherwise specified, refer
to such law or regulation as amended, modified or supplemented from time to time
and (f) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 2
GRANT OF SECURITY
Section 2.1 Grant of Security
As security for the prompt and complete payment and performance in full when due
(whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise, including the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code) of all Secured Obligations, the Pledgor hereby pledges, assigns, transfers
and grants to the Trustee, for its benefit and for the benefit of the Secured
Creditors, a continuing security interest in and Lien on all of its right, title
and interest in, to and under the following, in each case whether now owned or
existing or hereafter acquired or arising and wherever located:

  (a)   all Pledged Collateral;     (b)   all books and Records pertaining to
the Pledged Collateral, including all Collateral Records; and     (c)   to the
extent not otherwise included, all Proceeds of each of the foregoing and all
accessions to, and substitutions and replacements for, any of the foregoing.

For avoidance of doubt it is expressly understood and agreed that, to the extent
the UCC is revised subsequent to the date hereof such that the definition of any
of the foregoing terms included in the description of Collateral is changed, the
parties hereto desire that any property that is included in such changed
definitions that would not otherwise be included in the foregoing grants on the
date hereof be included in such grants immediately upon the effective date of
such revision, it being the intention of the Pledgor that the description of
Collateral set forth above be construed to include the broadest possible range
of assets. Notwithstanding the immediately preceding sentence, the foregoing
grant is intended to apply immediately on the date hereof to all Collateral to
the fullest extent permitted by applicable law regardless of whether any
particular item of Collateral is currently subject to the UCC.
Section 2.2 Grant of Security
Notwithstanding anything to the contrary contained in this Section 2 or
elsewhere in this Agreement, the Pledgor and the Trustee (on behalf of the
Secured Creditors) acknowledge and agree that the Security Interest granted
pursuant to this Agreement (including pursuant to this Section 2) to the Trustee
for the benefit of the Secured Creditors and securing the Secured Obligations
shall be a “first” priority Security Interest in the Collateral, junior to no
other security interests. The parties hereto acknowledge, and the Trustee hereby
agrees, that the Trustee shall hold that portion of the Collateral constituting
Certificated Securities for and on behalf of the Secured Creditors as agent for
such parties for the purpose of perfecting a Security Interest in such
Collateral.

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SECTION 3
REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants to the Trustee and the Secured Creditors, on
and as of the date hereof, that:
Section 3.1 Title
The Pledgor owns the Collateral purported to be owned by it free and clear of
any and all Liens, rights or claims of all other Persons. The Pledgor has not
filed or consented to the filing of (a) any financing statement or analogous
document under the UCC or any other applicable laws covering any Collateral or
(b) any assignment in which the Pledgor assigns any Collateral or any security
agreement or similar instrument covering any Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous
document, assignment, security agreement or similar instrument is still in
effect, except for any financing statement or analogous document, assignment,
security agreement or similar instrument evidencing Liens being terminated on
the date hereof.
Section 3.2 Names, Locations

  (a)   Schedule 3.2 sets forth with respect to the Pledgor under the heading
“Names,” (i) its exact name, as such name appears in the public record of its
jurisdiction of organization which shows the Pledgor to have been formed,
(ii) each other name that the Pledgor has had in the past five years, together
with the date of the relevant change, (iii) a list of all other names (including
trade names or similar appellations) used by the Pledgor or any of its divisions
or other business units in connection with the conduct of its business or the
ownership of its properties in the past five years, (iv) the federal taxpayer
identification number of the Pledgor and (v) the jurisdiction of organization of
the Pledgor and its organizational identification number or statement that the
Pledgor has no such number.     (b)   Schedule 3.2 sets forth, with respect to
the Pledgor, under the heading “Locations” the location of its chief executive
office and each other chief executive office of the Pledgor within the past five
years, together with dates of the relevant change. Except as set forth on
Schedule 3.2, the Pledgor has not changed its jurisdiction of organization,
chief executive office or other “location” (as defined in Section 9-307 of the
UCC) in the past four months.     (c)   Except as set forth on Schedule 3.2
under the heading “Changes in Identity or Organizational Structure,” the Pledgor
has not changed its identity or organizational structure in any way in the past
five years. Changes in identity or organizational structure would include
mergers, consolidations and acquisitions, as well as any change in the form or
jurisdiction of the Pledgor. If any such change has occurred, Schedule 3.2 sets
forth the date of such change and all information applicable to each acquired
party or constituent party to a merger or consolidation.

Section 3.3 Filings, Consents

  (a)   Attached hereto as Exhibit B are true, complete and correct copies of
search reports from the offices where any filings or recordings against the
Pledgor with respect to any property of the Pledgor of the type included in the
Collateral have been made, including

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      a true copy of each financing statement, assignment or other filing or
recording identified in such search reports.     (b)   Exhibit C sets forth
true, complete and correct copies of all UCC financing statements or other
appropriate filings, recordings or registrations containing an accurate
description of the Collateral that have been delivered to the Trustee for filing
in each governmental, municipal or other office specified in Schedule 3.3.    
(c)   No authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for either
(i) the pledge or grant by the Pledgor of the Security Interest purported to be
created in favor of the Trustee hereunder or (ii) the exercise by the Trustee of
any rights or remedies in respect of the Collateral, including voting rights
(whether specifically granted or created hereunder or created or provided for by
applicable law), except (A) for the filings contemplated by clause (b) above and
(B) as may be required in connection with the disposition of the Pledged
Collateral by laws generally affecting the offering and sale of securities.    
(d)   All filing or recording fees and taxes payable in connection with the
filings and recordings described in clauses (b) and (c) above have been or
promptly will be paid by the Pledgor.

Section 3.4 Security Interests
The Security Interest constitutes (a) a legal and valid security interest in all
Collateral securing the payment and performance of the Secured Obligations and
(b) subject to the completion of the filings described in Section 3.3 and to
value being given, a perfected Security Interest in all Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document under the UCC as in effect in the
State of Louisiana. The Security Interest is and shall be prior to any other
Lien on any of the Collateral.
Section 3.5 Pledged Collateral

  (a)   Schedule 3.5 sets forth under the heading “Pledged LLC Interests” all
Pledged LLC Interests granted by the Pledgor hereof. The Pledged LLC Interest
pledged hereunder by the Pledgor constitutes, as of the date hereof, that
percentage of the issued and outstanding equity of all classes of Nuclear Energy
Holdings, L.L.C. as set forth on Schedule 3.5 under the heading “Pledged LLC
Interests.”     (b)   All of the Pledged LLC Interests have been duly and
validly issued and are fully paid and nonassessable.     (c)   No Person other
than the Trustee has “control” (as defined in Sections 8-106 and 9-106 of the
UCC) over any Pledged Collateral of the Pledgor constituting Certificated
Securities, and, other than the Pledged LLC Interests that constitute General
Intangibles, there is no Pledged Collateral other than Pledged Collateral that
is represented by Certificated Securities that are in the possession of the
Trustee.     (d)   All Pledged Collateral represented by Certificated Securities
has been delivered to the Trustee in the State of New York.

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  (e)   There are no restrictions on transfer in the LLC Agreement governing the
Pledged LLC Interests or any other agreement relating to the foregoing which
would limit or restrict (i) the grant of a security interest in the Pledged LLC
Interests, (ii) the perfection of such security interest or (iii) the exercise
of remedies in respect of such perfected security interest in the Pledged LLC
Interests, in each case as contemplated by this Agreement.

SECTION 4
COVENANTS
Section 4.1 Change of Name; Location of Collateral; Place of Business
Unless the Pledgor has given the Trustee at least 30 days prior written notice,
the Pledgor will not change (i) its name, (ii) its jurisdiction of organization
or other “location” (as defined in Section 9-307 of the UCC), (iii) the location
of its chief executive office, its principal place of business or any office in
which it maintains the Collateral Records (including the establishment of any
such new office or facility), (iv) its identity or organizational structure or
(v) its organizational identification number or its federal taxpayer
identification number. The Pledgor agrees to cooperate with the Trustee in
making all filings that are required in order for the Trustee to continue at all
times following such change to have a legal, valid and perfected Security
Interest in all the Collateral having the priority described in Section 2.2.
Section 4.2 Protection of Security
The Pledgor shall, at its own cost and expense, take any and all actions
necessary or desirable to defend title to the Collateral and to defend the
Security Interest of the Trustee in the Collateral and the priority thereof
against any Lien against all Persons. The Pledgor shall not take or permit to be
taken any action that could impair the Trustee’s rights in the Collateral.
Section 4.3 Pledged Collateral

  (a)   The Pledgor hereby covenants and agrees that, without the prior written
consent of the Trustee, which shall not be unreasonably withheld, delayed or
conditioned, it shall not vote or take any other action to amend or terminate
any LLC Agreement, certificate of formation, by-laws or other organizational
documents in any way that materially changes the rights of the Pledgor with
respect to any Pledged Collateral or adversely affects the validity, perfection
or priority of the Trustee’s Security Interest (including without limitation,
any election that would cause the Pledged LLC Interest not to be a “Security”
under Section 8-102(a)(15) of the UCC, it being acknowledged that as of the date
hereof the LLC Agreement, in accordance with Section 8-103(c) of the UCC as in
effect in the State of Delaware and Section 8-103(c) of the UCC as in effect in
the State of New York, provides that each limited liability company interest in
the Issuer shall constitute a “security” within the meaning of, and governed by,
(i) Article 8 of the Uniform Commercial Code (including Section 8 102(a)(15)
thereof) as in effect from time to time in the State of Delaware, and
(ii) Article 8 of the Uniform Commercial Code of any other applicable
jurisdiction that now or hereafter substantially includes the 1994 revisions to
Article 8 thereof as adopted by the American Law Institute and the National
Conference of Commissioners on Uniform State Laws and approved by the American
Bar Association on February 14, 1995).

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  (b)   The Pledgor hereby covenants and agrees that, in the event it
establishes or acquires rights in any Pledged Collateral after the date hereof,
it shall deliver to the Trustee a completed Security Supplement, together with
all supplements to Schedules hereto, reflecting such new Pledged Collateral and
all other Pledged Collateral. Notwithstanding the foregoing, it is understood
and agreed that the Security Interest of the Trustee shall attach to all Pledged
Collateral immediately upon the Pledgor’s acquisition of rights therein and
shall not be affected by the failure of the Pledgor to deliver a supplement to
Schedule 3.5 as required hereby.     (c)   The Pledgor hereby covenants and
agrees that it shall enforce all of its rights with respect to any Pledged
Collateral.     (d)   The Certificated Securities referred to in Section 3.5(d)
shall be held by the Trustee in the State of New York. With respect to any
Pledged Collateral constituting Certificated Securities acquired or pledged
after the date hereof, immediately, and in any event within ten days of the
Pledgor acquiring rights therein, the Pledgor shall deliver or cause to be
delivered to the Trustee all such Certificated Securities, stock powers duly
executed in blank or other instruments of transfer reasonably satisfactory to
the Trustee in the State of New York (which Certificated Securities and stock
powers shall be held by the Trustee in the State of New York) and all such
instruments and documents as the Trustee may reasonably request in order to give
effect to the pledge granted hereby.     (e)   Upon the occurrence and during
the continuance of an Enforcement Event, the Trustee shall have the right,
without notice to the Pledgor, to transfer all or any portion of the Pledged
Collateral to its name or the name of its nominee or agent. In addition, upon
the occurrence and during the continuance of an Enforcement Event, the Trustee
shall have the right at any time, without notice to the Pledgor, to exchange any
certificates representing Pledged Collateral for certificates of smaller or
larger denominations.     (f)   Voting and Distributions

  (i)   So long as no Enforcement Event shall have occurred and shall be
continuing:

  (A)   except as otherwise provided in this Section 4.3 or elsewhere herein,
the Pledgor shall be entitled to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement
or the other Transaction Documents; provided, however, that the Pledgor will not
be entitled to exercise any such right if the result thereof could materially
and adversely affect the rights inuring to a holder of the Pledged Collateral or
the rights and remedies of any of the Secured Creditors under this Agreement or
any other Transaction Document or the ability of the Secured Creditors to
exercise the same;     (B)   the Trustee shall promptly execute and deliver (or
cause to be executed and delivered) to the Pledgor all proxies and other
instruments as the Pledgor may from time to time reasonably request for the
purpose of enabling the Pledgor to exercise the voting and other consensual
rights when and to the extent that it is entitled to exercise the same pursuant
to

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      clause (f)(i)(A) above and to receive the cash Dividends that it is
entitled to receive pursuant to clause (f)(i)(C) below; and     (C)   the
Pledgor shall be entitled to receive and retain any and all ordinary cash
Dividends, Securities or other property paid on the Pledged Collateral to the
extent and only to the extent that such ordinary cash Dividends, Securities or
other property are permitted by, and otherwise paid in accordance with, the
terms and conditions of the Transaction Documents and applicable laws, and all
such distributions received by the Pledgor in accordance with this sentence
shall be free of the pledge and Security Interests created hereunder and shall
not constitute Collateral. All noncash Dividends, Securities or other property,
and all distributions, Securities or other property paid or payable in cash or
otherwise in connection with a partial or total liquidation or dissolution,
return of capital, capital surplus or paid-in surplus, and all other
distributions (other than distributions referred to in the preceding sentence)
made on or in respect of the Pledged Collateral, whether paid or payable in cash
or otherwise, whether resulting from a subdivision, combination or
reclassification of the outstanding Stock of the issuer of any Pledged
Collateral or received in exchange for Pledged Collateral or any part thereof,
or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Collateral without any further
action. The Pledgor shall immediately take all steps, if any, required,
necessary or desirable to ensure the validity, perfection, priority and, if
applicable, “control” (as defined in Article 8 or Article 9 of the UCC, as
applicable) of the Trustee over such Dividends, Securities or other property, in
each case referred to in the immediately preceding sentence (including delivery
thereof to the Trustee), and pending any such action the Pledgor shall be deemed
to hold such Dividends, Securities or other property in trust for the benefit of
the Trustee, and the same shall be segregated from all other property of the
Pledgor.

  (ii)   Upon the occurrence and during the continuance of an Enforcement Event:

  (A)   all rights of the Pledgor to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant hereto shall cease, and all such rights shall thereupon become
vested in the Trustee who shall thereupon have the sole right to exercise such
voting and other consensual rights;     (B)   in order to permit the Trustee to
exercise the voting and other consensual rights that it may be entitled to
exercise pursuant hereto and to receive all distributions that it may be
entitled to receive hereunder: (1) the Pledgor shall promptly execute and
deliver (or cause to be executed and delivered) to the Trustee all proxies,
payment orders and other instruments as the Trustee may from time to time
reasonably

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      request and (2) the Pledgor acknowledges that the Trustee may utilize the
power of attorney set forth in Section 6; and     (C)   all rights of the
Pledgor to distributions and other amounts that the Pledgor is authorized to
receive pursuant to clause (f)(i)(C) above shall cease, and all such rights
shall thereupon become vested in the Trustee, which shall have the sole and
exclusive right and authority to receive and retain such distributions and other
amounts.

  (g)   If all Enforcement Events have been rescinded, the Pledgor will have the
right to exercise the voting and consensual rights and powers that it is
entitled to exercise pursuant to the terms of clause (f)(i) above and to receive
the Dividends, Securities and other property that it is entitled to receive
pursuant to clause (f)(i) above.

SECTION 5
FURTHER ASSURANCES
Section 5.1 Further Assurances

  (a)   The Pledgor agrees that from time to time, at its expense, it shall
promptly execute and deliver all further instruments and documents and take all
further action that may be necessary or desirable, or that the Trustee may
reasonably request, in order to create and/or maintain the validity, perfection
or priority of and protect any Security Interest granted or purported to be
granted hereby or to enable the Trustee to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Pledgor shall:

  (i)   execute, acknowledge, deliver and cause to be duly filed all such
further instruments, documents, indorsements, powers of attorney or notices, and
take all such actions as may be necessary or desirable, or as the Trustee may
from time to time reasonably request, to preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing statements or other documents in connection herewith or
therewith; and     (ii)   at the Trustee’s request, appear in and defend any
action or proceeding that may affect the Pledgor’s title to or the Trustee’s
Security Interest in all or any material part of the Collateral.

  (b)   The Pledgor hereby authorizes the Trustee to file a Record or Records,
including financing statements, continuation statements and, in each case,
amendments thereto, in all jurisdictions and with all filing offices as the
Trustee may determine, in its sole discretion, are necessary or advisable to
perfect the Security Interest granted to the Trustee herein, without the
signature of the Pledgor. Such financing statements may describe the Collateral
in the same manner as described herein or may contain an indication or
description of the Collateral that describes such property in any other manner
as the Trustee may determine, in its sole discretion, is necessary, advisable or

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      prudent to ensure the perfection of the Security Interest in the
Collateral granted to the Trustee herein. The Pledgor agrees that a photographic
or other reproduction of this Agreement or of a financing statement shall be
sufficient as a financing statement and may be filed as a financing statement in
any and all jurisdictions.

The Pledgor shall, through compliance with the covenants contained herein and
through any other actions that may be necessary or desirable, continuously
maintain from the date made the truthfulness and accuracy of every
representation, warranty and certification made herein until the termination of
this Agreement by its terms.
SECTION 6
TRUSTEE APPOINTED ATTORNEY-IN-FACT
Section 6.1 Power of Attorney

  (a)   The Pledgor hereby irrevocably makes, constitutes and appoints the
Trustee (and all officers, employees or agents designated by the Trustee), until
such time as this Agreement terminates under Section 9.14, as the Pledgor’s true
and lawful agent and attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor, the Trustee or otherwise,
from time to time in the Trustee’s discretion, to take any action and to execute
any instrument that the Trustee may deem reasonably necessary or advisable to
accomplish the purposes of this Agreement, including the following:

  (i)   upon the occurrence of an Enforcement Event,

  (A)   to receive, endorse, assign, collect and deliver any and all notes,
acceptances, checks, drafts, money orders or other instruments, documents and
Chattel Paper or other evidences of payment relating to the Collateral;     (B)
  to ask for, demand, collect, sue for, recover, compound, receive payment of,
give receipt for and give discharges and releases of all or any of the
Collateral;     (C)   to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral;     (D)   to settle, compromise, compound,
adjust or defend any claims, actions, suits or proceedings relating to all or
any of the Collateral;     (E)   to use, sell, assign, transfer, pledge, make
any agreement with respect to or otherwise deal with all or any of the
Collateral;

  (ii)   to prepare and file Records (including UCC financing statements) as
further described in Section 5.1(b);     (iii)   to take or cause to be taken
all actions necessary to perform or comply or cause performance or compliance
with the terms of this Agreement, including to pay or

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      discharge taxes or Liens levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Trustee in its sole discretion, any
such payments made by the Trustee to become obligations of the Pledgor to the
Trustee, due and payable immediately without demand; and     (iv)   generally to
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Trustee were
the absolute owner thereof for all purposes, and to do, at the Trustee’s option
and the Pledgor’s expense, at any time or from time to time, all acts and things
that the Trustee deems reasonably necessary to protect, preserve or realize upon
the Collateral and the Trustee’s Security Interest therein in order to effect
the intent of this Agreement, all as fully and effectively as the Pledgor might
do.

  (b)   Notwithstanding anything in this Section 6.1 to the contrary, the
Trustee agrees that it will not exercise any rights under the power of attorney
provided for in Section 6.1(a)(i) or (iv) unless an Enforcement Event has
occurred and is continuing.

Section 6.2 No Duty on the Part of Trustee or Secured Creditors
Notwithstanding any other provision of this Agreement, nothing herein contained
shall be construed as requiring or obligating the Trustee or any other Secured
Creditor to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Trustee or any Secured Creditor, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken or omitted to be
taken by the Trustee or any Secured Creditor with respect to the Collateral or
any part thereof shall give rise to any defense, counterclaim or offset in favor
of the Pledgor or to any claim or action against the Trustee or any Secured
Creditor. It is understood and agreed that the appointment of the Trustee as the
agent and attorney-in-fact of the Pledgor for the purposes set forth above is
coupled with an interest and is irrevocable. The provisions of this Section
shall in no event relieve the Pledgor of any of its obligations hereunder or
under any other Transaction Document with respect to the Collateral or any part
thereof or impose any obligation on the Trustee or any Secured Creditor to
proceed in any particular manner with respect to the Collateral or any part
thereof, or in any way limit the exercise by the Trustee or any Secured Creditor
of any other or further right that it may have on the date of this Agreement or
hereafter, whether hereunder, under any other Transaction Document, by law or
otherwise. The Trustee and the Secured Creditors shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents shall
be responsible to the Pledgor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.

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SECTION 7
REMEDIES
Section 7.1 Remedies Upon Enforcement Event

  (a)   Upon the occurrence and during the continuance of an Enforcement Event,
the Trustee may exercise in respect of the Collateral, in addition to all other
rights and remedies provided for herein or otherwise available to it at law or
in equity, all the rights and remedies of a secured party on default under the
UCC (whether or not the UCC applies to the affected Collateral) or any other
applicable law, and also may, without prior notice except as specified below,
sell, assign, lease, license (on an exclusive or non-exclusive basis) or
otherwise dispose of the Collateral or any part thereof in one or more parcels
at public or private sale or at any broker’s board or on any securities
exchange, at any of the Trustee’s offices or elsewhere, for cash, on credit or
for future delivery, at such time or times and at such price or prices and upon
such other terms as the Trustee may deem commercially reasonable; provided that
(i) the Trustee shall be authorized at any such sale (if it deems it advisable
to do so) to restrict the prospective bidders or purchasers to Persons who will
represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or sale thereof,
(ii) upon consummation of any such sale the Trustee shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold, (iii) each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of the
Pledgor, and (iv) the Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay, valuation and appraisal that the Pledgor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.     (b)   The Trustee or any Secured Creditor may be the
purchaser of any or all of the Collateral at any sale thereof and the Trustee,
as collateral agent for and representative of the Secured Creditors, shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by the Trustee at such sale.    
(c)   The Pledgor hereby waives notice of the time and place of any public sale
or the time after which any private sale or other disposition of all or any part
of the Collateral may be made. To the extent such notice may not be waived under
applicable law, any notice made shall be deemed reasonable if sent to the
Pledgor, addressed as set forth in the notice provisions of the Deed of Charge,
at least ten days prior to (i) the date of any such public sale or (ii) the time
after which any such private sale or other disposition may be made. Such notice,
in the case of a public sale, shall state the time and place for such sale and,
in the case of a sale at a broker’s board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or portion thereof, will first be offered for sale at such
board or exchange. Any such public sale shall be held at such time or times
during ordinary business hours and at such place or places as the Trustee may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be

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      sold may be sold in one lot as an entirety or in separate parcels, as the
Trustee may (in its sole and absolute discretion) determine. The Trustee shall
not be obligated to make any sale of any Collateral if it shall determine not to
do so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Trustee may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Trustee until the sale price is paid by the purchaser or purchasers thereof, but
the Trustee shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold, and in case
of any such failure, such Collateral may be sold again upon like notice. For
purposes hereof, a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof; the Trustee shall be free to carry
out such sale pursuant to such agreement and the Pledgor shall not be entitled
to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Trustee shall have entered into such an
agreement all Events of Default shall have been remedied and the Secured
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Trustee may proceed by a suit or suits at law or
in equity to foreclose upon the Collateral and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. The Pledgor hereby waives any claims against the Trustee arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price that might have been obtained at a
public sale, even if the Trustee accepts the first offer received and does not
offer such Collateral to more than one offeree.     (d)   If the Proceeds of any
sale or other disposition of the Collateral are insufficient to pay the entire
outstanding amount of the Secured Obligations, the Pledgor shall be liable for
the deficiency and the fees of any attorneys employed by the Trustee to collect
such deficiency. The Pledgor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Trustee, that the Trustee has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgor, and the Pledgor
hereby waives and agrees not to assert any defenses in an action for specific
performance of such covenants except for a defense that no default has occurred
giving rise to the Secured Obligations becoming due and payable prior to their
stated maturities. Nothing in this Section shall in any way alter the rights of
the Trustee hereunder.     (e)   The Trustee may sell the Collateral without
giving any warranties as to the Collateral. The Trustee may specifically
disclaim any warranties of title or the like. This procedure will not be
considered to adversely affect the commercial reasonableness of any sale of the
Collateral.     (f)   The Trustee shall have no obligation to marshal any of the
Collateral.

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Section 7.2 Application of Proceeds
The Trustee shall apply the Proceeds of any collection or sale of the Collateral
as provided in the Deed of Charge. Upon any sale of the Collateral by the
Trustee (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt by the Trustee or of the officer making the
sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Trustee or such officer or be answerable in any way for the misapplication
thereof. Any Proceeds received by the Pledgor shall be held in trust for and
forthwith paid over to the Trustee. All Proceeds received by the Trustee
hereunder shall be held by the Trustee in a Cash Collateral Account. All
Proceeds while held by the Trustee (or by the Pledgor in trust for the Trustee)
shall continue to be held by the Trustee (for itself and for the benefit of the
Secured Creditors) as collateral security for the Secured Obligations and shall
not constitute payment thereof until applied as provided in the Deed of Charge.
Section 7.3 Securities Act, Etc.
The Pledgor understands that compliance with the Federal Securities Laws might
very strictly limit the course of conduct of the Trustee if the Trustee were to
attempt to dispose of all or any part of the Pledged Collateral, and might also
limit the extent to which or the manner in which any subsequent transferee of
any Pledged Collateral could dispose of the same. Similarly, there may be other
legal restrictions or limitations affecting the Trustee in any attempt to
dispose of all or part of the Pledged Collateral under applicable blue sky or
other state securities laws or similar laws analogous in purpose or effect. The
Pledgor recognizes that in light of such restrictions and limitations the
Trustee may, with respect to any sale of the Pledged Collateral, limit the
purchasers to those who will agree, among other things, to acquire such Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges and agrees that in
light of such restrictions and limitations, the Trustee, in its sole and
absolute discretion exercised in good faith and in accordance with applicable
laws, (a) may proceed to make such a sale whether or not a registration
statement for the purpose of registering such Pledged Collateral or part thereof
has been filed under the Federal Securities Laws and (b) may approach and
negotiate with a single potential purchaser to effect such sale. The Pledgor
acknowledges and agrees that any such sale might result in prices and other
terms less favorable to the seller than if such sale were a public sale without
such restrictions. In the event of any such sale, the Trustee shall incur no
responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Trustee, in its sole and absolute discretion, may
in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the
sale were deferred until after registration as aforesaid or if more than a
single purchaser were approached. The provisions of this Section 7.3 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices might exceed substantially the price at which the
Trustee sells.
SECTION 8
STANDARD OF CARE; TRUSTEE MAY PERFORM
The powers conferred on the Trustee hereunder are solely intended to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Trustee shall have no duty as to any Collateral or as to the
taking

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of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. The Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Trustee accords its own property. Neither the Trustee nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or otherwise. If the Pledgor fails to
perform any agreement contained herein, the Trustee may itself perform, or cause
performance of, such agreement, and the expenses of the Trustee incurred in
connection therewith shall be payable by the Pledgor.
SECTION 9
MISCELLANEOUS
Section 9.1 Notices
All communications and notices hereunder shall (except as otherwise expressly
permitted herein) be in writing and given as provided in the notice provisions
of the Deed of Charge.
Section 9.2 Security Interests Absolute
All rights of the Trustee hereunder, the Security Interests and all obligations
of the Pledgor hereunder shall be absolute and unconditional irrespective of
(a) any lack of validity or enforceability of the Deed of Charge, any other
Transaction Document, any agreement with respect to any of the Secured
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Deed of Charge, any other
Transaction Document or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other collateral, or any release or
amendment or waiver of or consent under or departure from any security document
or guarantee securing or guaranteeing all or any of the Secured Obligations, or
(d) any other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Pledgor in respect of the Secured Obligations or this
Agreement (other than the indefeasible payment in full in cash of the Secured
Obligations)
Section 9.3 Survival of Agreement
All representations and warranties made by the Pledgor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Creditors and shall survive the issuance of the Bonds, regardless of any
investigation made by the Secured Creditors or on their behalf, and shall
continue in full force and effect until this Agreement shall terminate.
Section 9.4 Binding Effect
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns,
except that the Pledgor may not assign or otherwise transfer any of its rights
or obligations hereunder or any interest in the Collateral (and any such
assignment or transfer shall be null and void) except as expressly contemplated
by this Agreement or the Deed of Charge.

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Section 9.5 Successors and Assigns
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Pledgor or the
Trustee that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns.
Section 9.6 Trustee’s Fees and Expenses; Indemnification

  (a)   The Pledgor agrees to pay upon demand to the Trustee the amount of any
and all out-of-pocket expenses, including the fees, disbursements and other
charges of its counsel (including allocated costs of internal counsel and costs
of settlement) and of any experts or agents, that the Trustee may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon, any
of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Trustee hereunder or (iv) the failure of the Pledgor to perform or
observe any of the provisions hereof.     (b)   Without limitation of its
indemnification obligations under the other Transaction Documents, the Pledgor
agrees to indemnify the Trustee and the other Indemnified Parties against, and
hold each of them harmless from, any and all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments, suits, costs, disbursements
and expenses of any kind or nature (including fees and disbursements of counsel
to the Trustee or any other Indemnified Party), which may be imposed on,
incurred by or asserted against any such Indemnified Party in connection with or
arising out of any investigation, litigation or proceeding, whether or not the
Trustee or any other Indemnified Party is a party thereto, whether direct,
indirect, or consequential and whether based on any federal, state or local law,
statute or regulation, securities or commercial law or regulation, or under
common law or in equity, or in contract, tort or otherwise, in any manner
relating to or arising out of this Agreement, or any act, event or transaction
related or attendant to any thereof, or in connection with any investigation of
any potential matter covered hereby (collectively, the “Indemnified Matters”);
provided, however, that the Pledgor shall not have any obligation under this
Section 9.6(b) to the Trustee or any other Indemnified Party with respect to any
Indemnified Matter resulting primarily from the gross negligence or willful
misconduct of the Trustee or any other Indemnified Party, as determined by a
court of competent jurisdiction in a final non appealable judgment or order. In
addition, the Pledgor shall not be obligated to indemnify any Indemnified Party
for any Indemnified Matter claimed by one or more Indemnified Parties against
one or more other Indemnified Parties.     (c)   Any such amounts payable as
provided hereunder shall constitute additional Secured Obligations secured
hereby. The provisions of this Section 9.6 shall remain operative and in full
force and effect regardless of the termination of this Agreement or any other
Transaction Document, the consummation of the transactions contemplated hereby,
the repayment of any of the Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Transaction Document or any investigation made by or on behalf of the Trustee or
any Secured Creditor. All amounts due under this Section 9.6 shall be payable on
written demand therefor. The Pledgor agrees that any indemnification or other
protection provided to any Indemnified Party

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      pursuant to this Agreement shall (i) survive payment in full of the
Secured Obligations and (ii) inure to the benefit of any Person who was at any
time a Trustee or Indemnified Party under this Agreement.     (d)   The Pledgor
agrees that neither the Trustee nor any Indemnified Party shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to the
Pledgor or any of its subsidiaries or any of its equity holders or creditors for
or in connection with the transactions contemplated hereby and in the other
Transaction Documents, except to the extent such liability is found in a final
judgment by a court of competent jurisdiction to have resulted primarily from
the Trustee’s or such Indemnified Party’s gross negligence or willful
misconduct. In no event, however, shall the Trustee or any Indemnified Party be
liable on any theory of liability for any special, indirect, consequential or
punitive damages, and the Pledgor hereby waives, releases and agrees (for itself
and on behalf of its subsidiaries) not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

Section 9.7 Governing Law
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
Section 9.8 Waivers; Amendment

  (a)   No failure on the part of the Trustee to exercise and no delay in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Trustee and the Secured Creditors
hereunder and under the other Transaction Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provisions of this Agreement or any other Transaction Document or consent to
any departure by the Pledgor therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on the Pledgor in any case shall entitle the
Pledgor to any other or further notice or demand in similar or other
circumstances.     (b)   Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Trustee and the Pledgor, subject to any consent
required in accordance with the Transaction Documents.

Section 9.9 Waiver of Jury Trial
EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT OR THE TRANSACTIONS

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CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.9.
Section 9.10 Severability
Any provision of this Agreement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
Section 9.11 Execution in Counterparts
This Agreement may be executed in any number of counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an
original, but all of which taken together shall constitute a single contract.
This Agreement shall become effective when it shall have been executed by the
Trustee and the Pledgor. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
Section 9.12 Section Titles
The Section titles contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.
Section 9.13 Jurisdiction; Consent to Service of Process

  (a)   The Pledgor hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the courts of New York
State sitting in New York County and of the United States District Court for the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the fullest extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Transaction Document shall affect any right that the Trustee or any
Secured Creditor may otherwise have to bring any action or proceeding relating
to this Agreement or any other Transaction Document against the Pledgor or any
of its property in the courts of any jurisdiction.     (b)   The Pledgor hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable law, any objection that it may now or hereafter have to the laying of
venue of any action or proceeding arising out of or relating to this Agreement
or the

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      other Transaction Documents in any court referred to in paragraph (a) of
this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.     (c)   The
Pledgor hereby irrevocably designates and appoints CT Corporation System, 111
Eighth Avenue, New York, New York 10011 as the agent of the Pledgor to receive
on its behalf service of all process brought against it with respect to any such
proceeding in any such court in the State of New York, such service being hereby
acknowledged by the Pledgor to be effective and binding on it in every respect.
If for any reason such agent shall cease to be available to act as such, then
the Pledgor shall promptly designate a new agent in the Borough of Manhattan in
The City of New York. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.

Section 9.14 Termination
This Agreement and the Security Interest shall terminate when all Secured
Obligations then due and owing have been indefeasibly paid in full in cash, at
which time the Trustee shall execute and deliver to the Pledgor, at the
Pledgor’s expense, all UCC termination statements, releases and similar
documents that the Pledgor shall reasonably request to evidence such
termination. Any execution and delivery of termination statements, releases or
other documents pursuant to this Section 9.14 shall be without recourse to or
warranty by the Trustee.
[Remainder of page intentionally left blank]

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In Witness Whereof, the Pledgor and the Trustee have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

          The Shaw Group Inc., as Pledgor    
 
       
By:
       
 
 
 
Name:    
 
  Title:    
 
        The Bank of New York, as Trustee    
 
       
By:
       
 
 
 
Name:    
 
  Title:    

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Schedule 3.2
To the Parent Pledge Agreement
Names and Locations
Names

                  Grantor’s               Jurisdiction of organization correct  
Previous   Additional       and organizational legal name:   names:   names:  
Federal TIN:   identification number:
 
               

Locations

      ` Grantor’s     correct     legal name:   Location of chief executive
office
 
   

Changes in Identity or Organizational Structure

      Grantor’s     correct     legal name:   Description of structural changes:
 
   

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Schedule 3.3
To the Parent Pledge Agreement
Filings

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Schedule 3.5
To the Parent Pledge Agreement
Pledged LLC Interests

2

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EXHIBIT A
TO THE PARENT PLEDGE AGREEMENT
FORM OF SECURITY SUPPLEMENT
This SECURITY SUPPLEMENT, dated as of [                    ], 20[___], is
delivered pursuant to the Parent Pledge Agreement, dated October 13, 2006 (as it
may from time to time be amended, modified or supplemented, the “Parent Pledge
Agreement”), between The Shaw Group Inc., a Louisiana corporation (the
“Pledgor”), and The Bank of New York, as security agent for the Secured
Creditors (herein in such capacity, the “Trustee”).
The Pledgor confirms as set forth in the Parent Pledge Agreement that it
pledges, assigns, transfers and grants to the Trustee, for its benefit and for
the benefit of the Secured Creditors, a continuing security interest in and Lien
on all of its right, title and interest in, to and under the Collateral, in each
case whether now owned or existing or hereafter acquired or arising and wherever
located, as security for the prompt and complete payment and performance in full
when due (whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code) of all Secured Obligations.
The Pledgor represents and warrants that the attached Supplements to Schedules
accurately and completely set forth all additional information required pursuant
to the Parent Pledge Agreement and hereby agrees that such Supplements to
Schedules shall constitute part of the Schedules to the Parent Pledge Agreement.
Capitalized terms used but not defined herein shall have the respective meanings
ascribed thereto in the Parent Pledge Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Security Supplement to be duly
executed and delivered by its duly authorized officer as of
[                    , 20___].

          The Shaw Group Inc., as Pledgor    
 
       
By:
       
 
 
 
Name:    
 
  Title:    

3

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EXHIBIT B
TO THE PARENT PLEDGE AGREEMENT
SEARCH REPORTS

4

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EXHIBIT C
TO THE PARENT PLEDGE AGREEMENT
FINANCING STATEMENTS

5

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Table of Contents

              Contents         Page   SECTION 1 DEFINITIONS; RULES OF
INTERPRETATION     2   
 
           
Section 1.1
  Definition of Terms Used Herein     2   
Section 1.2
  UCC Terms used herein that are defined in the UCC but not defined herein have
the meanings given to        
 
  them in the UCC, including the following which are capitalized herein:     2 
 
Section 1.3
  General Definitions In this Agreement:     2   
Section 1.4
  Rules of Interpretation     4   
Section 1.5
  Certain Terms     4   
 
            SECTION 2 GRANT OF SECURITY     5   
 
           
Section 2.1
  Grant of Security     5   
Section 2.2
  Separate and Distinct Grants of Security     5   
 
            SECTION 3 REPRESENTATIONS AND WARRANTIES     6   
 
           
Section 3.1
  Title     6   
Section 3.2
  Names, Locations     6   
Section 3.3
  Filings, Consents     6   
Section 3.4
  Security Interests     7   
Section 3.5
  Pledged Collateral     7   
 
            SECTION 4 COVENANTS     8   
 
           
Section 4.1
  Change of Name; Location of Collateral; Place of Business     8   
Section 4.2
  Protection of Security     8   
Section 4.3
  Pledged Collateral     8   
 
            SECTION 5 FURTHER ASSURANCES;     11   
 
           
Section 5.1
  Further Assurances     11   
 
            SECTION 6 SECURITY AGENT APPOINTED ATTORNEY-IN-FACT     12   
 
           
Section 6.1
  Power of Attorney     12   
Section 6.2
  No Duty on the Part of Trustee or Secured Creditors     13   
 
            SECTION 7 REMEDIES     14   
 
           
Section 7.1
  Remedies Upon Enforcement Event     14   
Section 7.2
  Application of Proceeds     16   
Section 7.3
  Securities Act, Etc.     16   
 
            SECTION 8 STANDARD OF CARE; SECURITY AGENT MAY PERFORM     16   
 
            SECTION 9 MISCELLANEOUS     17   
 
           
Section 9.1
  Notices     17   
Section 9.2
  Security Interests Absolute     17   
Section 9.3
  Survival of Agreement     17   
Section 9.4
  Binding Effect     17   
Section 9.5
  Successors and Assigns     18   
Section 9.6
  Trustee’s Fees and Expenses; Indemnification     18   
Section 9.7
  Governing Law     19   

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              Contents         Page  
Section 9.8
  Waivers; Amendment     19   
Section 9.9
  Waiver of Jury Trial     19   
Section 9.10
  Severability     20   
Section 9.11
  Execution in Counterparts     20   
Section 9.12
  Section Titles     20   
Section 9.13
  Jurisdiction; Consent to Service of Process     20   
Section 9.14
  Termination     21   
 
           
EXHIBIT A
  FORM OF SECURITY SUPPLEMENT        
 
           
EXHIBIT B
  SEARCH REPORTS        
 
           
EXHIBIT C
  FINANCING STATEMENTS        

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