Exhibit 10.4

 

COLLATERAL AGREEMENT

 

dated and effective as of

 

November 29, 2016,

 

among

 

EP ENERGY LLC,

 

each Subsidiary of EP Energy LLC identified herein,

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Collateral Agent

 

THIS COLLATERAL AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE ADDITIONAL
PRIORITY LIEN INTERCREDITOR AGREEMENT (AS DEFINED HEREIN), AS SET FORTH MORE
FULLY IN SECTION 5.15 HEREOF.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY,
THE LIENS AND SECURITY INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT
OF THE SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT
OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE
SUBJECT TO THE PROVISIONS OF THE ADDITIONAL PRIORITY LIEN INTERCREDITOR
AGREEMENT.

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I.

 

 

 

DEFINITIONS

 

 

 

SECTION 1.01.

Indenture

3

SECTION 1.02.

Other Defined Terms

3

 

 

 

ARTICLE II.

 

 

 

PLEDGE OF SECURITIES

 

 

 

SECTION 2.01.

Pledge

10

SECTION 2.02.

Delivery of the Pledged Collateral

11

SECTION 2.03.

Representations, Warranties and Covenants

12

SECTION 2.04.

Certification of Limited Liability Company and Limited Partnership Interests

13

SECTION 2.05.

Registration in Nominee Name; Denominations

14

SECTION 2.06.

Voting Rights; Dividends and Interest, etc.

14

 

 

 

ARTICLE III.

 

 

 

SECURITY INTERESTS IN PERSONAL PROPERTY

 

 

 

SECTION 3.01.

Security Interest

16

SECTION 3.02.

Representations and Warranties

19

SECTION 3.03.

Covenants

20

SECTION 3.04.

Other Actions

23

SECTION 3.05.

Covenants Regarding Patent, Trademark and Copyright Collateral

23

 

 

 

ARTICLE IV.

 

 

 

REMEDIES

 

 

 

SECTION 4.01.

Remedies upon Default

25

SECTION 4.02.

Application of Proceeds

26

SECTION 4.03.

Grant of License to Use Intellectual Property

27

SECTION 4.04.

Securities Act, etc.

28

 

 

 

ARTICLE V.

 

 

 

MISCELLANEOUS

 

 

 

SECTION 5.01.

Notices

28

SECTION 5.02.

Security Interest Absolute

29

 

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SECTION 5.03.

Limitation by Law

29

SECTION 5.04.

Binding Effect; Several Agreement

29

SECTION 5.05.

Successors and Assigns

29

SECTION 5.06.

Agent’s Fees and Expenses; Indemnification

30

SECTION 5.07.

Agent Appointed Attorney-in-Fact

30

SECTION 5.08.

GOVERNING LAW

31

SECTION 5.09.

Waivers; Amendment

31

SECTION 5.10.

Severability

32

SECTION 5.11.

Counterparts

32

SECTION 5.12.

Headings

32

SECTION 5.13.

Termination or Release

33

SECTION 5.14.

Additional Subsidiaries

34

SECTION 5.15.

Subject to Additional Priority Lien Intercreditor Agreement

34

SECTION 5.16.

First-Priority Lien Obligations Documents

35

SECTION 5.17.

Other Second-Priority Lien Obligations

35

SECTION 5.18.

WAIVER OF JURY TRIAL

35

SECTION 5.19.

Jurisdiction; Consent to Service of Process

36

SECTION 5.20.

Other Agreements

36

 

 

 

Schedules

 

 

Schedule I

Subsidiary Parties

 

Schedule II

Pledged Stock; Debt Securities

 

Schedule III

Intellectual Property

 

 

 

 

Exhibits

 

 

Exhibit I

Form of Supplement to the Collateral Agreement

 

Exhibit II

Form of Perfection Certificate

 

 

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This COLLATERAL AGREEMENT dated and effective as of November 29, 2016 (as
amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), is among EP ENERGY LLC, a Delaware limited liability company (the
“Issuer”), each Subsidiary of the Issuer listed on Schedule I hereto and each
Subsidiary of the Issuer that becomes a party hereto after the date hereof
(each, a “Subsidiary Party”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, as
Collateral Agent (in such capacity, the “Agent” or the “Collateral Agent”) for
the Secured Parties (as defined in Section 1.02 below).

 

WHEREAS, pursuant to the Indenture, dated as of November 29, 2016 (as amended,
restated, supplemented, waived or otherwise modified from time to time, the
“Indenture”), among the Issuer and Everest Acquisition Finance Inc., as
co-issuers (the “Co-Issuers”), the guarantors from time to time party thereto
and Wilmington Trust, National Association, as trustee (in such capacity, the
“Trustee”) and the Collateral Agent, the Co-Issuers are issuing 8.00% Senior
Secured Notes due 2024 (together with any and all additional notes issued
pursuant to the Indenture, the “Notes”);

 

WHEREAS, (1) pursuant to the Credit Agreement, dated as of May 24, 2012 (as
amended, restated, supplemented, waived or otherwise modified from time to time,
the “Credit Agreement”), among EPE Holdings LLC (“Holdings”), the Issuer,
JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the
lenders from time to time parties thereto, the Issuer will from time to time
incur loans and letter of credit obligations and (2) pursuant to the Collateral
Agreement, dated as of May 24, 2012, among the Pledgors, Holdings and JPMorgan
Chase Bank, N.A., the Pledgors have granted to JPMorgan Chase Bank, N.A., as the
RBL Facility Agent, a first-priority lien and security interest in the
Collateral to secure their obligations under the Credit Agreement and related
documents;

 

WHEREAS, pursuant to the Term Loan Agreement, dated as of April 24, 2012 (as
amended, restated, supplemented, waived or otherwise modified from time to time,
the “Junior Term Loan Agreement”), among the Issuer, the lenders and agents
party thereto from time to time and Citibank, N.A., as administrative agent and
collateral agent, the Issuer has previously incurred Loans (as defined therein,
the “Junior Term Loans”);

 

WHEREAS, (1) pursuant to the Term Loan Agreement, dated as of August 24, 2016
(as amended, restated, supplemented, waived or otherwise modified from time to
time, the “1.5 Lien Term Loan Agreement”), among the Issuer, the lenders party
thereto from time to time and Citibank, N.A., as administrative agent and
collateral agent, the Issuer has previously incurred Loans (as defined therein)
and (2) pursuant to the Collateral Agreement, dated as of August 24, 2016, among
the Pledgors and Citibank, N.A., the Pledgors have granted to Citibank, N.A., as
collateral agent, a lien and security interest in the Collateral to secure their
obligations under the 1.5 Lien Term Loan Agreement and related documents;

 

WHEREAS, pursuant to the Additional Priority Lien Intercreditor Agreement, dated
as of the date hereof (as amended, restated, supplemented, waived or otherwise
modified from time to time, the “Additional Priority Lien Intercreditor
Agreement”), among JPMorgan Chase Bank, N.A., as RBL Facility Agent and
Applicable First Lien Agent, Wilmington Trust, National Association, as Notes
Facility Agent and Applicable Second Lien Agent (as such terms

 

1

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are defined in the Additional Priority Lien Intercreditor Agreement), the
Issuer, the Subsidiaries of the Issuer named therein and the other parties
thereto, the liens upon and security interest in the Collateral granted by this
Agreement are and shall be subordinated in all respects to the liens upon and
security interest in the Collateral granted pursuant to, and subject to the
terms and conditions of, the Credit Agreement and other First-Priority Lien
Obligations Documents;

 

WHEREAS, pursuant to the Amended and Restated Senior Lien Intercreditor
Agreement, dated as of August 24, 2016 (as amended, restated, supplemented,
waived or otherwise modified from time to time, the “Senior Lien Intercreditor
Agreement”), among JPMorgan Chase Bank, N.A., as RBL Facility Agent and
Applicable First Lien Agent, Citibank, N.A., as Term Facility Agent and
Applicable Second Lien Agent (as such terms are defined in the Senior Lien
Intercreditor Agreement), Citibank, N.A., as Priority Lien Term Facility Agent
(as such term is defined in the Senior Lien Intercreditor Agreement), Wilmington
Trust, National Association, as an Other First-Priority Lien Obligations Agent
(as such term is defined in the Senior Lien Intercreditor Agreement), the
Issuer, the Subsidiaries of the Issuer named therein and the other parties
thereto, the liens upon and security interest in the Collateral granted by this
Agreement are and shall be prior in all respects to the liens upon and security
interest in the Collateral granted pursuant to, and subject to the terms and
conditions of, the Junior Lien Term Loan Agreement and other Second-Priority
Lien Obligations Documents (as defined in the Senior Lien Intercreditor
Agreement);

 

WHEREAS, pursuant to the Priority Lien Intercreditor Agreement dated as of
August 24, 2016 (as amended, restated, supplemented, waived or otherwise
modified from time to time, the “Priority Lien Intercreditor Agreement”), among
JPMorgan Chase Bank, N.A., as RBL Facility Agent and Applicable First Lien
Agent, Citibank, N.A., as Term Facility Agent and Applicable Second Lien Agent
(as such terms are defined in the Priority Lien Intercreditor Agreement),
Wilmington Trust, National Association, as an Other First-Priority Lien
Obligations Agent (as such term is defined in the Priority Lien Intercreditor
Agreement), the Issuer, the Subsidiaries of the Issuer named therein and the
other parties thereto, the liens upon and security interest in the Collateral
granted by this Agreement are and shall be prior in all respects to the liens
upon and security interest in the Collateral granted pursuant to, and subject to
the terms and conditions of, the 1.5 Lien Term Loan Agreement and other
Second-Priority Lien Obligations Documents (as defined in the Priority Lien
Intercreditor Agreement);

 

WHEREAS, each Pledgor is executing and delivering this Agreement pursuant to the
terms of the Indenture and any applicable Other Second-Priority Lien Obligations
Document to induce the holders of the Notes to purchase the Notes and the
holders of any Other Second-Priority Lien Obligations to make their respective
extensions of credit thereunder; and

 

WHEREAS, the Subsidiary Parties are Subsidiaries of the Issuer, will derive
substantial benefits from the extension of credit to the Co-Issuers pursuant to
the Indenture and any Other Second-Priority Lien Obligations Documents and are
willing to execute and deliver this Agreement in order to induce the holders of
the Notes to purchase the Notes and the holders of any Other Second-Priority
Lien Obligations to make their respective extensions of credit thereunder.

 

Accordingly, the parties hereto agree as follows:

 

2

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ARTICLE I.

 

Definitions

 

SECTION 1.01.                                        Indenture.  Capitalized
terms used in this Agreement and not otherwise defined herein have the
respective meanings assigned thereto in the Indenture as in effect on the date
hereof and without regard to any amendments, modifications, or supplements
thereto from time to time.  All capitalized terms referred to in Article III
hereof that are defined in Article 9 of the New York UCC and not defined in this
Agreement have the meanings specified in Article 9 of the New York UCC.  The
term “instrument” shall have the meaning specified in Article 9 of the New York
UCC. If the First-Priority Lien Obligations Termination Date has occurred, a
reference in this Agreement to the Applicable First Lien Agent shall, unless the
context requires otherwise, be construed as a reference to the Agent and this
Agreement shall be interpreted accordingly.

 

(b)                                 The rules of construction specified in
Section 1.03 of the Indenture also apply to this Agreement.

 

SECTION 1.02.                                        Other Defined Terms.  As
used in this Agreement, the following terms have the meanings specified below:

 

“1.5 Lien Term Loan Agreement” has the meaning assigned to such term in the
recitals of this Agreement.

 

“Account Debtor” means any person who is or who may become obligated to any
Pledgor under, with respect to or on account of an Account.

 

“Additional Priority Lien Intercreditor Agreement” has the meaning assigned to
such term in the recitals of this Agreement.

 

“Agent” means the party named as such in this Agreement until a successor
(including successors under the Indenture) replaces it and, thereafter, means
such successor.

 

“Agreement” has the meaning assigned to such term in the recitals hereto.

 

“Applicable Agent” means the Applicable First Lien Agent (or, if the
First-Priority Lien Obligations Termination Date has occurred, the Agent).

 

“Applicable Authorized Representative” means (i) the Collateral Agent so long as
the Notes are outstanding and (ii) thereafter the Authorized Representative
representing the series of Obligations with the largest outstanding principal
amount (unless otherwise agreed to in writing by the Authorized Representatives
party to this Agreement at such time).

 

“Applicable First Lien Agent” has the meaning assigned to such term in the
Additional Priority Lien Intercreditor Agreement.

 

“Authorized Representative” means the Agent and, with respect to any series of
Other Second-Priority Lien Obligations, the Person elected, designated or
appointed as the administrative

 

3

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agent and/or trustee or similar representative of such series on behalf of the
holders of such Series of Other Second-Priority Lien Obligations, and its
respective successors in substantially the same capacity as may from time to
time be appointed.

 

“Article 9 Collateral” has the meaning assigned to such term in Section 3.01.

 

“Bankruptcy Code” means Title 11 of the United States Code.

 

“Co-Issuers” has the meaning assigned to such term in the recitals of this
Agreement.

 

“Collateral” means Article 9 Collateral and Pledged Collateral.

 

“Collateral Agent” means the party named as such in this Agreement until a
successor (including successors under the Indenture) replaces it and,
thereafter, means such successor.

 

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any Pledgor under any Copyright now or hereafter owned by
any third party, and all rights of any Pledgor under any such agreement
(including any such rights that such Pledgor has the right to license).

 

“Copyrights” means all of the following now owned or hereafter acquired by any
Pledgor (or, as required in the context of the definition of “Copyright
License,” any third party licensor):  (a) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise; and (b) all registrations and
applications for registration of any such Copyright in the United States or any
other country, including registrations, supplemental registrations and pending
applications for registration in the United States Copyright Office, including
those listed on Schedule III.

 

“Credit Agreement” has the meaning assigned to such term in the recitals of this
Agreement.

 

“Credit Documents” means the Indenture Documents and the Other Second-Priority
Lien Obligations Documents.

 

“Default” means a “Default” under and as defined in the Indenture or any other
Credit Document.

 

“Discharge” has the meaning assigned to such term in the Additional Priority
Lien Intercreditor Agreement.

 

“Event of Default” means an “Event of Default” under and as defined in the
Indenture or any other Credit Document.

 

“Excluded Assets” has the meaning assigned to such term in Section 3.01(a).

 

“Excluded Securities” means:

 

4

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(a) any Equity Interests or debt with respect to which, in the reasonable
judgment of the Applicable Agent and the Issuer evidenced in writing, the cost
or other consequences of pledging such Equity Interests or debt in favor of the
Secured Parties under the Security Documents shall be excessive in view of the
benefits to be obtained by the Secured Parties therefrom;

 

(b) solely in the case of any pledge of Equity Interests of any FSHCO (in each
case, that is owned directly by the Issuer or a Subsidiary Party) to secure the
Obligations, any Equity Interest that is Voting Stock of such FSHCO in excess of
65% of the outstanding Equity Interests of such class (such percentages to be
adjusted upon any change of law as may be required to avoid adverse U.S. federal
income tax consequences to the Issuer or any Subsidiary);

 

(c) any Equity Interests or debt to the extent the pledge thereof would be
prohibited by any applicable law;

 

(d) any Equity Interests of any Subsidiary that is not a Wholly-Owned Subsidiary
to the extent (A) that a pledge thereof to secure the Obligations is prohibited
by any applicable organizational documents, joint venture agreement or
shareholder agreement (other than customary non-assignment provisions which are
ineffective under the Uniform Commercial Code or other applicable law), (B) any
organizational documents, joint venture agreement or shareholder agreement
prohibits such a pledge without the consent of any other party; provided that
this clause (B) shall not apply if (1) such other party is a Pledgor or a
Wholly-Owned Subsidiary or (2) consent has been obtained to consummate such
pledge (it being understood that the foregoing shall not be deemed to obligate
the Issuer or any Subsidiary to obtain any such consent) and for so long as such
organizational documents, joint venture agreement or shareholder agreement or
replacement or renewal thereof is in effect, or (C) a pledge thereof to secure
the Obligations would give any other party (other than a Pledgor or a
Wholly-Owned Subsidiary) to any organizational documents, joint venture
agreement or shareholder agreement governing such Equity Interests the right to
terminate its obligations thereunder (other than customary non-assignment
provisions that are ineffective under the Uniform Commercial Code or other
applicable law);

 

(e) any Equity Interests of (i) any Subsidiary that is not a Material Subsidiary
and (ii) any Unrestricted Subsidiary;

 

(f) any Equity Interests of any Subsidiary of a Foreign Subsidiary;

 

(g) any Equity Interests of any Subsidiary to the extent that the pledge of such
Equity Interests would result in material adverse tax consequences to the Issuer
or any Subsidiary as reasonably determined by the Issuer in writing delivered to
the Agent;

 

(h) any Equity Interests or debt at any time that is not then subject to a Lien
securing the First-Priority Lien Obligations at such time;

 

(i) any of the issued and outstanding Equity Interests of any Foreign Subsidiary
(the pledge of which is governed by the Pledge Agreement);

 

(j) any “Margin Stock”, as defined in Regulation U of the Board of Governors of
the Federal Reserve System of the United States of America; and

 

5

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(k) any Equity Interests or securities of a Subsidiary to the extent excluded by
the last paragraph of Section 2.01.

 

“Federal Securities Laws” has the meaning assigned to such term in Section 4.04.

 

“First-Priority Lien Obligations” has the meaning assigned to such term in the
Additional Priority Lien Intercreditor Agreement.

 

“First-Priority Lien Obligations Documents” has the meaning assigned to such
term in the Additional Priority Lien Intercreditor Agreement.

 

“First-Priority Lien Obligations Termination Date” means, subject to the
Additional Priority Lien Intercreditor Agreement, the date on which the
Discharge of First-Priority Lien Obligations occurs; provided that if, at any
time after the First-Priority Lien Obligations Termination Date, the Discharge
of First-Priority Lien Obligations is deemed not to have occurred under the
Additional Priority Lien Intercreditor Agreement, the First-Priority Lien
Obligations Termination Date shall automatically be deemed not to have occurred
for all purposes of this Agreement (other than with respect to any actions taken
prior to the date of incurrence and designation of any new First-Priority Lien
Obligations as a result of the occurrence of such first Discharge of
First-Priority Lien Obligations).

 

“Foreign Corporate Subsidiary” shall mean a Foreign Subsidiary that is treated
as a corporation for U.S. federal income tax purposes.

 

“FSHCO” shall mean any direct or indirect Subsidiary that owns (directly or
through Subsidiaries) no material assets other than the Equity Interests of one
or more direct or indirect Foreign Corporate Subsidiaries.

 

“General Intangibles” means all “general intangibles” as defined in the New York
UCC, including all choses in action and causes of action and all other
intangible personal property of any Pledgor of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Pledgor, including corporate or
other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, swap agreements
and other agreements), Intellectual Property, goodwill, registrations,
franchises and tax refund claims.

 

“Holdings” has the meaning assigned to such term in the recitals of this
Agreement.

 

“Indemnitee” has the meaning assigned to such term in Section 5.06.

 

“Insolvency or Liquidation Proceeding” means: (a) any voluntary or involuntary
case or proceeding under the Bankruptcy Code with respect to any Pledgor,
(b) any other voluntary or involuntary insolvency, reorganization or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding with respect to any Pledgor or with respect to any of
its assets, (c) any liquidation, dissolution, reorganization or winding up of
any Pledgor whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy (other than any liquidation, dissolution,
reorganization or winding up of any Subsidiary

 

6

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of the Issuer permitted by the Credit Documents) or (d) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of any
Pledgor.

 

“Indenture” has the meaning assigned to such term in the recitals of this
Agreement.

 

“Indenture Documents” means (a) the Indenture, the Notes, the Security Documents
and this Agreement and (b) any other related documents or instruments executed
and delivered pursuant to the Indenture or any Security Document, in each case,
as such agreements, documents or instruments may be amended, restated,
supplemented or otherwise modified from time to time.

 

“Indenture Obligations” means (a) the due and punctual payment by the Co-Issuers
of (i) the unpaid principal of and interest (including interest accruing during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Notes, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, and (ii) all other monetary
obligations of the Co-Issuers to any of the Secured Parties under the Indenture
and each of the other Indenture Documents, including obligations to pay fees,
expense reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the Co-Issuers under or pursuant to the Indenture and each of the
other Indenture Documents and (c) the due and punctual payment and performance
of all the obligations of each other Pledgor under or pursuant to this Agreement
and each of the other Indenture Documents; provided that Indenture Obligations
shall not include fees or indemnifications in favor of third parties other than
the Trustee, the Collateral Agent and the holders of the Notes.

 

“Intellectual Property” means all intellectual and similar property of every
kind and nature now owned or hereafter acquired by any Pledgor, including
inventions, designs, Patents, Copyrights, Trademarks, Patent Licenses, Copyright
Licenses, Trademark Licenses, trade secrets, domain names, confidential or
proprietary technical and business information, know-how, show-how or other data
or information and all related documentation.

 

“Issuer” has the meaning assigned to such term in the recitals of this
Agreement.

 

“Issue Date” shall mean November 29, 2016

 

“Material Subsidiary” means, at any date of determination, each Restricted
Subsidiary of the Issuer that is not an Excluded Subsidiary pursuant to clause
(f) of the definition of “Excluded Subsidiary” in the Indenture.

 

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

 

“Obligations” means (a) the Indenture Obligations and (b) if any Other
Second-Priority Lien Obligations are incurred, (1) the due and punctual payment
by the Co-Issuers of (i)

 

7

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the unpaid principal of and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) owing
to any holder of Other Second-Priority Lien Obligations under any Other
Second-Priority Lien Obligations Documents, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations of the Co-Issuers to any
holder of Other Second-Priority Lien Obligations under the Other Second-Priority
Lien Obligations Documents, including obligations to pay fees, expense
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (2) the due and punctual performance of all other
obligations of the Co-Issuers under or pursuant to the Other Second-Priority
Lien Obligations Documents and (3) the due and punctual payment and performance
of all the obligations of each other Pledgor under or pursuant to this Agreement
and the Other Second-Priority Lien Obligations Documents.

 

“Other Second-Priority Lien Obligations” means other Indebtedness of the Issuer
and its Restricted Subsidiaries that is equally and ratably secured with the
Notes as permitted by the Indenture Documents and any Other Second-Priority Lien
Obligations Documents in effect at the time such Indebtedness is incurred and is
designated by the Issuer as an Other Second-Priority Lien Obligation in
accordance with Section 5.17 hereof.

 

“Other Second-Priority Lien Obligations Documents” means any document or
instrument executed and delivered with respect to any Other Second-Priority Lien
Obligations, including the Security Documents and this Agreement, in each case,
as such agreements, documents or instruments may be amended, restated,
supplemented or otherwise modified from time to time.

 

“Other Second-Priority Lien Obligations Secured Party Joinder Agreement” means a
Consent and Acknowledgment (as defined in the Additional Priority Lien
Intercreditor Agreement) executed by the Authorized Representative of any
holders of Other Second-Priority Lien Obligations pursuant to Section 5.17.

 

“Patent License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to make, use or sell any invention covered by
a Patent, now or hereafter owned by any third party (including any such rights
that such Pledgor has the right to license).

 

“Patents” means all of the following now owned or hereafter acquired by any
Pledgor (or, as required in the context of the definition of “Patent License,”
any third party licensor):  (a) all patents of the United States or the
equivalent thereof in any other country, and all applications for patents of the
United States or the equivalent thereof in any other country, including those
listed on Schedule III, and (b) all reissues, continuations, divisions,
continuations-in-part or extensions thereof, and the inventions disclosed or
claimed therein, including the right to make, use and/or sell the inventions
disclosed or claimed therein.

 

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“Perfection Certificate” means a certificate substantially in the form of
Exhibit II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by an officer of the Issuer.

 

“Permitted Liens” means Liens that are not prohibited by the Indenture or any
Other Second-Priority Lien Obligations Document.

 

“Pledge Agreement” means the Pledge Agreement, dated as of the date hereof, by
and among the Issuer, each Subsidiary of the Issuer identified therein and the
Agent, as amended, restated, supplemented or otherwise modified from time to
time.

 

“Pledged Collateral” has the meaning assigned to such term in Section 2.01.

 

“Pledged Debt Securities” has the meaning assigned to such term in Section 2.01.

 

“Pledged Securities” means any promissory notes, stock certificates or other
certificated securities now or hereafter included in the Pledged Collateral,
including all certificates, instruments or other documents representing or
evidencing any Pledged Collateral.

 

“Pledged Stock” has the meaning assigned to such term in Section 2.01.

 

“Pledgor” shall mean the Issuer and each Subsidiary Party.

 

“Priority Lien Intercreditor Agreement” has the meaning assigned to such term in
the recitals of this Agreement.

 

“RBL Facility Agent” has the meaning assigned to such term in the Additional
Priority Lien Intercreditor Agreement.

 

“Secured Parties” means (a) the Collateral Agent, (b) each holder of a Note,
(c) the beneficiaries of each indemnification obligation undertaken by any
Pledgor under any Credit Documents, (d) the Trustee, (e) the holders of any
Other Second-Priority Lien Obligations and their Authorized Representative,
provided that such Authorized Representative executes an Other Second-Priority
Lien Obligations Secured Party Joinder Agreement and (f) the successors and
permitted assigns of each of the foregoing.  When used in the phrase “the
Applicable Agent, for the benefit of the Secured Parties” at any time when the
Applicable First Lien Agent is the Applicable Agent, the term “Secured Parties”
includes holders of the First-Priority Lien Obligations as well as the Persons
described in first sentence of this definition.

 

“Security Documents” means this Agreement, the Pledge Agreement, any agreement
pursuant to which assets are added to the Collateral or otherwise pledged or
mortgaged to secure the Obligations and any other instruments or documents
entered into and delivered in connection with any of the foregoing, as such
agreements, instruments or documents may from time to time be amended, restated,
supplemented or otherwise modified from time to time.

 

“Security Interest” has the meaning assigned to such term in Section 3.01.

 

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“Senior Lien Intercreditor Agreement” has the meaning assigned to such term in
the recitals of this Agreement.

 

“Subsidiary Party” has the meaning assigned to such term in the preliminary
statement of this Agreement.

 

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to use any Trademark now or hereafter owned by
any third party (including any such rights that such Pledgor has the right to
license).

 

“Trademarks” means all of the following now owned or hereafter acquired by any
Pledgor (or, as required in the context of the definition of “Trademark
License,” any third party licensor):  (a) all trademarks, service marks,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations thereof (if any), and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all renewals thereof, including those
listed on Schedule III and (b) all goodwill associated therewith or symbolized
thereby.

 

ARTICLE II.

 

Pledge of Securities

 

SECTION 2.01.                                        Pledge.  As security for
the payment or performance, as the case may be, in full of the Obligations, each
Pledgor hereby assigns and pledges to the Agent, its successors and permitted
assigns, for the benefit of the Secured Parties, and hereby grants to the Agent,
its successors and permitted assigns, for the benefit of the Secured Parties, a
security interest in all of such Pledgor’s right, title and interest in, to and
under (a) the Equity Interests in each Material Subsidiary that is a Domestic
Subsidiary directly owned by it (which such Equity Interests constituting
Pledged Stock as of the date hereof shall be listed on Schedule II) and any
other Equity Interests in a Material Subsidiary that is a Domestic Subsidiary
obtained in the future by such Pledgor and any certificates representing all
such Equity Interests (collectively, the “Pledged Stock”); provided that the
Pledged Stock shall not include any Excluded Securities; (b)(i) the debt
securities currently issued to any Pledgor (which such debt securities
constituting Pledged Debt Securities as of the date hereof shall be listed on
Schedule II), (ii) any debt securities in the future issued to such Pledgor and
(iii) the promissory notes and any other instruments, if any, evidencing such
debt securities (collectively, the “Pledged Debt Securities”); provided that the
Pledged Debt Securities shall not include any Excluded Securities; (c) subject
to Section 2.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other proceeds received in respect of, the securities referred to in
clauses (a) and (b) above; (d) subject to Section 2.06, all rights and
privileges of such Pledgor with respect to the securities and other property
referred to in clauses (a), (b) and (c) above; and (e) all Proceeds of any of
the foregoing (the items referred to in clauses (a) through (e) above being
collectively referred to as the “Pledged Collateral”).

 

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TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Agent, its successors and permitted assigns, for the benefit of the
Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.

 

Notwithstanding the foregoing, to the extent this clause is expressly made
applicable to any Other Second-Priority Lien Obligations, in the event that
Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act of 1933, as
amended (“Rule 3-10” or “Rule 3-16”, as applicable) requires or is amended,
modified or interpreted by the Securities Exchange Commission (“SEC”) to require
(or is replaced with another rule or regulation, or any other law, rule or
regulation is adopted, which would require) the filing with the SEC (or any
other Governmental Authority) of separate financial statements of any Subsidiary
of the Issuer due to the fact that such Subsidiary’s Equity Interests or other
securities secure such Other Second-Priority Lien Obligations, then the Equity
Interests or other securities of such Subsidiary will automatically be deemed
not to be part of the Collateral securing any of such Other Second-Priority Lien
Obligations (whether or not affected thereby) but only to the extent necessary
to not be subject to such requirement and only for so long as required to not be
subject to such requirement. In such event, this Agreement may be amended or
modified, without the consent of any Secured Party, to the extent necessary to
release, solely with respect to such Other Second-Priority Lien Obligations, the
Lien in favor of the Agent on the Equity Interests or other securities that are
so deemed to no longer constitute part of the Collateral for such Other
Second-Priority Lien Obligations. In the event that Rule 3-10 or Rule 3-16 is
amended, modified or interpreted by the SEC to permit (or is replaced with
another rule or regulation, or any other law, rule or regulation is adopted,
which would permit) such Subsidiary’s Equity Interests or other securities to
secure such Other Second-Priority Lien Obligations in excess of the amount then
pledged without the filing with the SEC (or any other Governmental Authority) of
separate financial statements of such Subsidiary, then the Equity Interests or
other securities of such Subsidiary will automatically be deemed to be a part of
the Collateral for such Other Second-Priority Lien Obligations (but only to the
extent that will not result in such Subsidiary being subject to any such
financial statement requirement).  In such event, this Agreement may be amended
or modified, without the consent of any Secured Party, to the extent necessary
to subject to the Lien in favor of the Agent such additional Equity Interests or
other securities, on the terms contemplated herein.

 

SECTION 2.02.                                        Delivery of the Pledged
Collateral.

 

(a)                                 Each Pledgor agrees promptly (and in any
event within 45 days after the acquisition (or such longer time as the
Applicable Agent shall permit in its reasonable discretion)) to deliver or cause
to be delivered to the Applicable Agent, for the benefit of the Secured Parties,
any and all Pledged Securities to the extent such Pledged Securities, in the
case of promissory notes or other instruments evidencing Indebtedness, are
required to be delivered pursuant to paragraph (b) of this Section 2.02.

 

(b)                                 Each Pledgor will cause any Indebtedness
(other than Excluded Securities) (i) having an aggregate principal amount in
excess of $15,000,000 or (ii) payable by the Issuer or any Subsidiary (other
than intercompany Indebtedness having a term not exceeding 364 days and made in
the ordinary course of business) to be evidenced by a duly executed promissory
note that is pledged and delivered to the Applicable Agent, for the benefit of
the Secured Parties, pursuant

 

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to the terms hereof.  To the extent any such promissory note is a demand note,
each Pledgor party thereto agrees, if requested by the Applicable Agent, to
immediately demand payment thereunder upon an Event of Default specified under
Section 6.01(a), (b), (f) or (g) of the Indenture or under any equivalent
provisions of any other Credit Document.

 

(c)                                  Upon delivery to the Applicable Agent,
(i) any Pledged Securities required to be delivered pursuant to the foregoing
paragraphs (a) and (b) of this Section 2.02 shall be accompanied by stock powers
or note powers, as applicable, duly executed in blank or other instruments of
transfer reasonably satisfactory to the Applicable Agent and by such other
instruments and documents as the Applicable Agent may reasonably request and
(ii) all other property comprising part of the Pledged Collateral delivered
pursuant to the terms of this Agreement shall be accompanied to the extent
necessary to perfect the security interest in or allow realization on the
Pledged Collateral by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents as the Applicable
Agent may reasonably request.  Each delivery of Pledged Securities shall be
accompanied by a schedule describing the securities, which schedule shall be
attached hereto as Schedule II (or a supplement to Schedule II, as applicable)
and made a part hereof; provided that failure to attach any such schedule hereto
shall not affect the validity of such pledge of such Pledged Securities.  Each
schedule so delivered shall supplement any prior schedules so delivered.

 

SECTION 2.03.                                        Representations, Warranties
and Covenants.  Each Pledgor represents and warrants to, and covenants with, the
Agent, for the benefit of the Secured Parties, that as of the Issue Date:

 

(a)                                 Schedule II correctly sets forth the
percentage of the issued and outstanding shares of each class of the Equity
Interests of the issuer thereof represented by such Pledged Stock and includes
all debt securities and promissory notes or instruments evidencing Indebtedness
required to be delivered pursuant to Section 2.02(b);

 

(b)                                 the Pledged Stock, to the best of each
Pledgor’s knowledge, have been duly and validly authorized and issued by the
issuers thereof and are fully paid and nonassessable;

 

(c)                                  except for the security interests granted
hereunder (and those securing First-Priority Lien Obligations), each Pledgor
(i) is and, subject to any transfers made in compliance with the Indenture and
each other Credit Document, will continue to be the direct owner, beneficially
and of record, of the Pledged Securities indicated on Schedule II as owned by
such Pledgor, (ii) holds the same free and clear of all Liens, other than
Permitted Liens, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other Lien
on, the Pledged Collateral, other than pursuant to a transaction not prohibited
by any Credit Document and other than Permitted Liens, and (iv) subject to the
rights of such Pledgor under the Credit Documents to dispose of Pledged
Collateral, will use commercially reasonable efforts to defend its title or
interest thereto or therein against any and all Liens (other than Permitted
Liens), however arising, of all persons;

 

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(d)                                 other than as set forth in the Indenture, in
the other Credit Documents or in the First-Priority Lien Obligations Documents
and except for restrictions and limitations imposed by the Credit Documents, the
First-Priority Lien Obligations Documents or securities laws generally, the
Pledged Collateral is and will continue to be freely transferable and
assignable, and none of the Pledged Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter, by-law,
memorandum of association or articles of association provisions or contractual
restriction of any nature that might prohibit, impair, delay or otherwise affect
the pledge of such Pledged Collateral hereunder, the sale or disposition thereof
pursuant hereto or the exercise by the Agent of rights and remedies hereunder
other than under applicable law;

 

(e)                                  each Pledgor has the power and authority to
pledge the Pledged Collateral pledged by it hereunder in the manner hereby done
or contemplated;

 

(f)                                   other than as set forth in the Indenture,
in the other Credit Documents or in the First-Priority Lien Obligations
Documents, no consent or approval of any Governmental Authority, any securities
exchange or any other person was or is necessary to the validity of the pledge
effected hereby (other than such as have been obtained and are in full force and
effect);

 

(g)                                  by virtue of the execution and delivery by
the Pledgors of this Agreement and the Additional Priority Lien Intercreditor
Agreement, when any Pledged Securities are delivered to the Applicable Agent,
for the benefit of the Secured Parties, in accordance with this Agreement and
the Additional Priority Lien Intercreditor Agreement, and a financing statement
in respect of the Pledged Securities is filed in the appropriate filing office,
the Agent will obtain, for the benefit of the Secured Parties, a legal, valid
and perfected (except for any Equity Interests with respect to which, in the
reasonable judgment of the Applicable Agent and the Issuer evidenced in writing
delivered to the Agent, the costs or other consequences of perfecting such a
security interest are excessive in view of the benefits to be obtained by the
Secured Parties therefrom) lien upon and security interest in such Pledged
Securities, subject only to Permitted Liens, as security for the payment and
performance of the Obligations; and

 

(h)                                 the pledge effected hereby is effective to
vest in the Agent, for the benefit of the Secured Parties, the rights of the
Agent in the Pledged Collateral as set forth herein.

 

SECTION 2.04.                                        Certification of Limited
Liability Company and Limited Partnership Interests.

 

(a)                                 Each interest in any limited liability
company or limited partnership controlled by any Pledgor, pledged hereunder and
represented by a certificate, shall be a “security” within the meaning of
Article 8 of the New York UCC and shall be governed by Article 8 of the New York
UCC, and each such interest shall at all times hereafter be represented by a
certificate unless and until such interest is no longer such a “security” and
the Pledgor complies with Section 2.04(b).

 

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(b)                                 Each interest in any limited liability
company or limited partnership controlled by a Pledgor, pledged hereunder and
not represented by a certificate shall not be a “security” within the meaning of
Article 8 of the New York UCC and shall not be governed by Article 8 of the New
York UCC (or other applicable Uniform Commercial Code in effect in another
jurisdiction), and the Pledgors shall at no time elect to treat any such
interest as a “security” within the meaning of Article 8 of the New York UCC or
issue any certificate representing such interest, unless promptly thereafter
(and in any event within 30 days (or such longer period as the Applicable Agent
may agree to)) the applicable Pledgor provides notification to the Applicable
Agent of such election and delivers, as applicable, any such certificate to the
Applicable Agent pursuant to the terms hereof.

 

SECTION 2.05.                                        Registration in Nominee
Name; Denominations.  If an Event of Default shall have occurred and be
continuing, (a) the Applicable Agent, on behalf of the Secured Parties, shall
have the right (in its sole and absolute discretion) to hold the Pledged
Securities in its own name as pledgee or the name of its nominee (as pledgee or
as sub-agent), or the name of the applicable Pledgor, endorsed or assigned in
blank in favor of the Applicable Agent, and (b) each Pledgor will promptly give
to the Applicable Agent copies of any notices or other communications received
by it with respect to Pledged Securities registered in the name of such
Pledgor.  If an Event of Default shall have occurred and be continuing, the
Applicable Agent shall have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Agreement.  Each Pledgor shall use its commercially
reasonable efforts to cause any Subsidiary that is not a party to this Agreement
to comply with a request by the Applicable Agent, pursuant to this Section 2.05,
to exchange certificates representing Pledged Securities of such Subsidiary for
certificates of smaller or larger denominations.

 

SECTION 2.06.                                        Voting Rights; Dividends
and Interest, etc.

 

(a)                                 Unless and until an Event of Default shall
have occurred and be continuing and the Applicable Agent shall have given notice
to the relevant Pledgors of the Applicable Agent’s intention to exercise its
rights hereunder:

 

(i)                           Each Pledgor shall be entitled to exercise any and
all voting and/or other consensual rights and powers inuring to an owner of
Pledged Collateral or any part thereof for any purpose consistent with the terms
of this Agreement, the Indenture and the other Credit Documents; provided that
such rights and powers shall not be exercised in any manner that could be
reasonably likely to materially and adversely affect the rights and remedies of
any of the Agent or the other Secured Parties under this Agreement, the
Indenture or any other Credit Document or the ability of the Secured Parties to
exercise the same.

 

(ii)                        The Agent shall promptly execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, at the sole cost
and expense of the Pledgor, all such proxies, powers of attorney and other
instruments as such Pledgor may reasonably request for the purpose of enabling
such Pledgor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to subparagraph (i) above.

 

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(iii)                     Each Pledgor shall be entitled to receive and retain
any and all dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Collateral to the extent and only to the
extent that such dividends, interest, principal and other distributions are not
prohibited by, and otherwise paid or distributed in accordance with, the terms
and conditions of the Indenture, the other Credit Documents, and applicable
laws; provided that any noncash dividends, interest, principal or other
distributions that would constitute Pledged Securities, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity Interests
of the issuer of any Pledged Securities or received in exchange for Pledged
Securities 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 Pledged
Collateral, and, if received by any Pledgor, shall be promptly (and in any event
within 45 days of their receipt (or such longer time as the Applicable Agent
shall permit in its reasonable discretion)) delivered to the Applicable Agent,
for the benefit of the Secured Parties, in the same form as so received
(endorsed in a manner reasonably satisfactory to the Applicable Agent).

 

(b)                                 After the occurrence and during the
continuance of an Event of Default and upon notice by the Applicable Agent to
the relevant Pledgors of the Applicable Agent’s intention to exercise its rights
hereunder, all rights of any Pledgor to dividends, interest, principal or other
distributions that such Pledgor is authorized to receive pursuant to
paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall
thereupon become vested, for the benefit of the Secured Parties, in the
Applicable Agent, which shall have the sole and exclusive right and authority to
receive and retain such dividends, interest, principal or other distributions;
provided that the Applicable Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the
Pledgors to receive and retain such amounts.  All dividends, interest, principal
or other distributions received by any Pledgor contrary to the provisions of
this Section 2.06 shall not be commingled by such Pledgor with any of its other
funds or property but shall be held separate and apart therefrom, shall be held
in trust for the benefit of the Applicable Agent, for the benefit of the Secured
Parties, and shall be forthwith delivered to the Applicable Agent, for the
benefit of the Secured Parties, in the same form as so received (endorsed in a
manner reasonably satisfactory to the Applicable Agent).  Any and all money and
other property paid over to or received by the Applicable Agent pursuant to the
provisions of this paragraph (b) shall be retained by the Applicable Agent in an
account to be established by the Applicable Agent upon receipt of such money or
other property and shall be applied in accordance with the provisions of
Section 4.02.  After all Events of Default have been cured or waived and the
Issuer has delivered to the Applicable Agent a certificate to that effect, the
Applicable Agent shall promptly repay to each Pledgor (without interest) all
dividends, interest, principal or other distributions that such Pledgor would
otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of
this Section 2.06 and that remain in such account.

 

(c)                                  Upon the occurrence and during the
continuance of an Event of Default and after notice by the Applicable Agent to
the relevant Pledgors of the Applicable Agent’s intention to exercise its rights
hereunder, subject to applicable law, all rights of any Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to exercise pursuant
to paragraph (a)(i) of this Section 2.06, and the obligations of the Applicable
Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and all such
rights shall thereupon become vested

 

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in the Applicable Agent, for the benefit of the Secured Parties, which shall
have the sole and exclusive right and authority to exercise such voting and
consensual rights and powers; provided that the Applicable Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Pledgors to exercise such rights.  After all Events of
Default have been cured or waived and the Issuer has delivered to the Applicable
Agent a certificate to that effect, all rights of any Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to exercise pursuant
to paragraph (a)(i) of this Section 2.06, and the obligations of the Applicable
Agent under paragraph (a)(ii) of this Section 2.06, shall in each case be
reinstated.

 

(d)                                 Any notice given by the Applicable Agent to
the Pledgors suspending their rights under paragraph (a) of this Section 2.06
(i) shall be in writing, (ii) may be given to one or more of the Pledgors at the
same or different times and (iii) may suspend the rights of the Pledgors under
paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such
rights (as specified by the Applicable Agent in its sole and absolute
discretion) and without waiving or otherwise affecting the Applicable Agent’s
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.

 

ARTICLE III.

 

Security Interests in Personal Property

 

SECTION 3.01.                                        Security Interest.

 

(a)                                 As security for the payment or performance,
as the case may be, in full of the Obligations, each Pledgor hereby assigns and
pledges to the Agent, its successors and assigns, for the benefit of the Secured
Parties, and hereby grants to the Agent, its successors and assigns, for the
benefit of the Secured Parties, a security interest (the “Security Interest”) in
all right, title and interest in or to any and all of the following assets and
properties now owned or at any time hereafter acquired by such Pledgor or in
which such Pledgor now has or at any time in the future may acquire any right,
title or interest (collectively, the “Article 9 Collateral”):

 

(i)                                     all Accounts;

 

(ii)                                  all Chattel Paper;

 

(iii)                               all cash and Deposit Accounts;

 

(iv)                              all Documents;

 

(v)                                 all Equipment;

 

(vi)                              all Fixtures;

 

(vii)                           all General Intangibles;

 

(viii)                        Goods;

 

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(ix)                              all Instruments;

 

(x)                                 all Intellectual Property;

 

(xi)                              all Inventory;

 

(xii)                           all Investment Property other than the Pledged
Collateral;

 

(xiii)                        all Letters of Credit and Letter of Credit Rights;

 

(xiv)                       all minerals, oil, gas and As-Extracted Collateral;

 

(xv)                          all books and records pertaining to the Article 9
Collateral; and

 

(xvi)                       substitutions, replacements, accessions, products
and proceeds (including insurance proceeds, licenses, royalties, income,
payments, claims, damages and proceeds of suit) and to the extent not otherwise
included, all proceeds, Supporting Obligations and products of any and all of
the foregoing and all collateral security and guarantees given by any person
with respect to any of the foregoing.

 

Notwithstanding anything to the contrary in any Credit Documents, this Agreement
shall not constitute a grant of a security interest in (and the Article 9
Collateral shall not include) and the other provisions of the Credit Documents
with respect to Collateral need not be satisfied with respect to (a) motor
vehicles or other assets subject to certificates of title and commercial tort
claims, (b) any assets over which the granting of security interests in such
assets would be prohibited by an enforceable contractual obligation binding on
the assets that existed at the time of the acquisition thereof and was not
created or made binding on the assets in contemplation or in connection with the
acquisition of such assets (except in the case of assets owned on the Issue Date
or acquired after the Issue Date with Indebtedness of the type permitted
pursuant to Section 4.03(b)(iv) of the Indenture and any equivalent provision in
any Other Second-Priority Lien Obligations Document), applicable law or
regulation (in each case, except to the extent such prohibition is unenforceable
after giving effect to applicable provisions of the Uniform Commercial Code,
other than proceeds thereof, the assignment of which is expressly deemed
effective under the Uniform Commercial Code notwithstanding such prohibitions)
or to the extent that such security interests would require obtaining the
consent of any governmental authority or would result in materially adverse tax
consequences as reasonably determined by the Issuer in writing delivered to the
Collateral Agent, (c) those assets with respect to which, in the reasonable
judgment of the Applicable Agent and the Issuer, evidenced in writing delivered
to the Agent, the costs or other consequences of obtaining or perfecting such a
security interest are excessive in view of the benefits to be obtained by the
Secured Parties therefrom, (d) any Letter of Credit Rights (other than to the
extent a Lien thereon can be perfected by filing a customary financing
statement), (e) any Excluded Securities, (f) any Pledgor’s right, title or
interest in any license, contract or agreement to which such Pledgor is a party
or any of its right, title or interest thereunder to the extent, but only to the
extent, that such a grant would violate the terms of applicable law or of such
license, contract or agreement, or result in a breach of the terms of, or
constitute a default under, any such license, contract or agreement to which
such Pledgor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the New
York UCC or any other applicable law or regulation (including

 

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the Bankruptcy Code) or principles of equity); provided that, immediately upon
the ineffectiveness, lapse or termination of any such provision, the Collateral
shall include, and such Pledgor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect, (g) any equipment or other asset owned by any Pledgor that is subject
to a purchase money lien or a Capitalized Lease Obligation, in each case, as
permitted under the Indenture and not prohibited by any other Credit Document,
if the contract or other agreement in which such Lien is granted (or the
documentation providing for such Capitalized Lease Obligation) prohibits or
requires the consent of any person other than the Pledgors as a condition to the
creation of any other security interest on such equipment or asset and, in each
case, such prohibition or requirement is permitted by under the Indenture and
not prohibited by any other Credit Document, (h) any foreign collateral or
credit support with respect to such foreign collateral (other than any such
assets pledged pursuant to the Pledge Agreement), (i) any real property (owned
or leased) or oil and gas properties (owned or leased) other than the Mortgaged
Properties, and (j) any asset at any time that is not then subject to a Lien
securing First-Priority Lien Obligations at such time (the foregoing clauses
(a) through (j), the “Excluded Assets”).  With respect to the Collateral, no
control agreements or control arrangements will be required with respect to any
Deposit Accounts, Securities Accounts, Commodity Contracts or any other asset,
the perfection of a security interest in which specifically requires a control
arrangement or control agreement (other than the delivery of Pledged Securities
to the Applicable Agent to the extent required by Article II).

 

(b)                                 Each Pledgor hereby irrevocably authorizes
the Agent at any time and from time to time to file in any relevant jurisdiction
any initial financing statements (including fixture filings) with respect to the
Article 9 Collateral or any part thereof and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (i) whether such Pledgor is an organization, the type of organization
and any organizational identification number issued to such Pledgor, (ii) in the
case of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Article 9 Collateral relates and
(iii) a description of collateral that describes such property in any other
manner as the Agent may reasonably determine is necessary or advisable to ensure
the perfection of the security interest in the Article 9 Collateral granted
under this Agreement, including describing such property as “all assets” or “all
property” or words of similar effect. Each Pledgor agrees to provide such
information to the Agent promptly upon request.

 

The Agent is further authorized to file with the United States Patent and
Trademark Office or United States Copyright Office (or any successor office or
any similar office in any other country) such documents as may be necessary or
advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Pledgor, without the signature
of any Pledgor, and naming any Pledgor or the Pledgors as debtors and the Agent
as secured party.

 

(c)                                  The Security Interest is granted as
security only and shall not subject the Agent or any other Secured Party to, or
in any way alter or modify, any obligation or liability of any Pledgor with
respect to or arising out of the Article 9 Collateral.

 

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SECTION 3.02.                                        Representations and
Warranties.  The Pledgors jointly and severally represent and warrant to the
Agent and the Secured Parties as of the Issue Date that:

 

(a)                                 Each Pledgor has good and valid rights in
and title to the Article 9 Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant to
the Agent the Security Interest in such Article 9 Collateral pursuant hereto and
to execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval that has been obtained and is in full force and effect
or has otherwise been disclosed herein, in the Indenture or in the
First-Priority Lien Obligations Documents.

 

(b)                                 The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein,
including the exact legal name of each Pledgor, is correct and complete, in all
material respects, as of the Issue Date.  Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Article 9
Collateral have been filed by the Issuers in each governmental, municipal or
other office specified in the Perfection Certificate (or specified by notice
from the Issuer to the Agent after the Issue Date in the case of filings,
recordings or registrations required by Section 4.13 of the Indenture or any
equivalent provision of each other Credit Document), and constitute all the
filings, recordings and registrations (other than filings required to be made in
the United States Patent and Trademark Office and the United States Copyright
Office in order to perfect the Security Interest in Article 9 Collateral
consisting of United States Patents, United States registered Trademarks and
United States registered Copyrights) that are necessary to publish notice of and
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Agent (for the benefit of the Secured Parties) in
respect of all Article 9 Collateral in which the Security Interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or
amendments.  Each Pledgor represents and warrants that a fully executed
agreement in the form hereof (or a short form hereof which form shall be
reasonably acceptable to the Agent) containing a description of all Article 9
Collateral consisting of Intellectual Property with respect to registered United
States Patents (and Patents for which registration applications are pending),
registered United States Trademarks (and Trademarks for which registration
applications are pending) and registered United States Copyrights (and
Copyrights for which registration applications are pending) has been recorded by
the Issuers with the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17
U.S.C. § 205 and the regulations thereunder, as applicable, to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Agent, for the benefit of the Secured Parties, in respect of all
Article 9 Collateral consisting of such Intellectual Property in which a
security interest may be perfected by recording with the United States Patent
and Trademark Office and the United States Copyright Office, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other

 

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than such actions as are necessary to perfect the Security Interest with respect
to any Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or developed
after the Issue Date).

 

(c)                                  The Security Interest constitutes (i) a
legal and valid security interest in all the Article 9 Collateral securing the
payment and performance of the Obligations, (ii) subject to the filings
described in Section 3.02(b), a perfected security interest in all Article 9
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other applicable law in such jurisdictions and
(iii) subject to Section 3.02(b), a security interest that shall be perfected in
all Article 9 Collateral in which a security interest may be perfected upon the
receipt and recording of this Agreement (or a short form hereof) with the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable.  The Security Interest is and shall be prior to any other Lien on
any of the Article 9 Collateral, other than Liens in respect of the
First-Priority Lien Obligations and any other Permitted Liens.

 

(d)                                 The Article 9 Collateral is owned by the
Pledgors free and clear of any Lien, other than Permitted Liens.  None of the
Pledgors has filed or consented to the filing of (i) any financing statement or
analogous document under the Uniform Commercial Code or any other applicable
laws covering any Article 9 Collateral, (ii) any assignment in which any Pledgor
assigns any Article 9 Collateral or any security agreement or similar instrument
covering any Article 9 Collateral with the United States Patent and Trademark
Office or the United States Copyright Office or (iii) any assignment in which
any Pledgor assigns any Article 9 Collateral or any security agreement or
similar instrument covering any Article 9 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, in each case, for Permitted Liens.

 

(e)                                  Except as set forth in the Perfection
Certificate, as of the Issue Date, all Accounts owned by the Pledgors have been
originated by the Pledgors and all Inventory owned by the Pledgors has been
acquired by the Pledgors in the ordinary course of business.

 

SECTION 3.03.                                        Covenants.

 

(a)                                 Each Pledgor agrees promptly (and in any
event within 10 days thereof, or such longer period of time as may be agreed by
the Applicable Agent) to notify the Agent in writing of any change (i) in its
legal name, (ii) in its identity or type of organization or corporate structure,
(iii) in its Federal Taxpayer Identification Number or organizational
identification number or (iv) in its jurisdiction of organization.  Each Pledgor
agrees promptly to provide the Agent with certified organizational documents
reflecting any of the changes described in the immediately preceding sentence. 
Each Pledgor agrees that if it effects or permits any change referred to in the
first sentence of this paragraph (a) it will ensure that all filings have been
made, or will have been made within any applicable statutory period, under the
Uniform Commercial Code or otherwise that are required in order for the Agent at
all times following such change to

 

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have a valid, legal and perfected security interest (subject to First-Priority
Lien Obligations and any other Permitted Liens) in all the Article 9 Collateral,
for the benefit of the Secured Parties.  Each Pledgor agrees promptly to notify
the Agent if any material portion of the Article 9 Collateral owned or held by
such Pledgor is damaged or destroyed.

 

(b)                                 Subject to the rights of such Pledgor under
the Credit Documents to dispose of Collateral, each Pledgor shall, at its own
expense, use commercially reasonable efforts to defend title to the Article 9
Collateral against all persons and to defend the Security Interest of the Agent,
for the benefit of the Secured Parties, in the Article 9 Collateral and the
priority thereof against any Lien that is not a Permitted Lien.

 

(c)                                  Each Pledgor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Agent may from time
to time reasonably request to better assure, 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 and the granting of the Security Interest and the
filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith.

 

Without limiting the generality of the foregoing, each Pledgor hereby authorizes
the Agent, with prompt notice thereof to the Pledgors, to supplement this
Agreement by supplementing Schedule III or adding additional schedules hereto to
specifically identify any asset or item that may constitute Copyrights, Patents,
Trademarks, Copyright Licenses, Patent Licenses or Trademark Licenses; provided
that any Pledgor shall have the right, exercisable within 90 days after it has
been notified by the Agent of the specific identification of such Collateral, to
advise the Agent in writing of any inaccuracy of the representations and
warranties made by such Pledgor hereunder with respect to such Article 9
Collateral.  Each Pledgor agrees that it will use its commercially reasonable
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Article 9 Collateral within 90 days after the date it has been notified
by the Agent of the specific identification of such Article 9 Collateral.

 

(d)                                 (i) Following the First-Priority Lien
Obligations Termination Date, and subject to the Additional Priority Lien
Intercreditor Agreement, after the occurrence of an Event of Default and during
the continuance thereof, the Agent shall have the right, but not the obligation,
to verify under reasonable procedures the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Article 9
Collateral, including, in the case of Accounts or Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification and each Pledgor shall furnish all such assistance and information
as Agent may reasonably request in connection with any such verification.  The
Agent shall have the right, but not the obligation, to share any information it
gains from such inspection or verification with any Secured Party.

 

(ii)                             The Applicable Agent hereby authorizes each
Pledgor to collect such Pledgor’s Accounts and the Applicable Agent may curtail
or terminate said authority

 

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at any time after written notice is provided by the Applicable Agent to such
Pledgor after the occurrence and during the continuance of an Event of Default.

 

(iii)                          At the Applicable Agent’s written request at any
time after the occurrence and during the continuance of an Event of Default,
each Pledgor shall deliver to the Applicable Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Accounts, including all original orders, invoices and shipping
receipts.

 

(e)                                  Following the First-Priority Lien
Obligations Termination Date, and subject to the Additional Priority Lien
Intercreditor Agreement, at its option, the Agent may, but shall not be
obligated to, discharge any past due taxes, assessments, charges, fees, Liens,
security interests or other encumbrances at any time levied or placed on the
Article 9 Collateral and that is not a Permitted Lien, and may pay for the
maintenance and preservation of the Article 9 Collateral to the extent any
Pledgor fails to do so as required by the Indenture, this Agreement or any other
Credit Document, and each Pledgor jointly and severally agrees to reimburse the
Agent on demand for any reasonable payment made or any reasonable expense
incurred by the Agent (including reasonable fees, disbursements and expenses of
counsel) pursuant to the foregoing authorization; provided, however, that
nothing in this Section 3.03(e) shall be interpreted as excusing any Pledgor
from the performance of, or imposing any obligation on the Agent or any Secured
Party to cure or perform, any covenants or other promises of any Pledgor with
respect to taxes, assessments, charges, fees, Liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Credit
Documents.

 

(f)                                   Each Pledgor (rather than the Agent or any
Secured Party) shall remain liable for the observance and performance of all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral and each
Pledgor jointly and severally agrees to indemnify and hold harmless the Agent
and the Secured Parties from and against any and all liability for such
performance.

 

(g)                                  None of the Pledgors shall make or permit
to be made an assignment, pledge or hypothecation of the Article 9 Collateral or
shall grant any other Lien in respect of the Article 9 Collateral, except as not
prohibited by any Credit Document.  None of the Pledgors shall make or permit to
be made any transfer of the Article 9 Collateral, except as not prohibited by
any Credit Document. Notwithstanding the foregoing, if the Applicable Agent
shall have notified the Pledgors that an Event of Default under Section 6.01(a),
(b), (f) or (g) of the Indenture or any equivalent provisions of any other
Credit Document shall have occurred and be continuing, and during the
continuance thereof, the Pledgors shall not sell, convey, lease, assign,
transfer or otherwise dispose of any Article 9 Collateral to the extent
requested by the Applicable Agent (which notice may be given by telephone if
promptly confirmed in writing).

 

(h)                                 None of the Pledgors will, without the
Applicable Agent’s prior written consent (which consent shall not be
unreasonably withheld), grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or partly, any
person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, credits, discounts, compromises or settlements
granted or made in the ordinary course of business

 

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and consistent with prudent business practices, except as not prohibited by the
Credit Documents.

 

(i)                                     Each Pledgor irrevocably makes,
constitutes and appoints the Applicable Agent (and all officers, employees or
agents designated by the Applicable Agent) as such Pledgor’s true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Pledgor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto.  In the event that any Pledgor at any time or times shall fail
to obtain or maintain any of the policies of insurance required by the Credit
Documents or to pay any premium in whole or part relating thereto, the
Applicable Agent may, without waiving or releasing any obligation or liability
of the Pledgors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Applicable Agent reasonably deems
advisable.  All sums disbursed by the Applicable Agent in connection with this
Section 3.03(i), including reasonable attorneys’ fees, court costs, expenses and
other charges relating thereto, shall be payable, upon demand, by the Pledgors
to the Applicable Agent and shall be additional Obligations secured hereby.

 

SECTION 3.04.                                        Other Actions.  In order to
further ensure the attachment, perfection and priority of, and the ability of
the Agent to enforce, for the benefit of the Secured Parties, the Agent’s
security interest in the Article 9 Collateral, each Pledgor agrees, in each case
at such Pledgor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:

 

(a)                                 Instruments and Tangible Chattel Paper.  If
any Pledgor shall at any time own or acquire any Instruments or Tangible Chattel
Paper evidencing an amount in excess of $15,000,000, such Pledgor shall promptly
(and in any event within 30 days of its acquisition (or such longer period as
the Applicable Agent may agree to)) notify the Applicable Agent and promptly
endorse, assign and deliver the same to the Applicable Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the
Applicable Agent may from time to time reasonably request.

 

SECTION 3.05.                                        Covenants Regarding Patent,
Trademark and Copyright Collateral.  Except as not prohibited by any Credit
Documents:

 

(a)                                 Each Pledgor agrees that it will not
knowingly do any act or omit to do any act (and will exercise commercially
reasonable efforts to prevent its licensees from doing any act or omitting to do
any act) whereby any Patent material to the normal conduct of such Pledgor’s
business may become prematurely invalidated or dedicated to the public, and
agrees that it shall take commercially reasonable steps with respect to any
material products covered by any such Patent as necessary and sufficient to
establish and preserve its rights under applicable patent laws.

 

(b)                                 Each Pledgor will, and will use its
commercially reasonable efforts to cause its licensees or its sublicensees to,
for each Trademark material to the normal conduct

 

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of such Pledgor’s business, (i) maintain such Trademark in full force free from
any adjudication of abandonment or invalidity for non-use, (ii) maintain the
quality of products and services offered under such Trademark, (iii) display
such Trademark with notice of federal or foreign registration or claim of
trademark or service mark as required under applicable law and (iv) not
knowingly use or knowingly permit its licensees’ use of such Trademark in
violation of any third-party rights.

 

(c)                                  Each Pledgor will, and will use its
commercially reasonable efforts to cause its licensees or its sublicensees to,
for each work covered by a material Copyright necessary to the normal conduct of
such Pledgor’s business that it publishes, displays and distributes, use
copyright notice as required under applicable copyright laws.

 

(d)                                 Each Pledgor shall notify the Applicable
Agent promptly if it knows that any Patent, Trademark or Copyright material to
the normal conduct of such Pledgor’s business may imminently become prematurely
abandoned, lost or dedicated to the public, or of any materially adverse
determination or development, excluding office actions and similar
determinations or developments, in the United States Patent and Trademark
Office, United States Copyright Office, any court or any similar office of any
country, regarding such Pledgor’s ownership of any such material Patent,
Trademark or Copyright or its right to register or to maintain the same.

 

(e)                                  Each Pledgor, either itself or through any
agent, employee, licensee or designee, shall (i) inform the Agent on an annual
basis on or about the time of delivery of financial statements for such year of
each application by itself, or through any agent, employee, licensee or
designee, for any Patent with the United States Patent and Trademark Office and
each registration of any Trademark or Copyright with the United States Patent
and Trademark Office, the United States Copyright Office or any comparable
office or agency in any other country filed during the preceding twelve-month
period, and (ii) upon the reasonable request of the Agent, execute and deliver
any and all agreements, instruments, documents and papers necessary or as the
Agent may otherwise reasonably request to evidence the Agent’s security interest
in such Patent, Trademark or Copyright.

 

(f)                                   Each Pledgor shall exercise its reasonable
business judgment consistent with the practice in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office or
any comparable office or agency in any other country with respect to maintaining
and pursuing each material application relating to any Patent, Trademark and/or
Copyright (and obtaining the relevant grant or registration) material to the
normal conduct of such Pledgor’s business and to maintain (i) each issued Patent
and (ii) the registrations of each Trademark and each Copyright that is material
to the normal conduct of such Pledgor’s business, including, when applicable and
necessary in such Pledgor’s reasonable business judgment, timely filings of
applications for renewal, affidavits of use, affidavits of incontestability and
payment of maintenance fees, and, if any Pledgor believes necessary in its
reasonable business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.

 

(g)                                  In the event that any Pledgor knows or has
reason to know that any Article 9 Collateral consisting of a Patent, Trademark
or Copyright material to the normal

 

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conduct of its business has been materially infringed, misappropriated or
diluted by a third party, such Pledgor shall promptly notify the Applicable
Agent and shall, if such Pledgor deems it necessary in its reasonable business
judgment, promptly sue and recover any and all damages, and take such other
actions as are reasonably appropriate under the circumstances.

 

(h)                                 Upon and during the continuance of an Event
of Default, at the request of the Applicable Agent, each Pledgor shall use
commercially reasonable efforts to obtain all requisite consents or approvals
from the licensor under each Copyright License, Patent License or Trademark
License to effect the assignment of all such Pledgor’s right, title and interest
thereunder to (in the Applicable Agent’s sole discretion) the designee of the
Applicable Agent or the Applicable Agent.

 

ARTICLE IV.

 

Remedies

 

SECTION 4.01.                                        Remedies upon Default. 
Subject to the Additional Priority Lien Intercreditor Agreement and applicable
law, upon the occurrence and during the continuance of an Event of Default, each
Pledgor agrees to deliver each item of Collateral to the Applicable Agent on
demand, and it is agreed that the Applicable Agent shall have the right to take
any of or all the following actions at the same or different times:  (a) with
respect to any Article 9 Collateral consisting of Intellectual Property, on
demand, to cause the Security Interest to become an assignment, transfer and
conveyance of any of or all such Article 9 Collateral by the applicable Pledgors
to the Applicable Agent or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or a nonexclusive basis, any such
Article 9 Collateral throughout the world on such terms and conditions and in
such manner as the Applicable Agent shall determine (other than in violation of
any then-existing licensing arrangements to the extent that waivers thereunder
cannot be obtained) and (b) with or without legal process and with or without
prior notice or demand for performance, to take possession of the Article 9
Collateral and without liability for trespass to the applicable Pledgor to enter
any premises where the Article 9 Collateral may be located for the purpose of
taking possession of or removing the Article 9 Collateral and, generally, to
exercise any and all rights afforded to a secured party under the applicable
Uniform Commercial Code or other applicable law.  Without limiting the
generality of the foregoing, each Pledgor agrees that the Agent shall have the
right, subject to the requirements of applicable law and subject to the terms
and conditions of the Additional Priority Lien Intercreditor Agreement, to sell
or otherwise dispose of all or any part of the Collateral at a public or private
sale or at any broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Agent shall deem appropriate.  The Agent
shall be authorized in connection with any sale of a security (if it deems it
advisable to do so) pursuant to the foregoing to restrict the prospective
bidders or purchasers to persons who represent and agree that they are
purchasing such security for their own account, for investment, and not with a
view to the distribution or sale thereof.  Upon consummation of any such sale of
Collateral pursuant to this Section 4.01, the Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold.  Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives and releases (to the extent permitted by
law) all rights of redemption, stay, valuation and appraisal

 

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that such Pledgor now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted.

 

The Agent shall give the applicable Pledgors 10 days’ written notice (which each
Pledgor agrees is reasonable notice within the meaning of Section 9-611 of the
New York UCC or its equivalent in other jurisdictions) of the Agent’s intention
to make any sale of Collateral.  At any such sale, the Collateral, or the
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Agent may (in its sole and absolute discretion) determine.  The
Agent 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 Agent 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 the case of any sale of all or any part of the Collateral made on
credit or for future delivery, the Collateral so sold may be retained by the
Agent until the sale price is paid by the purchaser or purchasers thereof, but
the Agent shall not incur any liability in the event that any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in the
case of any such failure, such Collateral may be sold again upon notice given in
accordance with provisions above.  At any public (or, to the extent permitted by
law, private) sale made pursuant to this Section 4.01, any Secured Party may bid
for or purchase for cash, free (to the extent permitted by law) from any right
of redemption, stay, valuation or appraisal on the part of any Pledgor (all such
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and such Secured Party may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Pledgor therefor.  For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Agent shall be free to carry out such
sale pursuant to such agreement and no Pledgor shall be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full.  As an
alternative to exercising the power of sale herein conferred upon it, the Agent
may proceed by a suit or suits at law or in equity to foreclose this Agreement
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.  To the extent provided in this
Section 4.01, any sale that complies with such provisions shall be deemed to
conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

 

SECTION 4.02.                                        Application of Proceeds. 
Subject to the terms of the Additional Priority Lien Intercreditor Agreement,
upon the occurrence and during the continuance of an Event of Default, the Agent
shall promptly apply the proceeds, moneys or balances of any collection or sale
of Collateral, as well as any Collateral consisting of cash, in the order
specified below:

 

FIRST, to the payment of all reasonable costs and expenses and indemnification
amounts incurred by the Agent and any Authorized Representative and all fees
owed to them in connection with such collection or sale or otherwise in
connection with this Agreement, any Credit Document or any of the Obligations,
including

 

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all court costs and the reasonable fees, disbursements and expenses of its
agents and legal counsel, the repayment of all advances made by the Agent or the
relevant Authorized Representatives hereunder or under any other Credit Document
on behalf of any Pledgor and any other reasonable costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any other
Credit Document;

 

SECOND, to the payment in full of the Obligations (the amounts so applied to be
distributed among the Secured Parties pro rata in accordance with the respective
amounts of the Obligations owed to them on the date of any such distribution);
and

 

THIRD, to the Pledgors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

 

The Agent shall have absolute discretion as to the time of application of any
such proceeds, moneys or balances in accordance with this Agreement. Upon the
request of the Agent prior to any distribution under this Section 4.02, each
Authorized Representative shall provide to the Agent certificates setting forth
the respective amounts referred to in this Section 4.02, that each applicable
Secured Party or their Authorized Representative believes it is entitled to
receive, and the Agent shall be fully entitled to rely on such certificates.
Upon any sale of Collateral by the Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the purchase
money by the Agent 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 Agent or such officer or be
answerable in any way for the misapplication thereof.

 

SECTION 4.03.                                        Grant of License to Use
Intellectual Property.  For the purpose of enabling the Agent to exercise rights
and remedies under this Agreement at such time as the Agent shall be lawfully
entitled to exercise such rights and remedies, each Pledgor grants (such grant
effective solely after the occurrence and during the continuance of an Event of
Default) to (in the Agent’s sole discretion) the Applicable Agent or a designee
of the Applicable Agent, for the benefit of the Secured Parties, an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to any Pledgor) to use, license or sublicense any of the Article 9
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Pledgor, wherever the same may be located, and including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof, the right to prosecute and maintain all
Intellectual Property and the right to sue for past infringement of the
Intellectual Property; provided, however, that nothing in this Section 4.03
shall require Pledgors to grant any license that is prohibited by any rule of
law, statute or regulation, or is prohibited by, or constitutes a breach or
default under or results in the termination of, any contract, license,
instrument or other agreement with an unaffiliated third party, to the extent
not prohibited by the Credit Documents, with respect to such Intellectual
Property Collateral; and provided, further, that such licenses to be granted
hereunder with respect to Trademarks shall be subject to the maintenance of
quality standards with respect to the goods and services on which such
Trademarks are used sufficient

 

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to preserve the validity of such Trademarks. For the avoidance of doubt, the use
of such license by the Applicable Agent or its designee may be exercised, at the
option of the Applicable Agent or such designee, only during the continuation of
an Event of Default after the First-Priority Lien Obligations Termination Date.
Furthermore, each Pledgor hereby grants to the Applicable Agent an absolute
power of attorney to sign, upon the occurrence and during the continuance of any
Event of Default, any document which may be required by the United States
Copyright Office or the United States Patent and Trademark Office or any state
office in order to effect an absolute assignment of all right, title and
interest in each Patent, Trademark or Copyright, and to record the same.

 

SECTION 4.04.                                        Securities Act, etc.  In
view of the position of the Pledgors in relation to the Pledged Collateral, or
because of other current or future circumstances, a question may arise under the
Securities Act of 1933, as now or hereafter in effect, or any similar federal
statute hereafter enacted analogous in purpose or effect (such Act and any such
similar statute as from time to time in effect being called the “Federal
Securities Laws”) with respect to any disposition of the Pledged Collateral
permitted hereunder.  Each Pledgor understands that compliance with the Federal
Securities Laws might very strictly limit the course of conduct of the
Applicable Agent if the Applicable Agent 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 Applicable Agent 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.  Each Pledgor
acknowledges and agrees that in light of such restrictions and limitations, the
Applicable Agent, in its sole and absolute discretion, (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 shall have been filed under
the Federal Securities Laws or, to the extent applicable, Blue Sky or other
state securities laws and (b) may approach and negotiate with a single potential
purchaser to effect such sale.  Each 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 Applicable Agent shall incur no responsibility or liability
for selling all or any part of the Pledged Collateral at a price that the
Applicable Agent, 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 4.04 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Applicable Agent sells.

 

ARTICLE V.

 

Miscellaneous

 

SECTION 5.01.                                        Notices.  All
communications and notices hereunder shall (except as otherwise expressly
permitted herein) be in writing and given as provided in Section 14.02 of the
Indenture (whether or not then in effect), as such address may be changed by
written notice to the Agent and the Co-Issuers.  All communications and notices
hereunder to

 

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any Pledgor shall be given to it in care of the Co-Issuers, with such notice to
be given as provided in Section 14.02 of the Indenture (whether or not then in
effect).

 

SECTION 5.02.                                        Security Interest
Absolute.  All rights of the Agent hereunder, the Security Interest, the
security interest in the Pledged Collateral and all obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Indenture, any other Credit Document, any
agreement with respect to any of the 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 Obligations,
or any other amendment or waiver of or any consent to any departure from the
Indenture, any other Credit 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
guarantee, securing or guaranteeing all or any of the Obligations or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Pledgor in respect of the Obligations or this Agreement (other
than a defense of payment or performance).

 

SECTION 5.03.                                        Limitation by Law.  All
rights, remedies and powers provided in this Agreement may be exercised only to
the extent that the exercise thereof does not violate any applicable law, and
all the provisions of this Agreement are intended to be subject to all
applicable law that may be controlling and to be limited to the extent necessary
so that they shall not render this Agreement invalid, unenforceable, in whole or
in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law or regulation.

 

SECTION 5.04.                                        Binding Effect; Several
Agreement.  This Agreement shall become effective as to any party to this
Agreement when a counterpart hereof executed on behalf of such party shall have
been delivered to the Agent and a counterpart hereof shall have been executed on
behalf of the Agent, and thereafter shall be binding upon such party and the
Agent and their respective permitted successors and assigns, and shall inure to
the benefit of such party, the Agent and the other Secured Parties and their
respective permitted successors and assigns, except that no party shall have the
right to assign or transfer its rights or obligations hereunder or any interest
herein or in the Collateral (and any such assignment or transfer shall be void)
except as not prohibited by this Agreement, the Indenture or any other Credit
Document.  This Agreement shall be construed as a separate agreement with
respect to each party and may be amended, modified, supplemented, waived or
released in accordance with Section 5.09.

 

SECTION 5.05.                                        Successors and Assigns. 
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any
Pledgor or the Agent that are contained in this Agreement shall bind and inure
to the benefit of their respective permitted successors and assigns. The Agent
may at any time give notice of its resignation as Agent under this Agreement and
the other Security Documents in accordance with Section 7.08 of the Indenture or
the equivalent provision of any Other Second-Priority Lien Obligations Document.
Upon any notice of resignation of the Agent hereunder and under the other
Security Documents, the Issuer agrees to use commercially reasonable efforts to
transfer (and maintain the validity and priority of) the Liens in favor of the
retiring Agent under the Security Documents to the successor Agent as promptly
as practicable.

 

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SECTION 5.06.                                        Agent’s Fees and Expenses;
Indemnification.

 

(a)                                 The parties hereto agree that the Agent
shall be entitled to reimbursement of its expenses incurred hereunder as
provided in Section 7.07 of the Indenture, and any equivalent provision of any
other Credit Document and the Additional Priority Lien Intercreditor Agreement.

 

(b)                                 Without limitation of its indemnification
obligations under the other Credit Documents, each Pledgor jointly and severally
agrees to indemnify the Agent, the Trustee and each Affiliate of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements
(limited to not more than one counsel, plus, if necessary, one local counsel per
jurisdiction) (except the allocated costs of in-house counsels), incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of, (i) the execution or delivery of this Agreement or any other Credit
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto and thereto of their respective obligations
thereunder or the consummation of the transactions contemplated hereby
(including in connection with the appointment of any successor Agent in
accordance with the applicable Credit Documents and in connection with any
filings, registrations or any other actions to be taken to reflect the security
interest of such successor Agent), (ii) the use of proceeds of the Notes or any
Other Second-Priority Lien Obligations or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, or to the
Collateral, whether or not any Indemnitee is a party thereto and regardless of
whether such matter is initiated by a third party or any Pledgor; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses have resulted from
the gross negligence or willful misconduct of the party to be indemnified or any
of its Related Parties as determined by a final non-appealable judgment of a
court of competent jurisdiction.

 

(c)                                  Any such amounts payable as provided
hereunder shall be additional Obligations secured hereby and by the other
Security Documents.  The provisions of this Section 5.06 shall remain operative
and in full force and effect regardless of the termination of this Agreement or
any other Credit Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Credit
Document, or any investigation made by or on behalf of the Agent or any other
Secured Party.  All amounts due under this Section 5.06 shall be payable within
fifteen days of written demand therefor.

 

(d)                                 The agreements in this Section 5.06 shall
survive the resignation of the Agent and the termination of this Agreement.

 

SECTION 5.07.                                        Agent Appointed
Attorney-in-Fact.  Subject to the terms of the Additional Priority Lien
Intercreditor Agreement, each Pledgor hereby appoints the Agent the
attorney-in-fact of such Pledgor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument that the
Agent may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest.  Without limiting the
generality of the foregoing, subject to applicable law and the Additional

 

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Priority Lien Intercreditor Agreement, the Agent shall have the right, upon the
occurrence and during the continuance of an Event of Default, with full power of
substitution either in the Agent’s name or in the name of such Pledgor, (a) to
receive, endorse, assign or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof, (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to ask
for, demand, sue for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral; (d) to sign
the name of any Pledgor on any invoice or bill of lading relating to any of the
Collateral; (e) to send verifications of Accounts to any Account Debtor; (f) 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; (g) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (h) to notify, or
to require any Pledgor to notify, Account Debtors to make payment directly to
the Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to do
all other acts and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Agent were the absolute owner of the
Collateral for all purposes; provided that nothing herein contained shall be
construed as requiring or obligating the Agent to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by the
Agent, 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.  The Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own or their
Related Parties’ gross negligence or willful misconduct.

 

SECTION 5.08.                                        GOVERNING LAW.  THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

 

SECTION 5.09.                                        Waivers; Amendment.

 

(a)                                 No failure or delay by the Agent, the
Trustee or any other Secured Party in exercising any right, power or remedy
hereunder or under any other Credit Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy, or
any abandonment or discontinuance of steps to enforce such a right, power or
remedy, preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.  The rights, powers and remedies of the Agent, the
Trustee or any other Secured Party hereunder and under the other Credit
Documents are cumulative and are not exclusive of any rights, powers or remedies
that they would otherwise have.  No waiver of any provision of this Agreement or
consent to any departure by any Pledgor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section 5.09, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice or demand on
any Pledgor in any case shall entitle any Pledgor to any other or further notice
or demand in similar or other circumstances.

 

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(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 Agent and the Pledgor or the Pledgors
with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with Article IX of the Indenture
and any equivalent provision in each applicable other Credit Document and except
as otherwise provided in the Additional Priority Lien Intercreditor Agreement. 
The Agent may conclusively rely, and shall be fully protected in relying, on a
certificate of an officer of the Issuer as to whether any amendment contemplated
by this Section 5.09(b) is permitted.

 

(c)                                  For the purpose of Section 5.09(b) above,
the Agent shall be entitled to rely upon (i) written confirmation from the agent
managing the solicitation of consents, provided by the Co-Issuers, as to the
receipt of valid consents from the holders of at least a majority in aggregate
principal amount of all outstanding Notes to amend this Agreement (or two thirds
in aggregate principal amount of all outstanding Notes if required by the
Indenture), and (ii) any document believed by it to be genuine and to have been
signed or presented by the proper person and the Agent need not investigate any
fact or matter stated in the document.  At any time that the Co-Issuers desire
that this Agreement be amended as provided in Section 5.09(b) above, the Issuer
shall deliver to the Agent a certificate signed by an officer of the Issuer
stating that the amendment of this Agreement is permitted pursuant to
Section 5.09(b) above.  If requested by the Agent (although the Agent shall have
no obligation to make any such request), the Co-Issuers shall furnish to the
Agent copies of officers’ certificates and legal opinions delivered to the
Trustee in connection with any amendment to the Indenture affecting the
operation of this Section 5.09.  The Agent shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificates or
opinions. For the avoidance of doubt, the Agent shall have no obligation to
execute and deliver any amendment, supplement, modification or waiver to this
Agreement which affects its own rights, duties, immunities or indemnities under
this Agreement or under the other Security Documents.

 

SECTION 5.10.                                        Severability.  In the event
any one or more of the provisions contained in this Agreement or in any other
Credit Document should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby.  The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

SECTION 5.11.                                        Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute but
one contract, and shall become effective as provided in Section 5.04.  Delivery
of an executed counterpart to this Agreement by facsimile or electronic
transmission shall be as effective as delivery of a manually signed original.

 

SECTION 5.12.                                        Headings.  Article and
Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.

 

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SECTION 5.13.                                        Termination or Release.

 

(a)                                 Subject to any applicable terms of the
Additional Priority Lien Intercreditor Agreement, this Agreement, the pledges
made herein and all other security interests granted hereby, and all other
Security Documents securing the Obligations, shall automatically terminate
and/or be released all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the
applicable Pledgors, upon the Discharge of First-Priority Lien Obligations and
the concurrent release of all other Liens on the collateral (except cash
collateral in respect of any letters of credit) or assets securing the
First-Priority Lien Obligations (including all commitments and letters of credit
thereunder) or any other release of all or substantially all of the Collateral
securing First-Priority Lien Obligations; provided, however, that if any Pledgor
subsequently incurs First-Priority Lien Obligations that are secured by Liens on
property or assets of a Pledgor of the type constituting Collateral and the
related Liens are incurred in reliance on clause (6)(B) of the definition of
“Permitted Liens” in the Indenture and any equivalent provision in any other
Credit Document, then the Pledgors will be required to reinstitute the security
arrangements hereunder with respect to such Collateral, and the Liens securing
the Obligations will be junior priority Liens on such Collateral securing such
First-Priority Lien Obligations to the same extent provided by the Security
Documents and subject to the Additional Priority Lien Intercreditor Agreement or
an intercreditor agreement that provides the Agent, the Secured Parties and the
holders of such new First-Priority Lien Obligations substantially the same
rights and obligations as afforded under the Additional Priority Lien
Intercreditor Agreement. Notwithstanding the foregoing, if an Event of Default
exists on the First-Priority Lien Obligations Termination Date, the junior
priority Liens on the Collateral granted hereunder will not be released, except
to the extent the Collateral or any portion thereof was disposed of in order to
repay the First-Priority Lien Obligations secured by the Collateral, and
thereafter the Agent will have the right to foreclose or direct the Applicable
First Lien Agent to foreclose upon the Collateral (but in such event, the Liens
on the Collateral securing the Obligations will be released when such Event of
Default and all other Events of Default cease to exist).

 

(b)                                 A Subsidiary Party shall automatically be
released from its obligations hereunder and the security interests in the
Collateral of such Subsidiary Party shall be automatically released upon the
consummation of any transaction not prohibited by any Credit Document as a
result of which such Subsidiary Party ceases to be a Restricted Subsidiary or
such Subsidiary is released from its Subsidiary Guarantee and from its
Subsidiary guarantees of all Credit Documents or otherwise ceases to be a
Subsidiary Guarantor, all without delivery of any instrument or performance of
any act by any party, and all rights to the Collateral shall revert to such
Subsidiary Party.

 

(c)                                  (i) Upon any sale or other transfer by any
Pledgor of any Collateral that is not prohibited by any Credit Document to any
person that is not a Pledgor (including in connection with a Casualty Event), or
(ii) upon the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section 9.02 of
the Indenture and any equivalent provision of each applicable other Credit
Document, the security interest in such Collateral shall be automatically
released, all without delivery of any instrument or performance of any act by
any party.

 

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(d)                                 If any of the Collateral shall become
subject to the release provision set forth in Section 2.05(a) of the Additional
Priority Lien Intercreditor Agreement, such Collateral shall be automatically
released from the security interest in such Collateral to the extent provided
therein.

 

(e)                                  This Agreement, the pledges made herein,
the Security Interest and all other security interests granted hereby, and all
other Security Documents securing the Obligations, shall automatically terminate
and/or be released all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the
applicable Pledgors, as of the date when all the Obligations (other than
contingent or unliquidated obligations or liabilities not then due) have been
paid in full in cash or immediately available funds.

 

(f)                                   The security interest securing Indenture
Obligations will be released as provided in Section 11.04 of the Indenture, and
the security interest securing any Other Second-Priority Lien Obligations will
be released as provided in the applicable Other Second-Priority Lien Documents.

 

(g)                                  In connection with any termination or
release pursuant to paragraph (a), (b), (c), (d), (e) or (f) of this
Section 5.13, the Agent shall execute and deliver to any Pledgor, at such
Pledgor’s expense, all documents that such Pledgor shall reasonably request to
evidence such termination or release (including, without limitation, UCC
termination statements), and will duly assign and transfer to such Pledgor, such
of the Pledged Collateral that may be in the possession of the Agent and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement.  Any execution and delivery of documents pursuant to this
Section 5.13 shall be without recourse to or warranty by the Agent.  In
connection with any release pursuant to paragraph (a), (b), (c), (d), (e) or
(f) above, the Pledgors shall be permitted to take any action in connection
therewith consistent with such release including, without limitation, the filing
of UCC termination statements. Upon the receipt of any necessary or proper
instruments of termination, satisfaction or release prepared by the Issuer, the
Agent shall execute, deliver or acknowledge such instruments or releases to
evidence the release of any Collateral permitted to be released pursuant to this
Agreement or the Security Documents or the Additional Priority Lien
Intercreditor Agreement.  The Pledgors agree to pay all reasonable and
documented expenses incurred by the Agent (and its representatives and counsel)
in connection with the execution and delivery of such release documents or
instruments.

 

SECTION 5.14.                                        Additional Subsidiaries. 
Upon execution and delivery by the Agent and any Subsidiary that is required to
become a party hereto by Section 4.11 of the Indenture or any equivalent
provision of any other Credit Document of an instrument in the form of Exhibit I
hereto, such Subsidiary shall become a Subsidiary Party hereunder with the same
force and effect as if originally named as a Subsidiary Party herein.  The
execution and delivery of any such instrument shall not require the consent of
any other party to this Agreement.  The rights and obligations of each party to
this Agreement shall remain in full force and effect notwithstanding the
addition of any new party to this Agreement.

 

SECTION 5.15.                                        Subject to Additional
Priority Lien Intercreditor Agreement. Notwithstanding anything herein to the
contrary, (i) the liens and security interests granted to the Agent pursuant to
this Agreement are expressly subject and subordinate to the liens and security

 

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interests granted to the RBL Facility Agent pursuant to the Collateral
Agreement, dated as of May 24, 2012 (as amended, amended and restated,
supplemented or otherwise modified from time to time), from the “Pledgors” and
“Grantors” referred to therein, in favor of the RBL Facility Agent, as
collateral agent for the secured parties referred to therein, and (ii) the
exercise of any right or remedy by the Agent hereunder or the application of
proceeds (including insurance proceeds and condemnation proceeds) of any
Collateral are subject to the limitations and provisions of the Additional
Priority Lien Intercreditor Agreement. In the event of any conflict between the
terms of the Additional Priority Lien Intercreditor Agreement and the terms of
this Agreement, the terms of the Additional Priority Lien Intercreditor
Agreement shall govern.

 

SECTION 5.16.                                        First-Priority Lien
Obligations Documents. The Agent acknowledges and agrees, on behalf of itself
and any Secured Party, that any provision of this Agreement to the contrary
notwithstanding, until the First-Priority Lien Obligations Termination Date, the
Pledgors shall not be required to act or refrain from acting pursuant to the
Security Documents or with respect to any Collateral on which the Applicable
First Lien Agent has a Lien superior in priority to the Agent’s Lien thereon in
any manner that would result in a default under the terms and provisions of the
First-Priority Lien Obligations Documents.

 

SECTION 5.17.                                        Other Second-Priority Lien
Obligations.  On or after the date hereof and so long as such obligations are
not prohibited by any Credit Document then in effect, the Issuer may from time
to time designate obligations in respect of Indebtedness to be secured on a pari
passu basis with the Obligations as Other Second-Priority Lien Obligations
hereunder and under the other Security Documents by delivering to the Agent and
each Authorized Representative (a) a certificate signed by an Authorized Officer
of the Issuer (i) identifying the obligations so designated and the initial
aggregate principal amount or face amount thereof, (ii) stating that such
obligations are designated as Other Second-Priority Lien Obligations for
purposes hereof and of the other Security Documents, (iii) representing that
such designation of such obligations as Other Second-Priority Lien Obligations
complies with the terms of the Indenture and any other Credit Document then in
effect, (iv) specifying the name and address of the Authorized Representative
for such obligations and (v) identifying the documents to be designated as the
related Other Second-Priority Lien Obligations Documents and (b) a fully
executed Other Second-Priority Lien Obligations Secured Party Joinder
Agreement.  The Agent and each Authorized Representative agree that upon the
satisfaction of all conditions set forth in the preceding sentence, the Agent
shall act as agent under and subject to the terms of the Security Documents for
the benefit of all Secured Parties, including without limitation, any Secured
Parties that hold any such Other Second-Priority Lien Obligations, and the Agent
and each Authorized Representative agree to the appointment, and acceptance of
the appointment, of the Agent as agent for the holders of such Other
Second-Priority Lien Obligations as set forth in each Other Second-Priority Lien
Obligations Secured Party Joinder Agreement and agree, on behalf of itself and
each Secured Party it represents, to be bound by this Agreement, the other
Security Documents and the Additional Priority Lien Intercreditor Agreement.

 

SECTION 5.18.                                        WAIVER OF JURY TRIAL. EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENTS. EACH PARTY HERETO

 

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(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 PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 5.18.

 

SECTION 5.19.                                        Jurisdiction; Consent to
Service of Process.

 

(a)                                 Each party to this Agreement hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York County, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Credit Documents, 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 or, to the 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 shall affect any right that the Agent
or any Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or any other Credit Document against any Pledgor, or
its properties, in the courts of any jurisdiction.

 

(b)                                 Each party to this Agreement hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Credit Document in any New York State or federal
court of the United States of America sitting in New York County, and any
appellate court from any thereof.  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)                                  Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 5.01.  Nothing in this Agreement or any other Credit Document will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

 

SECTION 5.20.                                        Other Agreements.

 

(a)                                 Each Secured Party agrees that (i) it will
not (and hereby waives any right to) challenge or question in any proceeding the
validity or enforceability of any Obligations of any series or any Security
Document or the validity, attachment, perfection or priority of any Lien under
any Security Document or the validity or enforceability of the priorities,
rights or duties established by or other provisions of this Agreement; provided
that nothing in this Agreement shall be construed to prevent or impair the
rights of any Secured Party from challenging or questioning the validity or
enforceability of any Obligations constituting unmatured interest or

 

36

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the validity of any Lien relating thereto pursuant to Section 502(b)(2) of the
Bankruptcy Code; (ii) it will not take or cause to be taken any action the
purpose or intent of which is, or could be, to interfere, hinder or delay, in
any manner, whether by judicial proceedings or otherwise, any sale, transfer or
other disposition of the Collateral by the Agent, (iii) except as provided in
clause (c) below, it shall have no right to (A) direct the Agent, the Trustee or
any other Secured Party to exercise any right, remedy or power with respect to
any Collateral (including pursuant to any intercreditor agreement) or
(B) consent to the exercise by the Agent, the Trustee or any other Secured Party
of any right, remedy or power with respect to any Collateral, (iv) it will not
institute any suit or assert in any suit, bankruptcy, insolvency or other
proceeding any claim against the Agent, the Trustee or any other Secured Party
seeking damages from or other relief by way of specific performance,
instructions or otherwise with respect to any Collateral, and none of the Agent,
any Applicable Authorized Representative, the Trustee or any other Secured Party
shall be liable for any action taken or omitted to be taken by the Agent, such
Applicable Authorized Representative, the Trustee or other Secured Party with
respect to any Collateral in accordance with the provisions of this Agreement,
(v) it will not seek, and hereby waives any right, to have any Collateral or any
part thereof marshaled upon any foreclosure or other disposition of such
Collateral and (vi) it will not attempt, directly or indirectly, whether by
judicial proceedings or otherwise, to challenge the enforceability of any
provision of this Agreement; provided that nothing in this Agreement shall be
construed to prevent or impair the rights of any of the Agent, the Trustee or
any other Secured Party to enforce this Agreement.

 

(b)                                 Each Secured Party hereby agrees that if it
shall obtain possession of any Collateral or shall realize any proceeds or
payment in respect of any Collateral, pursuant to any Security Document or by
the exercise of any rights available to it under applicable law or in any
Insolvency or Liquidation Proceeding or through any other exercise of remedies
(including pursuant to any intercreditor agreement), then it shall hold such
Collateral, proceeds or payment in trust for the other Secured Parties and
promptly transfer such Collateral, proceeds or payment, as the case may be, to
the Agent, to be distributed by the Agent in accordance with the provisions of
Section 4.02 hereof.

 

(c)                                  No Secured Party not represented by the
Applicable Authorized Representative shall, or shall instruct the Agent to, take
any action available to it in respect of, any Collateral (including with respect
to any intercreditor agreement with respect to any Collateral), whether under
any Security Document, applicable law or otherwise, it being agreed that only
the Agent, acting on the instructions of the Applicable Authorized
Representative and in accordance with the applicable Security Documents, shall
be entitled to take any such actions or exercise any remedies with respect to
Collateral.   No Secured Party that is not represented by the Applicable
Authorized Representative will contest, protest or object to any action brought
by the Agent, the Applicable Authorized Representative, the Trustee or any
Secured Party represented by the Applicable Authorized Representative or any
other exercise by the Agent, the Applicable Authorized Representative, the
Trustee or any Secured Party represented by the Applicable Authorized
Representative of any rights and remedies relating to the Collateral.

 

(d)                                 The Agent shall not have any duties or
obligations except those expressly set forth herein and in the Security
Documents, the Senior Lien Intercreditor Agreement, the Priority Lien
Intercreditor Agreement and the Additional Priority Lien Intercreditor
Agreement.  Without limiting the generality of the foregoing, the Agent:

 

37

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(i)                                     shall not be subject to any fiduciary or
other implied duties of any kind or nature to any Person, regardless of whether
an Event of Default has occurred and is continuing;

 

(ii)                                  shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Security
Documents that the Agent is required to exercise as directed in writing by the
Applicable Authorized Representative; provided that the Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel,
may expose the Agent to liability or that is contrary to any Security Document
or applicable law;

 

(iii)                               shall not, except as expressly set forth
herein and in the other Security Documents, have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Issuer or any of its Affiliates that is communicated to or obtained by the
Person serving as the Agent or any of its Affiliates in any capacity;

 

(iv)                              shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Applicable
Authorized Representative or (ii) in the absence of its own gross negligence or
willful misconduct or (iii) in reliance on a certificate of an authorized
officer of the Issuer stating that such action is permitted by the terms of this
Agreement; and shall be deemed not to have knowledge of any Event of Default
under any Series of Other Second-Priority Lien Obligations unless and until
notice describing such Event Default is given to the Agent by the Authorized
Representative of such Other Second-Priority Lien Obligations or the Company;

 

(v)                                 shall not be responsible for or have any
duty to ascertain or inquire into (A) any statement, warranty or representation
made in or in connection with this Agreement or any other Security Document,
(B) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (C) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein or the occurrence of any Default, (D) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Security Document or any other agreement, instrument or document, or the
creation, perfection or priority of any Lien purported to be created by the
Security Documents, (E) the value or the sufficiency of any Collateral for any
Series of Obligations, or (F) the satisfaction of any condition set forth in any
Credit Document or Security Document, other than to confirm receipt of items
expressly required to be delivered to the Agent;

 

(vi)                              shall not have any fiduciary duties or
contractual obligations of any kind or nature under any Other Second-Priority
Lien Obligations Document (but shall be entitled to all protections provided to
the collateral agent therein);

 

(vii)                           with respect to the Indenture or any Other
Second-Priority Lien Obligations Document, may conclusively assume that the
Pledgors have complied with all of their obligations thereunder unless advised
in writing by the Authorized Representative thereunder to the contrary
specifically setting forth the alleged violation; and

 

38

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(viii)                        may conclusively rely on any certificate of an
officer of the Issuer provided pursuant to Section 5.09.

 

(e)                                  Each Secured Party acknowledges that, in
addition to acting as the Agent, Wilmington Trust, National Association also
serves as Trustee under the Indenture and each Secured Party hereby waives any
right to make any objection or claim against Wilmington Trust, National
Association (or any successor Agent or any of their respective counsel) based on
any alleged conflict of interest or breach of duties arising from the Agent also
serving as the Trustee.

 

(f)                                   The Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person.  The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. 
The Agent may consult with legal counsel (who may include, but shall not be
limited to, counsel for the Issuer or counsel for the Trustee), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

(g)                                  The Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Security
Document by or through any one or more sub-agents appointed by the Agent.  The
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Affiliates.  The
exculpatory provisions of this Section 5.20 shall apply to any such sub-agent
and to the Affiliates of the Agent and any such sub-agent.

 

(h)                                 For the avoidance of doubt, the provisions
of Article XI of the Indenture shall also apply to the Agent acting under or in
connection with this Agreement.  No provision of this Agreement shall require
the Agent to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights or powers.

 

[Signature Pages Follow]

 

39

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

 

 

 

 

EP ENERGY LLC

 

 

 

 

 

 

 

 

 

By:

/s/ Kyle A. McCuen

 

 

Name:

Kyle A. McCuen

 

 

Title:

Vice President & Treasurer

 

 

 

 

 

 

 

 

 

EVEREST ACQUISITION FINANCE INC.

 

EP ENERGY GLOBAL LLC

 

EP ENERGY MANAGEMENT, L.L.C.

 

EP ENERGY RESALE COMPANY, L.L.C.

 

EP ENERGY E&P COMPANY, L.P.

 

 

 

 

 

 

 

 

 

By:

/s/ Kyle A. McCuen

 

 

Name:

Kyle A. McCuen

 

 

Title:

Vice President & Treasurer

 

[Signature Page to the Collateral Agreement]

 

--------------------------------------------------------------------------------

 

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent

 

 

 

 

 

 

 

 

 

By:

/s/ Shawn Goffinet

 

 

Name:

Shawn Goffinet

 

 

Title:

Assistant Vice President

 

[Signature Page to the Collateral Agreement]

 

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Schedule I

to the Collateral Agreement

 

Subsidiary Parties

 

See attached.

 

--------------------------------------------------------------------------------

 

Schedule II

to the Collateral Agreement

 

Pledged Stock; Debt Securities

 

See attached.

 

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Schedule III

to the Collateral Agreement

 

Intellectual Property

 

See attached.

 

--------------------------------------------------------------------------------

 

Exhibit I

to the Collateral Agreement

 

SUPPLEMENT NO.        dated as of                     (this “Supplement”), to
the Collateral Agreement dated as of November 29, 2016 (as heretofore amended
and/or supplemented, the “Collateral Agreement”), among EP ENERGY LLC, a
Delaware limited liability company (the “Issuer”), each Subsidiary Party party
thereto and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent (in such
capacity, the “Agent”) for the Secured Parties.

 

A.                                    Reference is made to the Indenture, dated
as of November 29, 2016 (as amended, restated, supplemented, waived or otherwise
modified from time to time, the “Indenture”), among the Issuer and Everest
Acquisition Finance Inc., as co-issuers, the guarantors from time to time party
thereto and Wilmington Trust, National Association, as trustee and collateral
agent.

 

B.                                    Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Indenture and the Collateral Agreement referred to therein.

 

C.                                    The Pledgors have entered into the
Collateral Agreement pursuant to the requirements set forth in the Indenture. 
Section 5.14 of the Collateral Agreement provides that additional Subsidiaries
of the Issuer may become Subsidiary Parties under the Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement.  The
undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement in
accordance with the requirements of the Indenture and any Other Second-Priority
Lien Obligations.

 

Accordingly, the Agent and the New Subsidiary agree as follows:

 

SECTION 1.                            In accordance with Section 5.14 of the
Collateral Agreement, the New Subsidiary by its signature below becomes a
Subsidiary Party and a Pledgor under the Collateral Agreement with the same
force and effect as if originally named therein as a Subsidiary Party and a
Pledgor, and the New Subsidiary hereby (a) agrees to all the terms and
provisions of the Collateral Agreement applicable to it as a Subsidiary Party
and Pledgor thereunder and (b) represents and warrants that the representations
and warranties made by it as a Pledgor thereunder are true and correct in all
material respects on and as of the date hereof.  In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in
full of the Obligations, does hereby create and grant to the Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and Lien on all the New Subsidiary’s right,
title and interest in and to the Collateral of the New Subsidiary.  Each
reference to a “Subsidiary Party” or a “Pledgor” in the Collateral Agreement
shall be deemed to include the New Subsidiary.  The Collateral Agreement is
hereby incorporated herein by reference.

 

SECTION 2.                            The New Subsidiary represents and warrants
to the Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to (i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors’ rights
generally, (ii) general principles

 

1

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of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (iii) implied covenants of good faith and
fair dealing.

 

SECTION 3.                            This Supplement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract.  This Supplement shall
become effective when the Agent shall have received a counterpart of this
Supplement that bears the signature of the New Subsidiary.  Delivery of an
executed signature page to this Supplement by facsimile or electronic
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

 

SECTION 4.                            The New Subsidiary hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true and correct
schedule of all the Pledged Stock and Pledged Debt Securities of the New
Subsidiary as of the date hereof, (b) set forth on Schedule II attached hereto
is a true and correct schedule of all Intellectual Property constituting United
States registered Trademarks, Patents and Copyrights as of the date hereof and
(c) set forth under its signature hereto, is the true and correct legal name of
the New Subsidiary, its jurisdiction of formation and organizational ID number
as of the date hereof.

 

SECTION 5.                            Except as expressly supplemented hereby,
the Collateral Agreement shall remain in full force and effect.

 

SECTION 6.                         THIS SUPPLEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 7.                            In the event any one or more of the
provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and in the Collateral Agreement shall not
in any way be affected or impaired thereby.  The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 8.                            All communications and notices hereunder
shall be in writing and given as provided in Section 5.01 of the Collateral
Agreement.

 

SECTION 9.                            The New Subsidiary agrees to reimburse the
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Agent.

 

2

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IN WITNESS WHEREOF, the New Subsidiary has duly executed this Supplement to the
Collateral Agreement as of the day and year first above written.

 

 

 

 

[Name of New Subsidiary]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

Schedule I

to Supplement No.    to the

Collateral Agreement

 

Pledged Collateral of the New Subsidiary

 

EQUITY INTERESTS

 

Number of Issuer
Certificate

 

Registered Owner

 

Number and Class of
Equity Interests

 

Percentage of
Equity Interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEBT SECURITIES

 

Issuer

 

Principal Amount

 

Date of Note

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Schedule II

to Supplement No.    to the

Collateral Agreement

 

Intellectual Property of the New Subsidiary

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit II

to the Collateral Agreement

 

FORM OF PERFECTION CERTIFICATE

 

Reference is hereby made to that certain Collateral Agreement dated as of
November 29, 2016 (the “Collateral Agreement”) by and among EP ENERGY LLC, a
Delaware limited liability company (the “Issuer”), certain Subsidiaries of the
Issuer party thereto (together with the Issuer, the “Grantors”) and Wilmington
Trust, National Association (the “Collateral Agent”). Capitalized terms used but
not defined herein shall have the meanings assigned in the Collateral Agreement.

 

The undersigned hereby certify to the Collateral Agent as follows:

 

ARTICLE VI.  Names and Locations. Schedule I sets forth, as of the Effective
Date: (a) for each Grantor, (i) its full legal name (including all other legal
names used by each Grantor at any time during the past five years, together with
the date of the relevant name change), (ii) to the knowledge of such Grantor,
all trade names or other names under which such Grantor currently conducts
business, (iii) its type of organization or corporate structure, (iv) its
jurisdiction of incorporation or formation, (v) its Federal Taxpayer
Identification Number, (vi) its organizational identification number, if any,
and (vii) the address of the chief executive office of such Grantor; and (b) the
appropriate filing offices for Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations containing a description of the Article 9
Collateral, as contemplated under the Collateral Agreement.

 

ARTICLE VII.  Pledged Stock.  Schedule II sets forth, as of the Effective Date:
(a) for each Grantor, the Equity Interests in each Material Subsidiary that is a
Domestic Subsidiary directly owned by it, which Equity Interests set forth in
clause (a) constitute Pledged Stock; and (b) the debt securities currently
issued to any Grantor, which debt securities set forth in clause (b) constitute
Pledged Debt Securities.

 

ARTICLE VIII.  Intellectual Property. Schedule III sets forth, as of the
Effective Date, for each Grantor, as owned by such Grantor: (a) all
registrations and applications for registration of any Copyright in the United
States or any other country; (b) all patents of the United States or the
equivalent thereof in any other country, and all applications for patents of the
United States or the equivalent thereof in any other country; and (c) all
trademarks, service marks, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like nature, all
registrations thereof (if any), and all registration and recording applications
filed in connection therewith, including registrations and registration
applications in the United States Patent and Trademark Office or any similar
offices in any State of the United States or any other country or any political
subdivision thereof, and all renewals thereof.

 

ARTICLE IX.  Accounts and Inventory.  Except as set forth on Schedule IV, all
Accounts owned by the Grantors have been originated by the Grantors and all
Inventory owned by the Grantors has been acquired by the Grantors in the
ordinary course of business.

 

1

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ARTICLE X.  Letters of Credit.  Schedule V sets forth a true and correct list of
all Letters of Credit issued in favor of each Grantor, as beneficiary
thereunder.

 

[The Remainder of this Page has been intentionally left blank]

 

2

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Exhibit II

to the Collateral Agreement

 

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
the date first written above.

 

 

EP ENERGY LLC

 

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

 

 

EVEREST ACQUISITION FINANCE INC.

 

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

 

 

EP ENERGY GLOBAL LLC

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

 

 

EP ENERGY MANAGEMENT, L.L.C.

 

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

 

 

EP ENERGY RESALE COMPANY, L.L.C.

 

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

 

 

EP ENERGY E&P COMPANY, L.P.

 

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

 

Schedule I

 

 

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Schedule II

 

 

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Schedule III

 

 

--------------------------------------------------------------------------------

 

Schedule IV

 

 

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Schedule V

 

 

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