Exhibit 10.2

 

Execution Version

 

Dated as of September 14, 2018

 

KLX ENERGY SERVICES HOLDINGS, INC.

 

THE OTHER GUARANTORS FROM TIME TO TIME PARTY HERETO

 

JPMORGAN CHASE BANK, N.A.,
as Collateral Agent and Administrative Agent

 

GUARANTY

 

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GUARANTY dated as of September 14, 2018 (as amended, restated, amended and
restated, modified or supplemented from time to time, this Agreement) among KLX
ENERGY SERVICES HOLDINGS, INC., the other GUARANTORS from time to time party
hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent and JPMORGAN CHASE
BANK, N.A., as Collateral Agent for the benefit of the Secured Parties referred
to herein.

 

KLX Energy Services Holdings, Inc., a Delaware corporation (the Company), as
borrower, the Lenders (as defined in the Credit Agreement) party thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and an
Issuing Lender, have entered into that certain Credit Agreement, dated as of
August 10, 2018 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the Credit Agreement; the terms defined therein
which are not otherwise defined herein being used herein as therein defined).

 

As provided in the Credit Agreement, Hedge Banks may from time to time provide
Swap Contracts to the Company or one or more of its Subsidiaries, and Cash
Management Banks may from time to time provide Cash Management Services to, for
the benefit of, or otherwise in respect of, the Company or one or more of its
Subsidiaries, under Cash Management Agreements. To induce the Lenders to enter
into the Credit Agreement and the other Credit Documents, the Hedge Banks to
enter into Swap Contracts permitted under the Credit Agreement and the Cash
Management Banks to enter into Cash Management Agreements, the Company and each
of the Subsidiaries of Company which shall be required to become a party hereto
from time to time in accordance with Section 8.10 or 9.15 of the Credit
Agreement and Section 5.11 hereof (each a Guarantor and collectively, the
Guarantors) will agree, jointly and severally, to provide a guaranty of all
obligations of the other Credit Parties under and in respect of the Credit
Documents.  As used herein, Other Credit Parties means, with respect to any
Guarantor, any and all of the Credit Parties other than such Guarantor.

 

Each of the Guarantors (other than the Company) will be, at the time of becoming
a party hereto, a Subsidiary of the Company.  As such, each Guarantor (other
than the Company) will receive not insubstantial benefits from the Company’s
execution of the Credit Agreement and the consummation of the transactions set
forth therein and the Loans, Letters of Credit and other financial
accommodations to be made, issued or entered into thereunder and from the other
financial accommodations to be made under the other Credit Documents.

 

Accordingly, each Guarantor hereby agrees with the Collateral Agent for the
benefit of the Secured Parties as follows:

 

1.                                      GUARANTY

 

1.1.                            The Guaranty

 

Each Guarantor, unconditionally and irrevocably guarantees, jointly and
severally with the other Guarantors, as a primary obligor and not merely as a
surety: (x) the due and punctual payment of:

 

(a)                                 all principal of and interest (including,
without limitation, any interest which accrues after the commencement of (i) any
voluntary or involuntary case or proceeding under any Debtor Relief Laws with
respect to any Credit Party, (ii) any other voluntary or involuntary,
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership,

 

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liquidation or similar case or proceeding with respect to any Credit Party or
any material portion of its respective assets, (iii) any liquidation,
dissolution, reorganization or winding up of any Credit Party whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy or (iv) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of any Credit Party (each an Insolvency or Liquidation Proceeding),
whether or not allowed or allowable as a claim in any such proceeding) on any
Loan, L/C Disbursement or Revolving L/C Obligation incurred by any Other Credit
Party under, or any Note issued by any Other Credit Party pursuant to, the
Credit Agreement or any other Credit Document;

 

(b)                                 all fees, expenses, indemnification
obligations and other amounts of whatever nature, now or hereafter payable by
any Other Credit Party (including, without limitation, any amounts which accrue
after the commencement of any Insolvency or Liquidation Proceeding with respect
to such Other Credit Party, whether or not allowed or allowable as a claim in
any such proceeding) pursuant to the Credit Agreement or any other Credit
Document;

 

(c)                                  all expenses of any Agent as to which one
or more of them have a right to reimbursement by any Other Credit Party under
Section 12.5 of the Credit Agreement or under any other similar provision of any
other Credit Document, including, without limitation, any and all sums advanced
by any Agent to preserve the Collateral or preserve its security interests in
the Collateral to the extent permitted under any Credit Document or applicable
law;

 

(d)                                 all amounts paid by any Secured Party or any
Related Party thereof (each, an Indemnitee) as to which such Indemnitee has the
right to reimbursement by any Other Credit Party under Section 12.5 of the
Credit Agreement or under any other similar provision of any other Credit
Document;

 

(e)                                  all other amounts now or hereafter payable
by any Other Credit Party and all other obligations or liabilities now existing
or hereafter arising or incurred (including, without limitation, any amounts
which accrue after the commencement of any Insolvency or Liquidation Proceeding
with respect to such Other Credit Party, whether or not allowed or allowable as
a claim in any such proceeding) on the part of any Other Credit Party pursuant
to any Credit Document;

 

(f)                                   all Cash Management Obligations of any
Other Credit Party owed or owing under any Cash Management Agreement to a Cash
Management Bank; and

 

(g)                                  all Swap Obligations of any Other Credit
Party permitted under the Credit Agreement owed or owing under any Swap Contract
to any Hedge Bank, other than any Excluded Swap Obligations (as defined below);

 

in each case together with all renewals, modifications, consolidations or
extensions thereof and whether now or hereafter due, owing or incurred in any
manner, whether actual or contingent, whether incurred solely or jointly with
any other Person and whether as principal or surety (and including all
liabilities in connection with any notes, bills or other instruments accepted by
any Secured Party in connection therewith), together in each case with all
renewals, modifications, consolidations or extensions thereof; and (y) the due
and punctual performance of all covenants,

 

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agreements, obligations and liabilities of each Other Credit Party under or
pursuant to the Credit Documents (all such monetary and other obligations
referred to in clauses (x) and (y) above, other than any Excluded Swap
Obligations, being herein collectively referred to as the Guaranteed
Obligations).

 

Anything contained in this Agreement to the contrary notwithstanding, the
obligations of each Guarantor (other than the Company) hereunder shall be
limited to a maximum aggregate amount equal to the greatest amount that would
not render such Guarantor’s obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any provisions of applicable state law (collectively, the
Fraudulent Transfer laws), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are relevant under
the Fraudulent Transfer laws (specifically excluding, however, any liabilities
of such Guarantor (i) in respect of intercompany indebtedness to any Other
Credit Party or any of its Affiliates to the extent that such indebtedness
(A) would be discharged or would be subject to a right of set-off in an amount
equal to the amount paid by such Guarantor hereunder or (B) has been pledged to,
and is enforceable by, the Collateral Agent on behalf of the Secured Parties and
(ii) under any guaranty of Indebtedness subordinated in right of payment to the
Guaranteed Obligations which guaranty contains a limitation as to a maximum
amount similar to that set forth in this paragraph pursuant to which the
liability of such Guarantor hereunder is included in the liabilities taken into
account in determining such maximum amount) and after giving effect as assets of
such Guarantor to the value (as determined under the applicable provisions of
the Fraudulent Transfer laws) of any rights to subrogation, contribution,
reimbursement, indemnity or similar rights of such Guarantor pursuant to
(i) applicable law or (ii) any agreement providing for an equitable allocation
among such Guarantor and any other Credit Party and its Affiliates of
obligations arising under guaranties by such parties (including the agreements
in Article 2 of this Agreement).  If any Guarantor’s liability hereunder is
limited pursuant to this paragraph to an amount that is less than the total
amount of the Guaranteed Obligations, then it is understood and agreed that the
portion of the Guaranteed Obligations for which such Guarantor is liable
hereunder shall be the last portion of the Guaranteed Obligations to be repaid.

 

For purposes of this Section 1.1, Excluded Swap Obligation means, with respect
to any Guarantor, any Swap Obligation if, and to the extent that, all or a
portion of the guarantee of such Guarantor of, or the grant by such Guarantor of
a security interest to secure, such Swap Obligation (or any guarantee thereof)
is or becomes illegal under the Commodity Exchange Act (7 U.S.C. § 1 et seq.),
as amended from time to time, and any successor statute or any rule, regulation
or order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such Guarantor’s failure
for any reason to constitute an “eligible contract participant” as defined in
the Commodity Exchange Act and the regulations thereunder at the time the
guarantee of such Guarantor or the grant of such security interest becomes
effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to swaps
for which such guarantee or security interest is or becomes illegal.

 

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1.2.                            Guaranty Absolute

 

Each Guarantor guarantees that the Guaranteed Obligations will be paid and
performed strictly in accordance with the terms of the Credit Documents,
regardless of any law now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Secured Parties with respect thereto. 
The obligations of each Guarantor under this Agreement are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against each Guarantor to enforce this Agreement, irrespective of
whether any action is brought against the Company or any Other Credit Party or
whether the Company or any Other Credit Party is joined in any such action or
actions.  The obligations of each Guarantor under Section 1.1 are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of any Other Credit Party under any Credit
Document or any other agreement or instrument referred to therein and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 1.2 that the obligations of each Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.  The obligations of each
Guarantor hereunder are several from those of the Other Credit Parties and are
primary obligations concerning which each Guarantor is the principal obligor. 
The Secured Parties shall not be required to mitigate damages or take any action
to reduce, collect or enforce the Guaranteed Obligations.

 

The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including the
existence of any claim, set-off or other right which any Guarantor may have at
any time against any Other Credit Party, any Agent or other Secured Party or any
other Person, whether in connection herewith or any unrelated transactions. 
Without limiting the generality of the foregoing, each Guarantor’s liability
shall extend to all amounts that constitute part of the Guaranteed Obligations
and would be owed by any Other Credit Party to any Secured Party under the
Credit Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Company or such Other Credit Party.

 

Without limiting the generality of the foregoing, the obligations of each
Guarantor hereunder shall not be released, discharged or otherwise affected or
impaired by:

 

(a)                                 any extension, renewal, settlement,
compromise, acceleration, waiver or release in respect of any obligation of any
Other Credit Party under the Credit Agreement, the Notes, any Swap Contract, any
Cash Management Agreement or any other Credit Document or any other agreement or
instrument evidencing or securing any Guaranteed Obligation, by operation of law
or otherwise;

 

(b)                                 any change in the manner, place, time or
terms of payment of any Guaranteed Obligation or any other amendment, supplement
or modification to the Credit Agreement, the Notes, any other Credit Document or
any other agreement or instrument evidencing or securing any Guaranteed
Obligation;

 

(c)                                  any release, non-perfection or invalidity
of any direct or indirect security for any Guaranteed Obligation, any sale,
exchange, surrender, realization upon, offset against or

 

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other action in respect of any direct or indirect security for any Guaranteed
Obligation or any release of any Other Credit Party or any other guarantor or
guarantors of any Guaranteed Obligation;

 

(d)                                 any change in the existence, structure or
ownership of any Other Credit Party or any insolvency, bankruptcy,
reorganization, arrangement, readjustment, composition, liquidation or other
similar proceeding affecting any Other Credit Party or its assets or any
resulting disallowance, release or discharge of all or any portion of any
Guaranteed Obligation;

 

(e)                                  the existence of any claim, set-off or
other right which any Guarantor may have at any time against any Other Credit
Party, any Agent, any other Secured Party or any other Person, whether in
connection herewith or any unrelated transaction; provided that nothing herein
shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim;

 

(f)                                   any invalidity or unenforceability
relating to or against any Other Credit Party for any reason of the Credit
Agreement, any Note, any other Credit Document or any other agreement or
instrument evidencing or securing any Guaranteed Obligation or any provision of
applicable law purporting to prohibit the payment by any Other Credit Party of
any Guaranteed Obligation;

 

(g)                                  any failure by any Agent or any other
Secured Party:  (i) to file or enforce a claim against any Other Credit Party or
its estate (in a bankruptcy or other proceeding); (ii) to give notice of the
existence, creation or incurrence by any Other Credit Party of any new or
additional indebtedness or obligation under or with respect to the Guaranteed
Obligations; (iii) to commence any action against any Other Credit Party;
(iv) to disclose to any Guarantor any facts which such Agent or such other
Secured Party may now or hereafter know with regard to any Other Credit Party;
or (v) to proceed with due diligence in the collection, protection or
realization upon any collateral securing the Guaranteed Obligations;

 

(h)                                 any direction as to application of payment
by any Other Credit Party or any other Person;

 

(i)                                     any subordination by any Secured Party
of the payment of any Guaranteed Obligation to the payment of any other
liability (whether matured or unmatured) of any Other Credit Party to its
creditors;

 

(j)                                    any act or failure to act by the
Collateral Agent or any other Secured Party under this Agreement or otherwise
which may deprive any Guarantor of any right to subrogation, contribution or
reimbursement against any Other Credit Party or any right to recover full
indemnity for any payments made by such Guarantor in respect of the Guaranteed
Obligations; or

 

(k)                                 any other act or omission to act or delay of
any kind by the Company, any Other Credit Party, the Collateral Agent or any
Secured Party or any other Person or any other circumstance whatsoever which
might, but for the provisions of this clause, constitute a legal or equitable
discharge of any Guarantor’s obligations hereunder.

 

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Each Guarantor has irrevocably and unconditionally delivered this Agreement to
the Collateral Agent, for the benefit of the Secured Parties, and the failure by
any Other Credit Party or any other Person to sign this Agreement or a guaranty
similar to this Agreement or otherwise shall not discharge the obligations of
any Guarantor hereunder.  The irrevocable and unconditional liability of each
Guarantor hereunder applies whether it is liable for the entire amount of its
Guaranteed Obligations, or only for a pro-rata portion, and without regard to
any rights (or the impairment thereof) of subrogation, contribution or
reimbursement that such Guarantor may now or hereafter have against any Other
Credit Party or any other Person.  This Agreement is and shall remain fully
enforceable against each Guarantor irrespective of any defenses that any Other
Credit Party may have or assert in respect of the Guaranteed Obligations,
including, without limitation, failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury, except that a Guarantor may assert the defense of final payment in full
of the Guaranteed Obligations.

 

1.3.                            Payments

 

(a)                                 Payments to be Made Upon Default.  If any
Credit Party fails to pay or perform any Guaranteed Obligation when due in
accordance with its terms (whether at stated maturity, by acceleration or
otherwise) or if any Default or Event of Default specified in Section 10.1(f) of
the Credit Agreement occurs with respect to any Credit Party, the Guarantors
shall, forthwith on demand of the Collateral Agent, pay the aggregate amount of
all Guaranteed Obligations to the Collateral Agent.

 

(b)                                 General Provisions as to Payments.  Each
payment hereunder shall be made without set-off, counterclaim or other
deduction, in Federal or other funds immediately available in The City of New
York, to the Collateral Agent at the address(es) referred to in
Section 5.1(a) hereof on the basis set forth in Section 5.18(a) of the Credit
Agreement.

 

(c)                                  Application of Payments.  All payments
received by the Collateral Agent hereunder shall be applied as provided in
Section 4.2 of the Pledge and Security Agreement.

 

(d)                                 Payment in Contractual Currency.  Each
payment under this Agreement will be made in the relevant currency specified in
the Credit Agreement for the payment of the Guaranteed Obligations (the
Contractual Currency).  To the fullest extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the Collateral Agent, acting in a reasonable manner and in good faith
in converting the currency so tendered into the Contractual Currency, of the
full amount in the Contractual Currency of all amounts payable in respect of
this Agreement.  If for any reason the amount in the Contractual Currency so
received falls short of the amount in the Contractual Currency payable in
respect of this Agreement, each Guarantor will, to the fullest extent permitted
by applicable law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall.

 

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1.4.                            Discharge; Reinstatement in Certain
Circumstances

 

Each Guarantor’s obligations hereunder shall remain in full force and effect
until the latest to occur of (i) payment in full in cash of the principal of and
interest (including interest accruing on or after the commencement of any
Insolvency or Liquidation Proceeding, whether or not a claim for such interest
is, or would be, allowed in such Insolvency or Liquidation Proceeding) and
premium, if any, on all Indebtedness outstanding under the Credit Documents and
termination of all commitments to lend or otherwise extend credit under the
Credit Documents, (ii) payment in full in cash of all other Guaranteed
Obligations that are due and payable or otherwise accrued and owing at or prior
to the time such principal and interest are paid (including legal fees and other
expenses, costs or charges accruing on or after the commencement of any
Insolvency or Liquidation Proceeding, whether or not a claim for such fees,
expenses, costs or charges is, or would be, allowed in such Insolvency or
Liquidation Proceeding but excluding Unmatured Surviving Obligations),
(iii) termination, cancellation or cash collateralization (in an amount
reasonably satisfactory to the Collateral Agent) of, all Letters of Credit
issued or deemed issued under the Credit Documents, (iv) termination or cash
collateralization (in an amount reasonably satisfactory to the Collateral Agent)
of all Swap Contracts and (v) termination or cash collateralization (in an
amount reasonably satisfactory to the Collateral Agent) of all Cash Management
Agreements (the occurrence of all of the foregoing being referred to herein as
Discharge of Finance Obligations).  No payment or payments made by any Other
Credit Party or any other Person or received or collected by any Secured Party
from any Other Credit Party or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Guaranteed Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder, it being understood that each Guarantor shall,
notwithstanding any such payment or payments, remain liable for the Guaranteed
Obligations until the Discharge of Finance Obligations.  If at any time any
payment by any Other Credit Party or any other Person of any Guaranteed
Obligation is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any Other
Credit Party or other Person or upon or as a result of the appointment of a
receiver, intervener or conservator of, or trustee or similar officer for, such
Other Credit Party or other Person or any substantial part of its respective
property or otherwise, each Guarantor’s obligations hereunder with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time.  Each Guarantor party hereto agrees that payment or
performance of any of the Guaranteed Obligations or other acts which toll any
statute of limitations applicable to the Guaranteed Obligations shall also toll
the statute of limitations applicable to each such Guarantor’s liability
hereunder.

 

1.5.                            Waiver by the Guarantors

 

Each Guarantor hereby waives presentment to, demand of payment from and protest
to the Other Credit Parties of any of the Guaranteed Obligations, and also
waives promptness, diligence, notice of acceptance of its guarantee, any other
notice with respect to any of the Guaranteed Obligations and this Agreement and
any requirement that any Agent or any other Secured Party protect, secure,
perfect or insure any Lien or any property subject thereto.  Each Guarantor
further waives any right to require that resort be had by any Agent or any other
Secured Party to any security held for payment of the Guaranteed Obligations or
to any balance of any deposit, account or credit on the books of the any Agent
or any other Secured Party in favor of any Credit Party or any other Person.

 

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Each Guarantor hereby consents and agrees to each of the following to the
fullest extent permitted by law, and agrees that such Guarantor’s obligations
under this Agreement shall not be released, discharged, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including rights to notice) which such Guarantor might otherwise have as a
result of or in connection with any of the following:

 

(a)                                 any renewal, extension, modification,
increase, decrease, alteration or rearrangement of all or any part of the
Guaranteed Obligations or any instrument executed in connection therewith, or
any contract or understanding with any Other Credit Party, any Agent, the other
Secured Parties, or any of them, or any other Person, pertaining to the
Guaranteed Obligations;

 

(b)                                 any adjustment, indulgence, forbearance or
compromise that might be granted or given by any Agent or any other Secured
Party to any Other Credit Party or any other Person liable on the Guaranteed
Obligations; or the failure of any Agent or any other Secured Party to assert
any claim or demand or to exercise any right or remedy against any Other Credit
Party under the provisions of any Credit Document or otherwise; or any
rescission, waiver, amendment or modification of, or any release from any of the
terms or provisions of, any Credit Document or any other agreement, including
with respect to any Other Credit Party under this Agreement;

 

(c)                                  the insolvency, bankruptcy, arrangement,
adjustment, composition, liquidation, disability, dissolution or lack of power
of any Other Credit Party or any other Person at any time liable for the payment
of all or part of the Guaranteed Obligations; or any dissolution of any Other
Credit Party, or any change, restructuring or termination of the corporate
structure or existence of any Other Credit Party, or any sale, lease or transfer
of any or all of the assets of any Other Credit Party, or any change in the
shareholders, partners, or members of any Other Credit Party; or any default,
failure or delay, willful or otherwise, in the performance of the Guaranteed
Obligations;

 

(d)                                 the invalidity, illegality or
unenforceability of all or any part of the Guaranteed Obligations, or any
document or agreement executed in connection with the Guaranteed Obligations,
for any reason whatsoever, including the fact that the Guaranteed Obligations,
or any part thereof, exceed the amount permitted by law, the act of creating the
Guaranteed Obligations or any part thereof is ultra vires, the officers or
representatives executing the documents or otherwise creating the Guaranteed
Obligations acted in excess of their authority, the Guaranteed Obligations
violate applicable usury laws, any Other Credit Party has valid defenses, claims
or offsets (whether at law, in equity or by agreement) which render the
Guaranteed Obligations wholly or partially uncollectible from such Other Credit
Party, the creation, performance or repayment of the Guaranteed Obligations (or
the execution, delivery and performance of any document or instrument
representing part of the Guaranteed Obligations or executed in connection with
the Guaranteed Obligations or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible, legally impossible or unenforceable, or
the documents or instruments pertaining to the Guaranteed Obligations have been
forged or otherwise are irregular or not genuine or authentic;

 

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(e)                                  any full or partial release of the
liability of any Other Credit Party or of any other Person now or hereafter
liable, whether directly or indirectly, jointly, severally, or jointly and
severally, to pay, perform, guarantee or assure the payment of the Guaranteed
Obligations or any part thereof, it being recognized, acknowledged and agreed by
each Guarantor that such Guarantor may be required to pay the Guaranteed
Obligations in full without assistance or support of any other Person, and such
Guarantor has not been induced to enter into this Agreement on the basis of a
contemplation, belief, understanding or agreement that any party other than the
Company will be liable to perform the Guaranteed Obligations, or that the
Secured Parties will look to any other party to perform the Guaranteed
Obligations;

 

(f)                                   the taking or accepting of any other
security, collateral or guarantee, or other assurance of payment, for all or any
part of the Guaranteed Obligations;

 

(g)                                  any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including negligent,
willful, unreasonable or unjustifiable impairment) of any Letter of Credit,
collateral, property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations;

 

(h)                                 any right that any Guarantor may now or
hereafter have under Section 3-606 of the UCC or otherwise to unimpaired
collateral;

 

(i)                                     the failure of any Agent, any other
Secured Party or any other Person to exercise diligence or reasonable care in
the preservation, protection, enforcement, sale or other handling or treatment
of all or any part of such collateral, property or security;

 

(j)                                    the fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Guaranteed Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or subordinate
to any other security interest or lien, it being recognized and agreed by each
Guarantor that such Guarantor is not entering into this Agreement in reliance
on, or in contemplation of the benefits of, the validity, enforceability,
collectability or value of any of the Collateral;

 

(k)                                 any payment by any Other Credit Party to the
Collateral Agent, any other Agent or any other Secured Party being held to
constitute a preference under Title 11 of the United States Code or any similar
Federal, foreign or state law, or for any reason any Agent or any other Secured
Party being required to refund such payment or pay such amount to any Other
Credit Party or someone else;

 

(l)                                     any other action taken or omitted to be
taken with respect to the Guaranteed Obligations, or the security and collateral
therefor, whether or not such action or omission prejudices any Guarantor or
increases the likelihood that any Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof, it being the unambiguous
and unequivocal intention of each Guarantor that such Guarantor shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action or omission whatsoever, whether or not
contemplated, and whether or not otherwise

 

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or particularly described herein, except for the full and final payment and
satisfaction of the Guaranteed Obligations in cash;

 

(m)                             the fact that all or any of the Guaranteed
Obligations cease to exist by operation of law, including by way of a discharge,
limitation or tolling thereof under applicable Debtor Relief laws;

 

(n)                                 the existence of any claim, set-off or other
right which any Guarantor may have at any time against any Other Credit Party,
the Collateral Agent, any other Secured Party or any other Person, whether in
connection herewith or any unrelated transactions; provided that nothing herein
shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim; or

 

(o)                                 any other circumstance that might in any
manner or to any extent otherwise constitute a defense available to, vary the
risk of, or operate as a discharge of, such Guarantor as a matter of law or
equity.

 

All waivers herein contained shall be without prejudice to the right of the
Collateral Agent at its option to proceed against any Credit Party or any other
Person, whether by separate action or by joinder.

 

1.6.                            Security for Guaranty

 

Each Guarantor party hereto authorizes the Collateral Agent in accordance with
the terms and subject to the conditions set forth in the Collateral Documents,
(i) to take and hold security for the payment of the Guaranteed Obligations and
to exchange, enforce, waive and release any such security, (ii) to apply such
security and direct the order or manner of sale thereof as the Collateral Agent
in its sole discretion may determine and (iii) to release or substitute any one
or more endorsees, other Guarantors or Other Credit Parties.  The Collateral
Agent may, at its election, in accordance with the terms and subject to the
conditions set forth in the Collateral Documents, foreclose on any security held
by it by one or more judicial or nonjudicial sales, or exercise any other right
or remedy available to it against any Credit Party, or any security, without
affecting or impairing in any way the liability of any Guarantor hereunder.

 

1.7.                            Agreement to Pay; Subordination of Subrogation
Claims

 

In furtherance of the foregoing and not in limitation of any other right that
the Collateral Agent, any other Agent or any other Secured Party has at law or
in equity against any Guarantor by virtue hereof, upon the failure of any Other
Credit Party to pay any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, after notice of prepayment or
otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to
be paid, to the Collateral Agent or such other Secured Party as designated
thereby in cash the amount of such unpaid Guaranteed Obligations.  Upon payment
by any Guarantor of any sums to the Collateral Agent or any Secured Party as
provided above, all rights of such Guarantor against any Other Credit Party
arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall (including, without limitation, in
the case of any Guarantor, any rights of such Guarantor arising under Article 2
of this Agreement) in all respects be subordinate and junior in right of payment
to the prior indefeasible payment in full in cash of all the Guaranteed

 

10

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Obligations and Discharge of Finance Obligations.  No failure on the part of any
Other Credit Party or any other Person to make any payments in respect of any
subrogation, contribution, reimbursement, indemnity or similar right (or any
other payments required under applicable law or otherwise) shall in any respect
limit the obligations and liabilities of any Guarantor with respect to its
obligations hereunder.  If any amount shall erroneously be paid to any Guarantor
on account of such subrogation, contribution, reimbursement, indemnity or
similar right, such amount shall be held in trust for the benefit of the Secured
Parties and shall forthwith be turned over to the Collateral Agent in the exact
form received by such Guarantor (duly endorsed by such Guarantor to the
Collateral Agent, if required) to be credited against the payment of the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms of the Credit Documents.

 

1.8.                            Stay of Acceleration

 

If acceleration of the time for payment of any amount payable by any Other
Credit Party under or with respect to the Guaranteed Obligations is stayed upon
the insolvency or bankruptcy of such Other Credit Party, all such amounts shall
nonetheless be payable by each Guarantor guaranteeing such Guaranteed
Obligations hereunder.

 

1.9.                            No Set-Off

 

No act or omission of any kind or at any time on the part of any Secured Party
in respect of any matter whatsoever shall in any way affect or impair the rights
of the Collateral Agent or any other Secured Party to enforce any right, power
or benefit under this Agreement, and no set-off, claim, reduction or diminution
of any Guaranteed Obligation or any defense of any kind or nature which any
Guarantor has or may have against any Other Credit Party or any Secured Party
shall be available against the Collateral Agent or any other Secured Party in
any suit or action brought by the Collateral Agent or any other Secured Party to
enforce any right, power or benefit provided for by this Agreement; provided
that nothing herein shall prevent the assertion by any Guarantor of any such
claim by separate suit or compulsory counterclaim.  Nothing in this Agreement
shall be construed as a waiver by any Guarantor of any rights or claims which it
may have against any Secured Party hereunder or otherwise, but any recovery upon
such rights and claims shall be had from such Secured Party separately, it being
the intent of this Agreement that each Guarantor shall be unconditionally,
absolutely and jointly and severally obligated to perform fully all its
obligations, covenants and agreements hereunder for the benefit of each Secured
Party.

 

2.                                      INDEMNIFICATION, SUBROGATION AND
CONTRIBUTION

 

2.1.                            Indemnity and Subrogation

 

In addition to all such rights of indemnity and subrogation as the Guarantors
may have under applicable law (but subject to Section 1.7 above), with respect
to any Guaranteed Obligations that are initially incurred by a Guarantor (the
Responsible Guarantor) but are paid by a Guarantor other than the Responsible
Guarantor (the Paying Guarantor), (i) the Responsible Guarantor shall indemnify
the Paying Guarantor for the full amount of such payment, (ii) the Paying
Guarantor shall be fully subrogated to the rights of the person to whom such
payment shall have been made (to the extent of such payment) against the
Responsible Guarantor and (iii) if any assets of any

 

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Guarantor (other than the Responsible Guarantor) shall be sold pursuant to any
Collateral Document to satisfy a claim of any Secured Party, the Responsible
Guarantor shall indemnify such other Guarantor in an amount equal to the greater
of the book value or the fair market value of the assets so sold.

 

2.2.                            Contribution and Subrogation

 

Each Guarantor (a Contributing Guarantor) agrees (subject to Section 1.7 above)
that, if a payment shall be made by any other Guarantor under this Agreement or
assets of any other Guarantor shall be sold pursuant to any Collateral Document
to satisfy a claim of any Secured Party and such other Guarantor (the Claiming
Guarantor) shall not have been fully indemnified by the Responsible Guarantor as
provided in Section 2.1, the Contributing Guarantor shall indemnify the Claiming
Guarantor in an amount equal to the amount of such payment or the greater of the
book value or the fair market value of such assets, as the case may be, in each
case multiplied by a fraction the numerator of which shall be the net worth of
the Contributing Guarantor on the date that the obligation(s) supporting such
claim were incurred under this Agreement and the denominator of which shall be
the aggregate net worth of all the Guarantors on such date (or, in the case of
any Guarantor becoming a party hereto pursuant to Section 5.11, the date of the
Credit Party Accession Agreement executed and delivered by such Guarantor).  Any
Contributing Guarantor making any payment to a Claiming Guarantor pursuant to
this Section 2.2 shall be subrogated to the rights of such Claiming Guarantor
under Section 2.1 to the extent of such payment, in each case subject to the
provisions of Section 1.7.

 

2.3.                            Keepwell

 

Each Qualified ECP Guarantor (as defined below) hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each Other Credit Party to
honor all of its obligations under this Agreement in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 2.3 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 2.3, or otherwise
under this Agreement, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section shall remain in
full force and effect until the Guaranteed Obligations are discharged. Each
Qualified ECP Guarantor intends that this Section 2.3 constitute, and this
Section 2.3 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Credit Party  for all purposes of
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 

For purposes of this Section 2.3, Qualified ECP Guarantor means, in respect of
any Swap Obligation, each Credit Party that has total assets exceeding
$10,000,000 at the time the relevant Guaranty or grant of the relevant security
interest becomes or would become effective with respect to such Swap Obligation
or such other Person constitutes an “eligible contract participant” under the
Commodity Exchange Act or any regulations promulgated thereunder and can cause
another Person to qualify as an “eligible contract participant” at such time by
entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

 

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3.                                      REPRESENTATIONS, WARRANTIES AND
COVENANTS

 

3.1.                            Representations and Warranties; Certain
Agreements

 

Each Guarantor other than the Company hereby represents, warrants and covenants
as follows:

 

(a)                                 All representations and warranties contained
in the Credit Agreement that relate to such Guarantor or to the Credit Documents
to which such Guarantor is a party, to the extent already qualified by
materiality, shall be true and correct in all respects, and, if not so already
qualified, shall be true and correct in all material respects, in any case on
and as of the date of this Agreement as if made on and as of such date (unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date); provided that each reference in such representation and warranty
to the Company’s knowledge shall, for the purposes of this Section 3.1(a) only,
be deemed to be a reference to such Guarantor’s knowledge.

 

(b)                                 Such Guarantor agrees to comply with each of
the covenants contained in the Credit Agreement that impose, or purport to
impose, through agreements with the Company, restrictions or obligations on such
Guarantor.

 

(c)                                  Such Guarantor acknowledges that any
default in the due observance or performance by such Guarantor of any covenant,
condition or agreement contained herein may constitute an Event of Default under
Section 10.1 of the Credit Agreement.

 

(d)                                 There are no conditions precedent to the
effectiveness of this Agreement that have not been satisfied or waived.

 

(e)                                  Such Guarantor has, independently and
without reliance upon the Collateral Agent or any other Secured Party and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Such Guarantor has
investigated fully the benefits and advantages which will be derived by it from
execution of this Agreement, and the Board of Directors (or persons performing
similar functions in case of a Guarantor which is not a corporation) of such
Guarantor has decided that execution, delivery and performance of this Agreement
and any other Credit Documents to be executed by such Guarantor is within its
purpose, in furtherance of its direct and/or indirect business interests, is in
its best interest and that it expects to derive benefit directly or indirectly,
from (i) successful operations of the Other Credit Parties and (ii) the credit
extended by the Lenders to the Company under the Credit Agreement, both in its
separate capacity and as a member of the group of companies.

 

(f)                                   (i) This Agreement is not given with
actual intent to hinder, delay or defraud any Person to which such Guarantor is
or will become, on or after the date hereof, indebted; (ii) such Guarantor has
received at least a reasonably equivalent value in exchange for the giving of
this Agreement; (iii) such Guarantor is Solvent on the date hereof (or, in the
case of any Guarantor becoming a party hereto pursuant to Section 5.11, the date
of the Credit Party Accession Agreement executed and delivered by such
Guarantor) and will not cease to be Solvent as a result of the giving of this
Agreement; (iv) such Guarantor is not engaged in a business or transaction, nor
is it about to engage in a business or transaction, for which

 

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any property remaining with such Guarantor constitutes an unreasonably small
amount of capital; and (v) such Guarantor does not intend to incur debts that
will be beyond such Guarantor’s ability to pay as such debts mature.

 

3.2.                            Information

 

Each of the Guarantors assumes all responsibility for being and keeping itself
informed of the financial condition and assets of the Other Credit Parties and
of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that none of the Collateral Agent, any
other Agent or any other Secured Party will have any duty to advise any of the
Guarantors of information known to it or any of them regarding such
circumstances or risks.

 

3.3.                            Subordination by Guarantors

 

In addition to the terms of subordination provided for under Section 1.7, each
Guarantor hereby subordinates in right of payment all indebtedness of the Other
Credit Parties owing to it, whether originally contracted with such Guarantor or
acquired by such Guarantor by assignment, transfer or otherwise, whether now
owed or hereafter arising, whether for principal, interest, fees, expenses or
otherwise, together with all renewals, extensions, increases or rearrangements
thereof, to the prior indefeasible payment in full in cash of the Guaranteed
Obligations, whether now owed or hereafter arising, whether for principal,
interest (including interest accruing during the pendency of any Insolvency or
Liquidation Proceeding, regardless of whether allowed or allowable in such
proceeding), fees, expenses or otherwise, together with all renewals,
extensions, increases or rearrangements thereof.

 

4.                                      SET-OFF

 

4.1.                            Right of Set-Off

 

In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of any Event of Default under the Credit Agreement, each Secured Party (and each
of its Affiliates) is authorized at any time and from time to time, without
presentment, demand, protest or other notice of any kind (all of such rights
being hereby expressly waived), to set off and to appropriate and apply any and
all deposits (general or special, time or demand, provisional or final) and any
other indebtedness at any time held or owing by such Secured Party (including,
without limitation, branches, agencies or Affiliates of such Secured Party
wherever located) to or for the credit or account of any Guarantor against
obligations and liabilities of such Guarantor then due to the Secured Parties
hereunder, under the other Credit Documents or otherwise, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event of
Default even though such charge is made or entered on the books of such Secured
Party subsequent thereto.  Each Guarantor hereby agrees that to the extent
permitted by law any Person purchasing a participation in a Loan, a Note or the
L/C Obligations, whether or not acquired pursuant to the arrangements provided
for in Section 12.6 of the Credit Agreement, may exercise all rights of set-off
with respect to its participation interest as fully as if such Person were a
Secured Party.

 

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5.                                      MISCELLANEOUS

 

5.1.                            Notices

 

(a)                                 Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission) and mailed, faxed or delivered, to the
address, facsimile number or (subject to subsection (a) below) electronic mail
address specified for notices:  (i) in the case of any Guarantor, as set forth
on the signature pages hereto; (ii) in the case of the Company, the Collateral
Agent or any Lender, as specified in or pursuant to Section 12.2 of the Credit
Agreement; (iii) in the case of the Collateral Agent, as specified in or
pursuant to Section 6.1 of the Pledge and Security Agreement; (iv) in the case
of any Hedge Bank as set forth in any applicable Swap Contract; (v) in the case
of any Cash Management Bank, as set forth in any applicable Cash Management
Agreement or (vi) in the case of any party, at such other address as shall be
designated by such party in a notice to the Administrative Agent and each other
party hereto.  All communications and notices hereunder shall be given as
provided in Section 12.2 of the Credit Agreement.

 

(b)                                 Electronic Communications.  Notices and
other communications hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Collateral Agent, provided that the foregoing shall
not apply to notices to any Lender or Issuing Lender if such Lender or Issuing
Lender, as applicable, has notified the Collateral Agent that it is incapable of
receiving notices by electronic communication.  The Collateral Agent may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

 

5.2.                            Benefit of Agreement

 

This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
provided that none of the Guarantors may assign or transfer any of its interests
and obligations without prior written consent of the Collateral Agent (and any
such purported assignment or transfer without such consent shall be void);
provided further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth in Section 12.6 of the Credit Agreement.  Upon the assignment by any
Senior Finance Party of all or any portion of its rights and obligations under
the Credit Agreement (including all or any portion of its Commitments and the
Loans owing to it) or any other Credit Document to any other Person, such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to such transferor or assignor herein or otherwise.

 

5.3.                            No Waivers; Non-Exclusive Remedies

 

No failure or delay on the part of any Agent or any Secured Party to exercise,
no course of dealing with respect to, and no delay in exercising any right,
power or privilege under this Agreement or any other Credit Document, or other
document or agreement contemplated hereby or thereby shall

 

15

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operate as a waiver thereof nor shall any single or partial exercise of any such
right, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies
provided herein and in the other Credit Documents are cumulative and are not
exclusive of any other rights or remedies provided by law.

 

5.4.                            Enforcement

 

The Secured Parties agree that this Agreement may be enforced only by (i) the
action of the Collateral Agent (acting upon the instructions of the Required
Lenders if required under the Credit Documents), or (ii) after the date on which
all of the Obligations have been paid in full, the holders of more than 50% of
the obligations under all Swap Contracts and Cash Management Agreements and that
no other Secured Party shall have any right individually to seek to enforce this
Agreement, it being understood and agreed that such rights and remedies may be
exercised by the Collateral Agent or the holders of at least 51% of the
outstanding obligations under all Cash Management Agreement and Swap Contracts,
as the case may be, for the benefit of the Secured Parties upon the terms of
this Agreement.

 

5.5.                            Amendments and Waivers

 

Any provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by each Guarantor directly
affected by such amendment or waiver (it being understood that the addition or
release of any Guarantor hereunder shall not constitute an amendment or waiver
affecting any Guarantor other than the Guarantor so added or released) and
either (i) at all times prior to the time at which all Obligations have been
paid in full, the Collateral Agent and the Administrative Agent (with the
consent of the Required Lenders or, to the extent required by Section 12.1 of
the Credit Agreement, such other portion of the Lenders as may be specified
therein) or (ii) at all times after the time at which the Obligations have been
paid in full, the holders of more than 50% of the obligations under all Swap
Contracts and Cash Management Agreements.

 

5.6.                            GOVERNING LAW

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.  THIS AGREEMENT IS SOLELY FOR THE
BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AND,
EXCEPT AS SET FORTH IN SECTION 12.6 OF THE CREDIT AGREEMENT, NO OTHER PERSONS
SHALL HAVE ANY RIGHT, BENEFIT, PRIORITY OR INTEREST UNDER, OR BECAUSE OF THE
EXISTENCE OF, THIS AGREEMENT.

 

5.7.                            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 ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY

 

16

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OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

 

5.8.                            JURISDICTION; CONSENT TO SERVICE OF PROCESS

 

(a)                                 EACH GUARANTOR IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR
PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN
CONTRACT OR IN TORT OR OTHERWISE, AGAINST ANY SECURED PARTY OR ANY RELATED PARTY
OF A SECURED PARTY IN ANY WAY RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
RELATING HERETO, IN ANY FORUM OTHER THAN THE SUPREME COURT OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, LITIGATION 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 COLLATERAL AGENT
OR ANY SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AGAINST THE COMPANY OR ANY OTHER GUARANTOR OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(b)                                 EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (a) OF THIS SECTION 5.8.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

 

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(c)                                  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 5.1 OF THIS
AGREEMENT.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

5.9.                            Limitation of law; Severability

 

(a)                                 All rights, remedies and powers provided in
this may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all of the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and be limited to the extent necessary so that they
will 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.

 

(b)                                 If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law:  (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Agents and
the other Secured Parties in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provisions in any other jurisdiction.

 

5.10.                     Counterparts; Integration; Effectiveness

 

This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.  This Agreement and the other Credit Documents
constitute the entire agreement and understanding among the parties hereto and
supersede any and all prior agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.  This Agreement shall become
effective with respect to each Guarantor when the Collateral Agent shall have
received counterparts hereof signed by itself and such Guarantor.

 

5.11.                     Additional Guarantors

 

It is understood and agreed that any Subsidiary of the Company that is required
by Section 8.10 or 9.15 of the Credit Agreement to become a Credit Party after
the date hereof shall automatically become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor hereunder by executing a
Credit Party Accession Agreement and counterpart hereof and delivering the same
to the Administrative Agent and Collateral Agent.  The execution and delivery of
any such instrument shall not require the consent of any other Guarantor or
other parts hereunder.  The rights and obligations of each Guarantor or other
party hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor as a party to this Agreement.

 

5.12.                     Termination; Release of Guarantors

 

(a)                                 Termination.  Upon the full, final and
irrevocable payment and performance of all Guaranteed Obligations, the
cancellation of all outstanding L/C Obligations and the

 

18

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termination of the Commitments under the Credit Agreement and all Swap
Agreements and Cash Management Agreements, this Agreement shall terminate and
have no further force or effect.

 

(b)                                 Release of Guarantors.  If all of the
capital stock of one or more of the Guarantors is sold or otherwise disposed of
or liquidated in compliance with the requirements of Section 9.5 or 9.6 of the
Credit Agreement (or such sale, other disposition or liquidation has been
approved in writing by the Required Lenders (or all or such other portion of the
Lenders, if required by Section 12.1 of the Credit Agreement) and the proceeds
of such sale, disposition or liquidation are applied in accordance with the
provisions of the Credit Agreement, to the extent applicable, such Guarantor or
Guarantors shall be released from this Agreement, and this Agreement shall, as
to each such Guarantor or Guarantors, terminate and have no further force or
effect (it being understood and agreed that the sale of one or more Persons that
own, directly or indirectly, all of the capital stock of any Guarantor shall be
deemed to be a sale of such Guarantor for purposes of this Section 5.12(b)).

 

5.13.                     Conflict

 

To the extent that there is a conflict or inconsistency between any provision
hereof, on the one hand, and any provision of the Credit Agreement, on the other
hand, the Credit Agreement shall control.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of the day and
year first above written.

 

GUARANTORS:

 

 

 

KLX Energy Services LLC

 

 

 

By:

/s/ Thomas P. McCaffrey

 

Name:

Thomas P. McCaffrey

 

Title:

President

 

 

 

 

Address:

 

 

 

 

 

KLX Energy Services LLC

 

1300 Corporate Center Way

 

Wellington, FL 33414

 

E-mail: Tom.McCaffrey@KLX.com

 

Telephone: 561-383-5100

 

 

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

 

KLX RE HOLDINGS LLC

 

 

 

 

By:

/s/ Thomas P. McCaffrey

 

Name:

Thomas P. McCaffrey

 

Title:

President

 

 

 

 

Address:

 

 

 

 

 

KLX RE Holdings LLC

 

1300 Corporate Center Way

 

Wellington, FL 33414

 

E-mail: Tom.McCaffrey@KLX.com

 

Telephone: 561-383-5100

 

 

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KLX ENERGY SERVICES HOLDINGS, INC.

 

 

 

 

By:

/s/ Thomas P. McCaffrey

 

Name:

Thomas McCaffrey

 

Title:

Vice President

 

 

 

 

KLX Energy Services Holdings, Inc.

 

1300 Corporate Center Way

 

Wellington, FL 33414

 

E-mail: Tom.McCaffrey@KLX.com

 

Telephone: 561-383-5100

 

 

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Agreed to and Accepted:

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

as Collateral Agent and Administrative Agent

 

 

 

 

By:

/s/ Kody J. Nerios

 

Name:

Kody J. Nerios

 

Title:

Authorized Officer

 

 

23

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