Exhibit 10.3

GUARANTY AND COLLATERAL AGREEMENT

THIS GUARANTY AND COLLATERAL AGREEMENT (as it may be amended, amended and
restated, supplemented or modified from time to time, this “Agreement”) is
entered into as of April 12, 2017, by and among each of the undersigned
identified on the signature pages hereto as Grantors (together with any other
entity that may become a party hereto as provided herein, each a “Grantor, and
collectively, the “Grantors”), and BANK OF MONTREAL, in its capacity as
collateral agent (the “Collateral Agent”) for itself and for the Agents acting
for and on behalf of the Secured Parties they respectively represent.

PRELIMINARY STATEMENTS

A. On even date herewith, Ultra Resources, Inc., a Delaware corporation (the
“Borrower”) entered into that certain Credit Agre with the Revolving
Administrative Agent and the Revolving Lenders (as amended, amended and
restated, restated, replaced, modified or supplemented from time to time, the
“Revolving Credit Agreement”) pursuant to which the Revolving Lenders have
agreed to make loans and other extensions of credit to the Borrower for the
purposes set forth therein.

B. On even date herewith, the Borrower entered into that certain Term Loan
Agreement with the Term Loan Administrative Agent and the Term Loan Lenders (as
amended, amended and restated, restated, replaced, modified or supplemented from
time to time, the “Term Loan Agreement”) pursuant to which the Term Loan Lenders
have agreed to make term loans to the Borrower.

C. On even date herewith, the Revolving Administrative Agent, the Term Loan
Administrative Agent and the Grantors party thereto entered into that certain
Collateral Agency Agreement with the Collateral Agent (as amended, amended and
restated, restated, replaced, modified or supplemented from time to time, the
“Collateral Agency Agreement”) pursuant to which the Collateral Agent has been
appointed Collateral Agent for the Secured Parties.

D. The Borrower and/or certain of the other Credit Parties and certain Secured
Swap Parties have entered into or may enter into certain Secured Swap
Agreements.

E. The Borrower and/or certain of the other Credit Parties and certain Treasury
Management Lenders have entered into or may enter into certain Treasury
Management Agreements.

F. The Guarantors, upon the terms and conditions stated herein, agree to
guarantee the obligations of the Borrower and the other Credit Parties under the
Revolving Credit Agreement, the Term Loan Agreement, the other Loan Documents,
the Secured Swap Agreements and the Treasury Management Agreements, and the
obligations of the Borrower and the other Credit Parties under the documents
governing any Additional Secured Obligations (such documents referred to above
in this paragraph F. being collectively referred to herein as the “Secured
Transaction Documents”).

G. The Secured Parties have conditioned their obligations under the Secured
Transaction Documents upon the execution and delivery by the Grantors of this
Agreement, and the Grantors have agreed to enter into this Agreement to secure
all obligations owing to the Secured Parties under the Secured Transaction
Documents.

H. Each Grantor has determined that valuable benefits will be derived by it as a
result of each of the Revolving Credit Agreement and the Term Loan Agreement and
the extensions of credit made (and to be made) by the respective Lenders
thereunder.

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

ACCORDINGLY, the Grantors and the Collateral Agent, on behalf of the Secured
Parties, hereby act and agree as follows:

ARTICLE I

DEFINITIONS

1.1. Terms Defined in UCC. Terms defined in the UCC which are not otherwise
defined in this Agreement are used herein as defined in the UCC (even if such
terms are capitalized herein and are not capitalized in the UCC).

1.2. Definitions of Certain Terms Used Herein. As used in this Agreement, in
addition to the terms defined in the introductory paragraph hereto and in the
Preliminary Statements, the following terms shall have the following meanings:

“Account” shall have the meaning set forth in Article 9 of the UCC.

“Account Debtor” means a Person who is obligated on an Account.

“Additional Agent” means the administrative agent or collateral agent or other
representative of the holders of any Additional Secured Obligations that
constitute revolver or term debt or other bank debt who (a) is duly appointed as
a representative for purposes related to the administration of the documents
pursuant to the credit agreement or other agreement governing such indebtedness
and (b) has executed a Collateral Agency Joinder.

“Additional Hedge Counterparty” means the hedge counterparty opposite the
Borrower or another Credit Party with respect to Secured Hedging Obligations (as
defined in the Collateral Agency Agreement) that has executed a Collateral
Agency Hedge Counterparty Joinder.

“Additional Secured Obligations” means any other indebtedness, obligations,
liabilities, indemnities and reimbursements owed by the Credit Parties and
designated as an “Additional Secured Obligation” for purposes of this Agreement
in a Collateral Agency Joinder, in each case to the extent permitted under the
Revolving Credit Agreement and the Term Loan Agreement to be issued and to be
secured by the Collateral as provided herein and in the Collateral Agency
Agreement, whether such indebtedness, obligations, liabilities, indemnities and
reimbursements are direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising.

“Additional Secured Parties” means (a) each Additional Agent, (b) each
Additional Hedge Counterparty, (c) each Additional Trustee and (d) any other
holders or secured parties (or equivalent term) under any Additional Secured
Obligations.

“Additional Trustee” means the trustee or other representative of the holders of
any Additional Secured Obligations that constitute senior notes or subordinated
notes or otherwise pursuant to an indenture who (a) is duly appointed as a
representative for purposes related to the administration of the documents
pursuant to the indenture or other agreement governing such indebtedness and
(b) has executed a Collateral Agency Joinder.

“Administrative Agents” means, collectively, (a) the Revolving Administrative
Agent, (b) the Term Loan Administrative Agent and (c) any Additional Agent.

 

2

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

“Agents” means, collectively, the Administrative Agents, any Additional Trustee
and any Additional Hedge Counterparty unless the context requires otherwise.

“Amendment” shall have the meaning set forth in Section 6.4 hereof.

“Article” means a numbered article of this Agreement, unless another document is
specifically referenced.

“As-extracted Collateral” shall have the meaning set forth in Article 9 of the
UCC.

“Assigned Contracts” means, collectively, all of the Grantors’ rights and
remedies under, and all moneys and claims for money due or to become due to any
Grantor under all written contracts, and any and all amendments, supplements,
extensions, and renewals thereof including all rights and claims of the Grantors
now or hereafter existing: (a) under any insurance, indemnities, warranties, and
guarantees provided for or arising out of or in connection with any of the
foregoing contracts; (b) for any damages arising out of or for breach or default
under or in connection with any of the foregoing contracts; (c) to all other
amounts from time to time paid or payable under or in connection with any of the
foregoing contracts; or (d) to exercise or enforce any and all covenants,
remedies, powers and privileges thereunder.

“Assumption Agreement” means an Assumption Agreement substantially in the form
of Annex 1 hereto.

“Chattel Paper” and “Electronic Chattel Paper” shall have the meanings set forth
in Article 9 of the UCC.

“Collateral” shall have the meaning set forth in Article III.

“Collateral Account” means any Deposit Account under the sole dominion and
control of the Collateral Agent established by the Collateral Agent as provided
in Section 9.1.

“Collateral Agency Joinder” shall have the meaning given to such term in the
Collateral Agency Agreement.

“Collateral Agency Hedge Counterparty Joinder” shall have the meaning given to
such term in the Collateral Agency Agreement.

“Collateral Equity Interests” means (a) the Pledged Equity and (b) any Equity
Interests other than Pledged Equity that constitute Collateral hereunder.

“Commercial Tort Claim” means a commercial tort claim (as that term is defined
in Article 9 of the UCC).

“Commodity Account” shall have the meaning set forth in Article 9 of the UCC.

“Commodity Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Collateral Agent, among any Credit Party, a
commodity intermediary holding such Credit Party’s assets, including funds and
commodity contracts, and the Collateral Agent with respect to collection and
control of all deposits, commodity contracts (and the application of value on
account of such commodity contracts) and other balances held in a Commodity
Account maintained by any Credit Party with such commodity intermediary.

 

3

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

“Control” shall have the meaning set forth in Article 8 or, if applicable, in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“Control Agreement” means a Deposit Account Control Agreement, a Securities
Account Control Agreement or a Commodity Account Control Agreement, as context
may require.

“Copyrights” means, with respect to any Person, all of such Person’s right,
title, and interest in and to the following: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; and (c) all rights corresponding to any of the foregoing throughout
the world.

“Credit Parties” means, collectively, the Borrower and the Guarantors.

“Deposit Account” shall have the meaning set forth in Article 9 of the UCC.

“Deposit Account Control Agreement” means an agreement, in form and substance
satisfactory to the Collateral Agent, among any Credit Party, a banking
institution holding such Credit Party’s funds, and the Collateral Agent with
respect to collection and control of all deposits and balances, and the
direction of disposition of funds, held in a Deposit Account maintained by any
Credit Party with such banking institution.

“Document” shall have the meaning set forth in Article 9 of the UCC.

“Effective Date” means (a) with respect to the Borrower and each other Grantor
party hereto on the date hereof, the date on which (i) the conditions precedent
to the “Effective Date” under and as defined in the Revolving Credit Agreement
have occurred and (ii) the conditions precedent to the “Effective Date” under
and as defined in the Term Loan Agreement have occurred, and (b) with respect to
each other Grantor, the “Effective Date” as defined in the Assumption Agreement
by means of which such Grantor becomes a party hereto.

“Equipment” shall have the meaning set forth in Article 9 of the UCC.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.

“Event of Default” means any “event of default” under a Secured Transaction
Document.

“Excluded Account” means (a) any Deposit Account, Commodity Account or
Securities Account so long as the average daily maximum balance in each such
account, individually, does not exceed $1,000,000 over any 30-day period and the
aggregate daily maximum balance of all such Deposit Accounts, Commodity Accounts
and Securities Accounts does not at any time exceed $10,000,000, (b) any Deposit
Account that is a zero balance account or a deposit account for which the
balance of such Deposit Account is transferred at the end of each date to a
deposit account that is not an Excluded Account, (c) fiduciary accounts,
(d) trust and suspense accounts of any Credit Party holding royalty obligations,
(e) accounts constituting cash collateral accounts permitted under the Revolving
Credit Agreement and the Term Loan Credit Agreement, (f) the Professional Fee
Escrow Account (as defined in the Plan of Reorganization (as defined in the
Revolving Credit Agreement and the Term Loan Credit Agreement) and (g) any other
Deposit Accounts exclusively used for trust, payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of any employees of the
Grantors.

 

4

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

“Excluded Assets” means:

(a) any motor vehicle and other vehicles subject to certificates of title in
which a lien can only be perfected by action with respect to a certificate of
title;

(b) any Patents, Copyrights, Trademarks or Licenses;

(c) any contract, license, agreement, instrument or other document to the extent
that the grant of a security interest therein is prohibited by, or constitutes a
breach or default under or results in the termination of or gives rise to a
right on the part of the parties thereto other than any Grantor to terminate (or
materially modify) or requires any consent not obtained under, any such
contract, license, agreement, instrument or other document, except to the extent
that the term in such contract, license, agreement, instrument or other document
providing for such prohibition, breach, default or right of termination or
modification or requiring such consent is ineffective under Sections 9-406,
9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of
any relevant jurisdiction or any other applicable law;

(d) any assets to the extent the grant of security interests in such assets
would (i) be prohibited by a Permitted Contractual Obligation binding on the
assets (including permitted liens, leases or licenses) or applicable law (in
each case, except to the extent such prohibition (A) could be waived by the
Borrower or any Subsidiary, (B) is the result of an attempt to circumvent the
collateral requirements of the Loan Documents, or (C) is unenforceable after
giving effect to applicable provisions of the UCC or other applicable law, other
than proceeds thereof, the assignment of which is expressly deemed effective
under the UCC or other applicable law notwithstanding such prohibitions), (ii)
require obtaining the consent of any Governmental Authority, or (iii) result in
material and adverse tax consequences to the Borrower, any Subsidiary or any
Parent Entity that is a Credit Party, in each case as reasonably determined by
the Borrower in writing delivered to the Collateral Agent;

(e) those assets with respect to which, in the reasonable judgment of the
Collateral Agent and the Borrower, the burdens, costs or consequences of
obtaining or perfecting such a security interest are excessive in view of the
benefits to be obtained by the Secured Parties therefrom; and

(f) Excluded Equity Interests;

provided, however, that “Excluded Assets” shall (1) not include any right to
receive proceeds from the sale or other disposition of Excluded Assets or any
proceeds, substitutions or replacements of Excluded Assets (unless such
proceeds, substitutions or replacements would constitute Excluded Assets) and
(2) with respect to the exclusions set forth in clause (c) above, not be
construed to limit, impair or otherwise affect the Collateral Agent’s continuing
security interests in the Borrower’s or any Grantor’s rights to or interests of
the Borrower or any Grantor in (x) monies due or to become due under any such
contract, license, agreement, instrument or other document (to the extent not
prohibited by such contract, license, agreement, instrument or other document
and applicable law), or (y) any proceeds from the sale, license, lease or other
disposition of any such contract, license, agreement, instrument or other
document. References in this Agreement to Collateral and to Goods, Equipment,
Investment Property, and other categories or types of Collateral do not include
Excluded Assets.

“Excluded Equity Interests” means (a) Excluded Foreign Equity Interests, (b) any
Equity Interests to the extent the pledge thereof would be prohibited by any
applicable law, (c) any Equity Interests of any Subsidiary to the extent the
pledge of such Equity Interests is prohibited by Permitted Contractual
Obligations existing on the Effective Date or at the time such Subsidiary is
acquired (provided that such Permitted Contractual Obligations have not been
entered into in contemplation of such Subsidiary being acquired) and (d) 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 Borrower or
any Subsidiary as reasonably determined by the Borrower.

 

5

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

“Excluded Foreign Equity Interests” means, with respect to each Foreign
Subsidiary, Equity Interests issued by such Foreign Subsidiary to the extent
necessary to prevent the Collateral from including more than the lesser of
(a) 66-2/3% of the total outstanding Equity Interests issued by such Foreign
Subsidiary, and (b) if a pledge of 66-2/3% of such Equity Interests would result
in adverse tax consequences to any Agent or Secured Party, then the maximum
percentage that would not result in such adverse consequences.

“Excluded Payments” shall have the meaning set forth in Section 6.6(b)(iii)
hereof.

“Exhibit” refers to a specific exhibit to this Agreement (unless another
document is specifically referenced) as from time to time supplemented by any
Assumption Agreements.

“Fixtures” shall have the meaning set forth in Article 9 of the UCC.

“Foreign Subsidiary” means any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.

“General Intangible” shall have the meaning set forth in Article 9 of the UCC.

“Goods” shall have the meaning set forth in Article 9 of the UCC.

“Grantor Claims” shall have the meaning set forth in Section 14.1 hereof.

“Guarantors” means, collectively, each Grantor other than the Borrower.

“Instrument” shall have the meaning set forth in Article 9 of the UCC.

“Inventory” shall have the meaning set forth in Article 9 of the UCC.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

“Lenders” means, collectively, the Revolving Lenders and the Term Loan Lenders.

“Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the
UCC.

“Licenses” means, with respect to any Person, all of such Person’s right, title,
and interest as a licensor in and to any and all licensing agreements or similar
arrangements in and to its Patents, Copyrights, or Trademarks.

“Loan Documents” means, collectively, the Revolving Loan Documents and the Term
Loan Documents.

“Merger” means (a) a merger, (b) a consolidation, or (c) the acquisition by an
entity of a significant portion of the assets of, or of a division of, another
entity.

“Patents” means, with respect to any Person, all of such Person’s right, title,
and interest (other than as a licensee) in and to: (a) any and all patents and
patent applications; (b) all inventions and improvements described and claimed
therein; (c) all reissues, divisions, continuations, renewals, extensions, and
continuations-in-part thereof; and (d) all rights corresponding to any of the
foregoing throughout the world.

 

6

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

“Permitted Contractual Obligation” means any enforceable contractual obligation
of the Borrower or any Subsidiary that is permitted by the terms of the Loan
Documents.

“Pledged Equity” means (a) the Equity Interests described or referred to on
Exhibit D and all other Equity Interests at any time owned by any Grantor in any
other Grantor, (b) all Equity Interests issued by any Foreign Subsidiary of the
Borrower or of a Guarantor (other than, in each case, Excluded Equity
Interests), (c) the certificates or instruments, if any, representing such
Equity Interests, (d) all dividends (cash, stock or otherwise), cash,
instruments, rights to subscribe, purchase or sell and all other rights and
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Equity Interests, (e) all
replacements, additions to and substitutions for any of the property referred to
in this definition, including, without limitation, claims against third parties,
(f) the proceeds, interest, profits and other income of or on any of the
property referred to in this definition and (g) all books and records relating
to any of the property referred to in this definition.

“Proceeds” shall have the meaning set forth in Article 9 of the UCC and, in any
event shall include, without limitation, all dividends or other income from the
Pledged Equity or other Collateral, collections thereon or distributions or
payments with respect thereto.

“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments and any other rights or claims to receive money which are General
Intangibles or which are otherwise included as Collateral.

“Revolving Administrative Agent” means Bank of Montreal in its capacity as the
“Administrative Agent” under the Revolving Credit Agreement, together with any
successors in such capacity.

“Revolving Lenders” shall have the meaning given to the term “Lenders” in the
Revolving Credit Agreement.

“Revolving Loan Documents” shall have the meaning given to the term “Loan
Documents” in the Revolving Credit Agreement.

“Revolving Secured Obligations” shall have the meaning given to the term
“Obligations” in the Revolving Credit Agreement.

“Revolving Secured Parties” shall have the meaning given to the term “Secured
Parties” in the Revolving Credit Agreement.

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

“Secured Obligations” means, collectively, (a) the Revolving Secured
Obligations, (b) the Term Loan Secured Obligations, (c) any Additional Secured
Obligations, (d) any other indebtedness, obligations, liabilities, indemnities
and reimbursements owed to any Secured Party under any Secured Transaction
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising,
and (e) any renewals, modifications, substitutions, rearrangements or extensions
of the foregoing.

 

7

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

“Secured Parties” means (a) the Revolving Secured Parties, (b) the Term Loan
Secured Parties and (c) any Additional Secured Parties.

“Secured Swap Agreements” shall have the meaning given to such term in the
Revolving Credit Agreement.

“Secured Swap Parties” shall have the meaning given to such term in the
Revolving Credit Agreement.

“Secured Transaction Documents” has the meaning given to such term in the
recitals hereto.

“Securities Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Collateral Agent, among any Credit Party, a
securities intermediary holding such Credit Party’s assets, including funds,
securities, financial assets, and the Collateral Agent with respect to
collection and control of all deposits, securities and other balances (including
direction of transfer or redemption of financial assets in which such Credit
Party has a security entitlement) held in a Securities Account maintained by any
Credit Party with such securities intermediary.

“Securities Account” shall have the meaning set forth in Article 8 of the UCC.

“Security” shall have the meaning set forth in Article 8 of the UCC.

“Stock Rights” means all dividends, instruments or other distributions and any
other right or property which the Grantors shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest and any right to receive earnings, in which the
Grantors now have or hereafter acquire any right, issued by an issuer of such
Equity Interest.

“Subsidiary” and “subsidiary” shall each have the meaning given to such term in
the Revolving Credit Agreement.

“Supporting Obligation” shall have the meaning set forth in Article 9 of the
UCC.

“Term Loan Administrative Agent” means Barclays Bank PLC in its capacity as the
“Administrative Agent” under the Term Loan Agreement, together with any
successors in such capacity.

“Term Loan Documents” shall have the meaning given to the term “Loan Documents”
in the Term Loan Agreement.

“Term Loan Lenders” shall have the meaning given to the term “Lenders” in the
Term Loan Agreement.

“Term Loan Secured Obligations” shall have the meaning given to the term
“Obligations” in the Term Loan Agreement.

“Term Loan Secured Parties” shall have the meaning given to the term “Secured
Parties” in the Term Loan Agreement.

“Trademarks” means, with respect to any Person, all of such Person’s right,
title, and interest (other than as a licensee) in and to the following: (a) all
trademarks (including service marks), trade names, trade dress, and trade styles
and the registrations and applications for registration thereof and the goodwill
of the business symbolized by the foregoing; (b) all licenses of the foregoing;
(c) all renewals of the foregoing; and (d) all rights corresponding to any of
the foregoing throughout the world.

 

8

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

“Treasury Management Agreements” shall have the meaning given to such term in
the Revolving Credit Agreement.

“Treasury Management Lenders” shall have the meaning given to such term in the
Revolving Credit Agreement.

“UCC” means the Uniform Commercial Code, as in effect from time to time, of the
State of New York or of any other state the laws of which are required as a
result thereof to be applied in connection with the attachment, perfection or
priority of, or remedies with respect to, Collateral Agent’s or any Secured
Party’s Lien (as defined in the Term Loan Agreement and Revolving Credit
Agreement) on any Collateral.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

1.3. Interpretive Provisions. Section 1.02(b) of the Collateral Agency Agreement
is hereby incorporated herein by reference mutatis mutandis as if stated
verbatim herein as agreements of the parties hereto.

ARTICLE II

GUARANTY

2.1. Guaranty.

(a) Each of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Collateral Agent, for the ratable benefit of the
Secured Parties and each of their respective successors, indorsees, transferees
and assigns, the prompt and complete payment and performance by the Borrower and
the Guarantors when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations (each such Guarantor’s guarantee contained
in this Article II, collectively, this “Guaranty”). This is a guarantee of
payment and not collection and the liability of each Guarantor is primary and
not secondary.

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Secured Transaction Documents shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors.

(c) Each Guarantor agrees that the Secured Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the Guaranty or affecting the rights and remedies of the
Collateral Agent or any other Secured Party hereunder.

(d) Each Guarantor agrees that if the maturity of any of the Secured Obligations
is accelerated by bankruptcy or otherwise, such maturity shall also be deemed
accelerated for the purpose of this Guaranty without demand or notice to such
Guarantor. This Guaranty shall remain in full force and effect until all of the
following have occurred: (i) the payment in full and discharge of all Secured
Obligations (other than unasserted contingent indemnification obligations) and
(ii) the termination or expiration of all commitments to extend credit under all
Secured Transaction Documents and the cancellation or termination or cash
collateralization of all outstanding letters of credit issued pursuant to any
such Secured Transaction Documents.

 

9

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

(e) No payment made by the Borrower, any of the Guarantors, any other guarantor
or any other Person or received or collected by the Collateral Agent or any
other Secured Party from the Borrower, any of the Guarantors, any other
guarantor 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 Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment (other than any payment made by
such Guarantor in respect of the Obligations or any payment received or
collected from such Guarantor in respect of the Secured Obligations), remain
liable for the outstanding Secured Obligations up to the maximum liability of
such Guarantor hereunder until the termination of this Agreement as set forth in
the last sentence of Section 2.1(d) above.

(f) To the extent that such Guarantor is a Qualified ECP Counterparty (as
defined in the Revolving Credit Agreement), each such Guarantor hereby
absolutely, unconditionally and irrevocably undertakes to provide to the
Borrower, each other Guarantor and each Restricted Subsidiary (as defined in the
Revolving Credit Agreement) such funds or other support as may be needed from
time to time by the Borrower, each other Guarantor and each Restricted
Subsidiary in order for the Borrower, each other Guarantor and each Restricted
Subsidiary to honor its Secured Obligations with respect to Swap Agreements (as
defined in the Revolving Credit Agreement), whether such Swap Agreements are
entered into directly by the Borrower, any Guarantor or any Restricted
Subsidiary or are guaranteed under this Agreement (provided, however, that such
Guarantor shall only be liable under this Section 2.1(f) for the maximum amount
of such liability that can be hereby incurred without rendering its obligations
under this Section 2.1(f), or otherwise under this Agreement or any Loan
Document, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount). The obligations of such
Guarantor under this Section 2.1(f) shall remain in full force and effect until
this Agreement is terminated in accordance with its terms. Each such Guarantor
intends that this Section 2.1(f) constitute a “keepwell, support, or other
agreement” for the benefit of the Borrower, each other Guarantor and each
Restricted Subsidiary for all purposes of Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

2.2. Payments. Each Guarantor hereby agrees and guarantees that payments
hereunder will be paid to the Collateral Agent without set-off or counterclaim
in dollars at the offices of the Collateral Agent specified pursuant to Schedule
1 of the Collateral Agency Agreement.

ARTICLE III

GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, assigns and grants to the Collateral Agent, on
behalf of and for the ratable benefit of the Secured Parties, a security
interest in all of its right, title and interest in, to and under all of the
following items, categories and types of personal property, whether now owned by
or owing to, or hereafter acquired by or arising in favor of such Grantor
(including under any trade name or derivations thereof), and whether owned or
consigned by or to, or leased from or to, such Grantor, and regardless of where
located (all of which will be collectively referred to as the “Collateral”),
including:

(a) all Accounts;

(b) all Chattel Paper;

(c) all Documents;

 

10

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

(d) all Equipment;

(e) all General Intangibles;

(f) all Goods (other than consumer goods);

(g) all Instruments;

(h) all Inventory;

(i) all Investment Property;

(j) all cash in possession of the Collateral Agent;

(k) all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(l) all Deposit Accounts;

(m) all Commercial Tort Claims listed on Exhibit G hereto;

(n) all Securities Accounts;

(o) all Commodity Accounts;

(p) all Assigned Contracts and all Swap Agreements;

(q) all Pledged Equity;

(r) all Fixtures;

(s) all As-extracted Collateral;

(t) and all accessions to, substitutions for and replacements, Proceeds
(including Stock Rights), insurance proceeds and products of the foregoing,
together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records related
thereto and any General Intangibles at any time evidencing or relating to any of
the foregoing;

to secure the prompt and complete payment and performance of the Secured
Obligations; provided, however, that “Collateral” shall not include any Excluded
Assets; and provided further, that if and when any property shall cease to be an
Excluded Asset, such property shall be deemed at all times from and after such
date to constitute Collateral.

ARTICLE IV

ACKNOWLEDGEMENTS, WAIVERS AND CONSENTS

4.1. Acknowledgments, Waivers and Consents.

(a) Each Grantor acknowledges and agrees that the obligations undertaken by it
under this Agreement involve the guarantee and/or the provision of collateral
security for such Grantor’s own obligations and the obligations of Persons other
than such Grantor and that such Grantor’s guarantee and/or provision of
collateral security for the Secured Obligations are absolute, irrevocable and
unconditional under any and all circumstances. In full recognition and
furtherance of the foregoing, each

 

11

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

Grantor understands and agrees, to the fullest extent permitted under applicable
law and except as may otherwise be expressly and specifically provided in the
Secured Transaction Documents, that each Grantor shall remain obligated
hereunder (including, without limitation, with respect to any guarantee made by
such Grantor hereby and the collateral security provided by such Grantor herein)
and the enforceability and effectiveness of this Agreement and the liability of
such Grantor, and the rights, remedies, powers and privileges of the Collateral
Agent and the other Secured Parties under this Agreement and the other Secured
Transaction Documents shall not be affected, limited, reduced, discharged or
terminated in any way, notwithstanding that, without any reservation of rights
against any Grantor and without notice to or further assent by any Grantor, any
of the following occur:

(i) any demand for payment of any of the Secured Obligations made by the
Collateral Agent or any other Secured Party shall be rescinded by the Collateral
Agent or such other Secured Party and any of the Secured Obligations shall be
continued;

(ii) the Secured Obligations, the liability of any Grantor or any other Person
upon or for any part thereof or any collateral security or guarantee therefor or
right of offset with respect thereto, shall be, from time to time, in whole or
in part, renewed, extended, amended, modified, accelerated, compromised, waived,
settled, surrendered or released by, or any indulgence or forbearance in respect
thereof granted by, the Collateral Agent or any other Secured Party;

(iii) the Secured Transaction Documents and any other documents executed and
delivered in connection therewith shall be amended, modified, supplemented or
terminated, in whole or in part in accordance with the respective terms thereof;

(iv) the Borrower, any other Grantor or any other Person shall from time to time
accept or enter into new or additional agreements, security documents,
guarantees or other instruments in addition to, in exchange for or relative to,
any Secured Transaction Document, all or any part of the Secured Obligations or
any Collateral now or in the future serving as security for the Secured
Obligations;

(v) any collateral security, guarantee or right of offset at any time held by
the Collateral Agent or any other Secured Party for the payment of the Secured
Obligations shall be sold, exchanged, waived, surrendered or released;

(vi) any change in the time, manner or place of payment of or in any other term
of, all or any part of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from any Secured Transaction Document or any
other agreement or instrument governing or evidencing any Secured Obligations,
including any increase or decrease in the rate of interest thereon; and

(vii) any other event shall occur which constitutes a defense or release of
sureties generally, other than the payment and performance in full of all
Secured Obligations.

(b) Each Grantor hereby expressly waives to the fullest extent permitted by law
any defense now or in the future arising by reason of,

(i) any default, failure or delay, willful or otherwise, in the payment or
performance of the Secured Obligations;

(ii) the illegality, invalidity or unenforceability of the Secured Transaction
Documents, any other agreement or instrument governing or evidencing any of the
Secured Obligations, any of the Secured Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Collateral Agent or any other Secured
Party;

 

12

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

(iii) any defense, set-off or counterclaim (in any case, whether based on
contract, tort or any other theory), other than a defense of payment or
performance, which may at any time be available to or be asserted by any Grantor
or any other Person against the Collateral Agent or any other Secured Party;

(iv) the insolvency, bankruptcy arrangement, reorganization, adjustment,
composition, liquidation, disability, dissolution or lack of power of any
Grantor or any other Person at any time liable for the payment of all or part of
the Secured Obligations or the failure of the Collateral Agent or any other
Secured Party to file or enforce a claim in bankruptcy or other proceeding with
respect to any Person; or any sale, lease or transfer of any or all of the
assets of the any Grantor, or any changes in the equity owners of any Grantor;

(v) the fact that any Collateral or liens or security interests contemplated or
intended to be given, created or granted as security for the repayment of the
Secured Obligations shall not be properly perfected or created, or shall prove
to be unenforceable or subordinate to any other lien or security interest, it
being recognized and agreed by each of the Grantors that it 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 for
the Secured Obligations;

(vi) any failure of the Collateral Agent or any other Secured Party to marshal
assets in favor of any Grantor or any other Person, to exhaust any collateral
for all or any part of the Secured Obligations, to pursue or exhaust any right,
remedy, power or privilege it may have against any Grantor or any other Person
or to take any action whatsoever to mitigate or reduce any Grantor’s liability
under this Agreement or any other Secured Transaction Document;

(vii) any present or future law, regulation or order of any jurisdiction
(whether of right or in fact) or of any agency which (A) provides that the
obligation of a surety or guarantor must neither be larger in amount nor in
other respects more burdensome than that of the principal, (B) reduces, amends,
restructures or otherwise affects any term of any Secured Transaction Document
or the Secured Obligations or (C) purports to prohibit the payment of the
Borrower, any other Grantor, any other Credit Party or any other guarantor of
the Secured Obligations of the principal or interest on the Secured Obligations;

(viii) the possibility that the Secured Obligations may at any time and from
time to time exceed the aggregate liability of such Grantor under this
Agreement;

(ix) any change in the corporate existence, structure or ownership of the
Borrower, any other Grantor, any other Credit Party or any other guarantor of
any of the Secured Obligations, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Borrower, any other Grantor, any other
Credit Party or any other guarantor of the Secured Obligations, or any of their
assets or any resulting release or discharge of any obligation of the Borrower,
any other Grantor, any other Credit Party or any other guarantor or any of the
Secured Obligations; or

(x) any other circumstance or act whatsoever by the Borrower, any other Credit
Party, any other guarantor of the Secured Obligations, the Collateral Agent, any
Lender or any other Person, other than a defense of payment or performance,
including any action or omission of the type described in Section 4.01(a) (with
or without notice to or knowledge of any Grantor), which constitutes, or might
be construed to constitute, an equitable or legal discharge or defense of the
Borrower

 

13

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

for the Secured Obligations, or of such Grantor under the Guaranty or with
respect to the collateral security provided by such Grantor herein, or which
might be available to a surety or guarantor, in bankruptcy or in any other
instance;

except in each case to the extent that any written amendment, settlement,
compromise, waiver or release expressly modifies or terminates the obligations
of such Grantor.

(c) Each Grantor hereby waives to the extent permitted by law: (i) except as
expressly provided otherwise in any Secured Transaction Document, all notices to
such Grantor, or to any other Person, including but not limited to, notices of
the acceptance of this Agreement, the Guaranty or the provision of collateral
security provided herein, or the creation, renewal, extension, modification,
accrual of any Secured Obligations, or notice of or proof of reliance by the
Collateral Agent or any other Secured Party upon the Guaranty or upon the
collateral security provided herein, or of default in the payment or performance
of any of the Secured Obligations owed to the Collateral Agent or any other
Secured Party and enforcement of any right or remedy with respect thereto; or
notice of any other matters relating thereto; the Secured Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the Guaranty
and the collateral security provided herein and no notice of creation of the
Secured Obligations or any extension of credit already or hereafter contracted
by or extended to the Borrower need be given to any Grantor; and all dealings
between the Borrower and any of the Grantors, on the one hand, and the
Collateral Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the Guaranty and on the collateral security provided herein; (ii) diligence and
demand of payment, presentment, protest, dishonor and notice of dishonor;
(iii) any statute of limitations affecting any Grantor’s liability hereunder or
the enforcement thereof; (iv) all rights of revocation with respect to the
Secured Obligations, the Guaranty and the provision of collateral security
herein; and (v) all principles or provisions of law which conflict with the
terms of this Agreement and which can, as a matter of law, be waived.

(d) When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Grantor, the Collateral Agent or any other
Secured Party may, but shall be under no obligation to, join or make a similar
demand on or otherwise pursue or exhaust such rights and remedies as it may have
against the Borrower, any other Grantor or any other Person or against any
collateral security or guarantee for the Secured Obligations or any right of
offset with respect thereto, and any failure by the Collateral Agent or any
other Secured Party to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Borrower, any other Grantor or any
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower, any other
Grantor or any other Person or any such collateral security, guarantee or right
of offset, shall not relieve any Grantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Collateral Agent or any
other Secured Party against any Grantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings. Neither the
Collateral Agent nor any other Secured Party shall have any obligation to
protect, secure, perfect or insure any lien or security interest at any time
held by it as security for the Secured Obligations or for the Guaranty or any
property subject thereto.

4.2. No Subrogation, Contribution or Reimbursement. Notwithstanding any payment
made by any Grantor hereunder or any set-off or application of funds of any
Grantor by the Collateral Agent or any other Secured Party, until the payment
and performance in full of all Secured Obligations no Grantor shall be entitled
to be subrogated to any of the rights of the Collateral Agent or any other
Secured Party against the Borrower or any other Grantor or any collateral
security or guarantee or right of offset held by the Collateral Agent or any
other Secured Party for the payment of the Secured Obligations, nor shall any

 

14

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

Grantor seek or be entitled to seek any indemnity, exoneration, participation,
contribution or reimbursement from the Borrower or any other Grantor in respect
of payments made by such Grantor hereunder, and each Grantor hereby expressly
waives, releases and agrees not to exercise any such rights of subrogation,
reimbursement, indemnity and contribution. Each Grantor further agrees that to
the extent that such waiver and release set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement, indemnity and contribution such Grantor may have
against the Borrower, any other Grantor or against any collateral or security or
guarantee or right of offset held by the Collateral Agent or any other Secured
Party shall be junior and subordinate to any rights the Collateral Agent and the
other Secured Parties may have against the Borrower and such Grantor and to all
right, title and interest the Collateral Agent and the other Secured Parties may
have in any collateral or security or guarantee or right of offset. The
Collateral Agent, for the benefit of the Secured Parties, may use, sell or
dispose of any item of Collateral or security as provided in this Agreement
without regard to any subrogation rights any Grantor may have, and upon any
disposition or sale, any rights of subrogation any Grantor may have shall
terminate.

4.3. Release. Each Guarantor consents and agrees that the Collateral Agent may
at any time, or from time to time, in compliance with the Secured Transaction
Documents and otherwise in its discretion:

(a) renew, extend or change the time of payment, and/or the manner, place or
terms of payment of all or any part of the Secured Obligations; and

(b) exchange, release and/or surrender all or any of the Collateral (including
the Pledged Equity), or any part thereof, by whomsoever deposited, which is now
or may hereafter be held by the Collateral Agent in connection with all or any
of the Secured Obligations; all in such manner and upon such terms as the
Collateral Agent may deem proper, and without notice to or further assent from
any Grantor that is a Guarantor, it being hereby agreed that each such Guarantor
shall be and remain bound upon this Agreement, irrespective of the value or
condition of any of the Collateral, and notwithstanding any such change,
exchange, settlement, compromise, surrender, release, renewal or extension, and
notwithstanding also that the Secured Obligations may, at any time, exceed the
aggregate principal amount thereof set forth in the Revolving Credit Agreement,
Term Loan Agreement, or any other agreement governing any Secured Obligations.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each Grantor represents and warrants to the Collateral Agent and the other
Secured Parties that:

5.1. Title, Perfection and Priority. The representations and warranties of the
Parent and the Borrower in the Revolving Credit Agreement and the Term Loan
Agreement concerning each Grantor, this Agreement, and the Collateral are true
and correct in all material respects (without duplication of any materiality
qualifier contained therein), except to the extent any such representations and
warranties are expressly limited to an earlier date, in which case, such
representations and warranties are true and correct in all material respects as
of such specified earlier date. When financing statements have been filed in the
appropriate offices against each Grantor in the locations listed on Exhibit E,
the Collateral Agent will have a validly perfected first priority security
interest in that Collateral of the Grantor in which a security interest may be
perfected by the filing of financing statements, subject only to liens or
security interests permitted under the Secured Transaction Documents.

5.2. Type and Jurisdiction of Organization, Organizational and Identification
Numbers. The type of entity of such Grantor, its state of organization, the
organizational number issued to it by its state

 

15

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

of organization and its federal employer identification number are set forth on
Exhibit A. Except as may be set forth in Exhibit A or in an applicable
Assumption Agreement, such Grantor has not had any other entity type,
jurisdiction of organization or organizational number, and has not been a party
to any Merger, during the past five years prior to its becoming a Grantor
hereunder; provided that if Grantor has been a party to such a Merger, Exhibit A
or the applicable Assumption Agreement sets forth the information required by
this Section 5.2 for each constituent party to such Merger.

5.3. Principal Location. Such Grantor’s mailing address and the location of its
place of business (if it has only one) or its chief executive office (if it has
more than one place of business), are disclosed in Exhibit A.

5.4. Deposit Accounts, Commodity Accounts and Securities Accounts. All of such
Grantor’s Deposit Accounts, Commodity Accounts and Securities Accounts as of the
Effective Date are listed on Exhibit B and any Excluded Accounts as of the
Effective Date are identified as such on Exhibit B.

5.5. Exact Names. Such Grantor’s name in which it has executed this Agreement is
the exact legal name of such Grantor as it appears in such Grantor’s
organizational documents, as amended, as filed with such Grantor’s jurisdiction
of organization as of the Effective Date. Except as may be described in
Exhibit A or in an applicable Assumption Agreement, such Grantor has not, during
the past five years prior to its becoming a party hereto, had any other name or
been a party to any merger or consolidation; provided that if Grantor has been a
party to such a Merger, Exhibit A or the applicable Assumption Agreement sets
forth the information required by this Section 5.2 for each constituent party to
such Merger.

5.6. Letter-of-Credit Rights and Chattel Paper on Effective Date. Exhibit C
lists all Letter-of-Credit Rights and Chattel Paper owned by such Grantor as of
the Effective Date, if any, with a value in excess of $1,000,000. All action by
such Grantor necessary or desirable to protect and perfect the Collateral
Agent’s lien and security interest on each item listed on Exhibit C that can be
accomplished by the filing of the financing statements in accordance with the
second sentence of Section 5.1 has been duly taken.

5.7. No Financing Statements, Security Agreements. No financing statement
describing all or any portion of the Collateral which has not lapsed or been
terminated naming such Grantor as debtor has been filed or is of record in any
jurisdiction except (a) for financing statements naming the Collateral Agent as
the secured party, (b) financing statements with respect to liens or security
interests permitted by Section 6.1(e), (c) financing statements being terminated
concurrently with the execution hereof, and (d) financing statements filed as a
precaution to describe personal property leased to a Grantor.

5.8. Pledged Equity.

(a) Exhibit D sets forth a complete and accurate list of all Pledged Equity
owned by such Grantor as of the Effective Date. Such Grantor is the direct, sole
beneficial owner and sole holder of record of the Pledged Equity listed on
Exhibit D as being owned by it, free and clear of any liens or security
interests except for liens or security interests permitted by the Secured
Transaction Documents. Such Grantor further represents and warrants that (i) all
Pledged Equity owned by it is duly authorized and validly issued and, if such
Pledged Equity is stock in a corporation, is fully paid and non-assessable,
(ii) with respect to any certificates delivered to the Collateral Agent
representing Pledged Equity, either such certificates are Securities as defined
in Article 8 of the UCC as a result of actions by the issuer or otherwise, or,
if such certificates are not Securities, such Grantor has so informed the
Collateral Agent so that the Collateral Agent may take steps to perfect its
security interest therein as a General Intangible, and (iii) no Pledged Equity
is held by a securities intermediary in, or carried in or credited to, a
Securities Account Control Agreement.

 

16

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

(b) In addition, except for any that have been obtained, as of the Effective
Date, no consent, approval, authorization, or other action by, and no giving of
notice, filing with, any governmental authority or any other Person is required
for the pledge by such Grantor of such Pledged Equity pursuant to this Agreement
or for the execution, delivery and performance of this Agreement by such
Grantor.

(c) Except as set forth in Exhibit D, as of the Effective Date such Grantor owns
100% of the issued and outstanding Equity Interests in each issuer that has
issued Pledged Equity to such Grantor.

5.9. Instruments, Securities and Documents. Exhibit D lists all Instruments,
Securities (other than Pledged Equity) and Documents constituting or evidencing
Collateral owned by such Grantor as of the Effective Date, if any, that such
Grantor is required to deliver to the Collateral Agent pursuant to Section 6.4
hereof.

5.10. Benefit to the Guarantor. The Borrower is a member of an affiliated group
of companies that includes each Guarantor, and the Borrower and the Guarantors
are engaged in related businesses. The Borrower is a subsidiary of the Parent
and each Guarantor (other than the Parent) is a Subsidiary of the Borrower and
each Guarantor’s guarantee and surety obligations pursuant to this Agreement
reasonably may be expected to benefit, directly or indirectly, it; and it has
determined that this Agreement is necessary and convenient to the conduct,
promotion and attainment of the business of such Guarantor and the Borrower.

ARTICLE VI

COVENANTS

From the date of this Agreement, and thereafter until this Agreement is
terminated, each Grantor agrees that:

6.1. General.

(a) Access to Records. Such Grantor will comply with the Parent’s and the
Borrower’s covenants contained in Section 8.08 of each of the Revolving Credit
Agreement and the Term Loan Agreement concerning maintenance of books and
records and provision of access to such records and the Collateral to the
Revolving Administrative Agent or Term Loan Administrative Agent (and their
respective designated representatives).

(b) Authorization to File Financing Statements; Ratification. Such Grantor
hereby authorizes the Collateral Agent to file financing statements and other
documents describing the Collateral in order to perfect the security interests
created hereby. Each Grantor hereby agrees to deliver or file such financing
statements, and to take such other actions, as may from time to time be
reasonably requested by the Collateral Agent in order to maintain the perfection
and priority described in Section 5.1 and, if applicable and subject to the
limitations herein, Control of, the Collateral owned by such Grantor. Any
financing statement filed by the Collateral Agent may be filed in any filing
office in any UCC jurisdiction and may (i) describe such Grantor’s Collateral
(1) as all assets of the Grantor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of Article 9 of the UCC of such jurisdiction, or (2) by any other description
which reasonably approximates the description contained in this Agreement, and
(ii) contain any other information required by part 5 of

 

17

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

Article 9 of the UCC for the sufficiency or filing office’s acceptance of any
financing statement or amendment, including whether such Grantor is an
organization, the type of organization and any organization identification
number issued to such Grantor. Such Grantor also agrees to furnish any such
information to the Collateral Agent promptly upon reasonable request.

(c) Further Assurances. Such Grantor will, if so reasonably requested by the
Collateral Agent, furnish to the Collateral Agent, as often as the Collateral
Agent reasonably requests, statements and schedules further identifying and
describing the Collateral owned by it and such other reports and information in
connection with its Collateral as the Collateral Agent may reasonably request,
all in such detail as the Collateral Agent may reasonably specify. Such Grantor
also agrees to take any and all actions necessary to defend title to the
Collateral against all persons and to defend, and effectuate and maintain, the
security interest of the Collateral Agent (for the benefit of the Secured
Parties) in its Collateral and the priority thereof against any lien or security
interest not expressly permitted hereunder.

(d) Disposition of Collateral. Such Grantor will not sell, lease or otherwise
dispose of the Collateral owned by it in violation of Section 9.11 of the
Revolving Credit Agreement or Section 9.11 of the Term Loan Agreement.

(e) Liens. Such Grantor will not create, incur, or suffer to exist any lien or
security interest on the Collateral owned by it except (i) the security interest
created by this Agreement, and (ii) other liens or security interests permitted
under the Secured Transaction Documents.

(f) Other Financing Statements. Such Grantor will not authorize the filing of
any financing statement naming it as debtor covering all or any portion of the
Collateral owned by it, except for (i) financing statements naming the
Collateral Agent as the secured party, (ii) financing statements with respect to
liens or security interests permitted by Section 6.1(e), and (iii) financing
statements filed as a precaution to describe personal property leased to a
Grantor. Such Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement naming the Collateral Agent as secured party without the
prior written consent of the Collateral Agent, subject to such Grantor’s rights
under Section 9-509(d)(2) of the UCC.

6.2. Electronic Chattel Paper. Upon request by the Collateral Agent, such
Grantor shall take all steps necessary to grant the Collateral Agent Control of
such Grantor’s electronic chattel paper in accordance with the UCC and all
“transferable records” as defined in each of the Uniform Electronic Transactions
Act and the Electronic Signatures in Global and National Commerce Act to the
extent necessary to ensure that the aggregate value of all electronic chattel
paper of all Grantors for which Control has not been granted to the Collateral
Agent does not exceed $1,000,000.

6.3. Inventory and Equipment. Each Grantor will perform its obligations with
respect to Inventory and Equipment under Section 8.06 of each of the Revolving
Credit Agreement and Term Loan Agreement and under any deed of trust or mortgage
that it grants to the Collateral Agent.

6.4. Delivery of Instruments, Certificated Securities, Chattel Paper and
Documents. Such Grantor will (a) deliver to the Collateral Agent,
(i) immediately upon the Effective Date, the originals of all certificated
Securities (together with stock or securities powers duly indorsed in blank by
an effective indorsement), (ii) within 30 days after the Effective Date (or such
later date as the Collateral Agent may agree in its sole discretion) deliver to
the Collateral Agent the originals of all Instruments (together with note powers
or other instruments of transfer duly indorsed in blank by an effective
indorsement) and all tangible Chattel Paper, in each case, constituting
Collateral owned by it on the Effective Date, and (iii) thereafter, upon request
by the Collateral Agent, deliver to the Collateral Agent any such tangible
Chattel Paper and Instruments (together with note powers or other instruments of
transfer duly indorsed in

 

18

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

blank by an effective indorsement) constituting Collateral, in each case, to the
extent necessary to ensure that the aggregate value of all Chattel Paper and
other Instruments constituting Collateral and owned by the Grantors for which
the originals have not been delivered to the Collateral Agent does not exceed
$1,000,000, (b) upon the Collateral Agent’s request, deliver to the Collateral
Agent any tangible negotiable Document evidencing or constituting Collateral to
the extent necessary to ensure that the aggregate value of all Documents
constituting Collateral and owned by the Grantors for which the Documents have
not been delivered to the Collateral Agent does not exceed $1,000,000, (c) with
respect to any Subsidiary of such Grantor that becomes a Subsidiary after the
Effective Date, deliver to the Collateral Agent within fifteen Business Days (or
such later date as the Collateral Agent may agree in its sole discretion) after
the formation or acquisition of such Subsidiary, the certificates representing
the Pledged Equity issued by such Subsidiary (if such Pledged Equity constitutes
certificated securities under the UCC) together with stock or securities powers
duly indorsed in blank by an effective indorsement, (d) following the Effective
Date, upon receipt thereof, deliver to the Collateral Agent any certificated
Securities constituting Collateral (other than certificated Securities of
Subsidiaries described in clause (c) immediately above), together with stock or
securities powers duly indorsed in blank by effective indorsement, to the extent
necessary to ensure that the aggregate value of all certificated Securities
described in this clause (d) constituting Collateral and owned by the Grantors
for which originals have not been delivered to the Collateral Agent does not
exceed $1,000,000, and (e) upon the Collateral Agent’s request, deliver to the
Collateral Agent a duly executed amendment to this Agreement (an “Amendment”),
substantially in the form of Exhibit F hereto, pursuant to which such Grantor
will identify and ratify the pledge of such additional Collateral. Such Grantor
hereby authorizes the Collateral Agent to attach each Amendment to this
Agreement and agrees that all additional Collateral owned by it set forth in
such Amendments shall be considered to be part of the Collateral.

6.5. Uncertificated Collateral Equity Interests. If as of the Effective Date,
any Collateral Equity Interest constitutes an uncertificated security (within
the meaning of Article 8 of the UCC), such Grantor thereof shall, within 30 days
following the Effective Date with respect to any such Collateral Equity Interest
constituting Pledged Equity and within 30 days after request by the Collateral
Agent (with respect to any other Collateral Equity Interest (or, in each case,
such later date as the Collateral Agent may agree in its sole discretion), cause
the issuer thereof to enter into a control agreement with such Grantor and the
Collateral Agent wherein such issuer agrees to comply with instructions with
respect to such Collateral Equity Interest originated by the Collateral Agent
without further consent of such Grantor or any other Person, such agreement to
be in form and substance reasonably satisfactory to the Collateral Agent and
sufficient to cause the Collateral Agent’s security interest in such Collateral
Equity Interest to be perfected by control within the meaning of Article 8 of
the UCC. If, after the Effective Date, any Grantor acquires any Collateral
Equity Interest constituting an uncertificated security, such Grantor shall
cause the issuer thereof, within 30 days after request by the Collateral Agent
(or such later date as the Collateral Agent may agree in its sole discretion) to
enter into a control agreement as described in the preceding sentence with
respect to such uncertificated Collateral Equity Interest (and making the
agreements described in the preceding sentence), such agreement to be in form
and substance reasonably satisfactory to the Collateral Agent and sufficient to
cause the Collateral Agent’s security interest in such Collateral Equity
Interests to be perfected by control within the meaning of Article 8 of the UCC.

6.6. Collateral Equity Interests.

(a) Registration of Collateral Equity Interests. After an Event of Default has
occurred and is continuing, such Grantor will permit any registerable Collateral
Equity Interest owned by it to be registered in the name of the Collateral Agent
or its nominee at any time at the option of an Administrative Agent.

 

19

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

(b) Exercise of Rights in Collateral Equity Interests.

(i) Subject to clause (ii) below, such Grantor shall have the right to exercise
all voting rights or other rights relating to the Collateral Equity Interest
owned by it for all purposes not inconsistent with this Agreement, the Revolving
Credit Agreement, the Term Loan Agreement or any other Secured Transaction
Document; provided however, that no vote or other right shall be exercised or
action taken which would have the effect of impairing the rights of the
Collateral Agent in respect of such Collateral Equity Interest.

(ii) Such Grantor will permit the Collateral Agent or its nominee at any time
during the continuance of an Event of Default to exercise, and such Grantor
hereby grants the Collateral Agent during the continuance of an Event of Default
the exclusive right to exercise, all voting rights or other rights relating to
the Collateral Equity Interest owned by such Grantor, including, without
limitation, exchange, subscription or any other rights, privileges, or options
pertaining to any Equity Interest or Investment Property constituting such
Collateral Equity Interest as if it were the absolute owner thereof.

(iii) So long as no Event of Default shall have occurred and be continuing, such
Grantor shall be entitled to collect and receive for its own use all cash
dividends and interest paid in respect of the Collateral Equity Interest owned
by it to the extent not in violation of the Credit Agreement; provided that, to
the extent, if any, that any Collateral Equity Interest is issued by a Person
other than a Credit Party, the following distributions and payments
(collectively referred to as the “Excluded Payments”) shall be delivered to the
Collateral Agent as and to the extent required in the following subsection (iv):
(A) dividends and interest paid or payable other than in cash in respect of such
Collateral Equity Interest, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any such
Collateral Equity Interest; (B) dividends and other distributions paid or
payable in cash in respect of such Collateral Equity Interest in connection with
a partial or total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in capital of an issuer; and (C) cash paid,
payable or otherwise distributed, in respect of principal of, or in redemption
of, or in exchange for, such Collateral Equity Interest; provided however, that
until actually paid, all rights to such distributions shall remain subject to
the liens and security interests created by this Agreement; and

(iv) All Excluded Payments, whenever paid or made, shall be delivered to the
Collateral Agent to hold as Pledged Equity and shall, if received by such
Grantor, be received in trust for the benefit of the Collateral Agent (on behalf
of the Secured Parties), be segregated from the other property or funds of such
Grantor, and be forthwith delivered to the Collateral Agent as Pledged Equity in
the same form as so received (with any necessary indorsement).

(c) Securities; Partnership and Limited Liability Company Interests. Each
Grantor agrees that:

(i) with respect to any Collateral Equity Interest owned by it that constitutes
a security under Article 8 of the UCC (including any such interest in any
limited partnership or limited liability company), such Grantor shall not,
without the Collateral Agent’s prior consent, cause or (to the extent such
Grantor controls the issuer of such Collateral Equity Interest) allow such
Collateral Equity Interest to cease to constitute a security under Article 8 of
the UCC;

(ii) with respect to any Collateral Equity Interest that constitutes a
“certificated security” under Article 8 of the UCC (including any such interest
in a limited partnership or limited liability company), such Grantor will not,
without the Collateral Agent’s prior consent, cause or (to the extent such
Grantor controls the issuer of such Collateral Equity Interest) allow such
Collateral Equity Interests to become an “uncertificated security” within the
meaning of Article 8 of the UCC;

 

20

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

(iii) with respect to any Collateral Equity Interest that constitutes an
“uncertificated security” under Article 8 of the UCC (including any such
interest in a limited partnership or limited liability company), such Grantor
will not, without the Collateral Agent’s prior consent, cause or (to the extent
such Grantor controls the issuer of such Collateral Equity Interests) allow such
Collateral Equity Interest to become a “certificated security” within the
meaning of the UCC;

(iv) with respect to any Collateral Equity Interest owned by it that constitutes
an interest in a limited partnership or limited liability company that is not a
security (within the meaning of Article 8 of the UCC) such Grantor shall not,
without the Collateral Agent’s prior consent, cause or (to the extent such
Grantor controls the issuer of such Collateral Equity Interest) allow the issuer
of such Collateral Equity Interest to elect or otherwise take any action that
would cause such Collateral Equity Interest to constitute a security for
purposes of Article 8 of the UCC; and

(v) with respect to any Pledged Equity owned by it such Grantor will not,
without the Collateral Agent’s prior consent, allow or cause such Pledged Equity
to be deposited in, carried in or credited to a Securities Account.

6.7. Commercial Tort Claims. Such Grantor shall promptly notify the Collateral
Agent of any commercial tort claim (as defined in the UCC) acquired by it that
is the subject of pending litigation and that could reasonably be expected to
result in a judgment or settlement in such Grantor’s favor in excess of
$1,000,000 and, upon request by the Collateral Agent, such Grantor shall enter
into an Amendment substantially in the form of Exhibit F hereto, granting to the
Collateral Agent (on behalf of the Secured Parties) a first priority security
interest in such Commercial Tort Claim.

6.8. Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a
letter of credit with a face amount in excess of $1,000,000, it shall promptly
notify the Collateral Agent thereof and, if requested to do so by the Collateral
Agent, make reasonable commercial efforts to cause the issuer and/or
confirmation bank to (a) consent to the assignment of the related
Letter-of-Credit Rights to the Collateral Agent and (b) agree to direct all
payments thereunder to a Deposit Account subject to a Deposit Account Control
Agreement, all in form and substance reasonably satisfactory to the Collateral
Agent.

6.9. Control Agreements. Within the time periods set forth in Sections 8.18 and
8.19(a) of the Revolving Credit Agreement and Sections 8.18 and 8.20(a) of the
Term Loan Agreement, for each Deposit Account, Securities Account and Commodity
Account (other than Excluded Accounts) that such Grantor at any time maintains,
such Grantor will, at all times, pursuant to a Control Agreement in form and
substance satisfactory to the Collateral Agent, cause the depository bank that
maintains such Deposit Account, the securities intermediary that maintains such
Securities Account, or the commodities intermediary that maintains such
Commodity Account, as applicable, to agree to comply at any time (a) with
entitlement orders from the Collateral Agent to such securities intermediary
with regard to a Securities Account, (b) with instructions from the Collateral
Agent to such depository bank, directing the disposition of funds from time to
time in such Deposit Account, and (c) with directions of the Collateral Agent to
such commodity intermediary for the application of value on account of commodity
contracts carried in such Commodity Account, in each case without further
consent of such Grantor and sufficient to grant the Collateral Agent with
“control” within the meaning of Section 8-106 of the UCC, Section 9-104 of the
UCC and Section 9-106 of the UCC, as applicable, and Grantor shall take such
other action as the Collateral Agent may reasonably request or approve in order
to perfect the Collateral Agent’s (on behalf of the Secured Parties) security
interest in such Deposit Account, Securities Account or Commodity Account,
including by control as aforesaid; provided that, such Grantor shall not cause
or permit any Excluded Account to cease to constitute an “Excluded Account”
(other than as a result of the closing of such Excluded Account) unless such
Deposit Account, Securities Account or Commodity Account, as applicable, is
subject to a Control Agreement in favor of the Collateral Agent in form and

 

21

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

substance satisfactory to the Collateral Agent. Notwithstanding the foregoing or
the terms of any Control Agreement, unless an Event of Default is continuing the
Collateral Agent will not enforce the terms of any Control Agreement in order to
take possession of, or prevent or limit the ability of any Grantor to direct the
disposition of, the funds and other assets held in any Deposit Account,
Securities Account or Commodity Account. The Borrower agrees to provide to the
Collateral Agent each notice that the Borrower provides to the Revolving
Administrative Agent (at the time such notice is provided to the Revolving
Administrative Agent) regarding the opening of a Deposit Account, Securities
Account or Commodity Account (other than an Excluded Account).

6.10. Change of Name or Location; etc. Such Grantor shall insure that Borrower
gives the notices required in Section 8.01(h) of the Revolving Credit Agreement
and Section 8.01(i) of the Term Loan Agreement with respect to any change in
Grantor’s name, jurisdiction of organization, or the other matters addressed in
such section of the Credit Agreement.

6.11. Additional Grantors. Each Grantor agrees to cause each of its Subsidiaries
that is required to become a party to this Agreement pursuant to Section 8.14(b)
of each of the Revolving Credit Agreement and the Term Loan Agreement to become
a Grantor for all purposes of this Agreement by executing and delivering an
Assumption Agreement substantially in the form of Annex 1 hereto.

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES

7.1. Remedies. During the continuation of an Event of Default:

(a) the Collateral Agent shall be entitled to exercise any or all of the
following rights and remedies to the fullest extent permitted under applicable
law:

(i) those rights and remedies provided in this Agreement or any other Secured
Transaction Document; provided that, this Section 7.1(a) shall not be understood
to limit any rights or remedies available to the Collateral Agent and the other
Secured Parties prior to an Event of Default;

(ii) those rights and remedies available to a secured party under the UCC
(whether or not the UCC applies to the affected Collateral) or under any other
applicable law (including, without limitation, any law governing the exercise of
a bank’s right of setoff or bankers’ lien) when a debtor is in default under a
security agreement;

(iii) the right to give notice of sole control or any other instruction,
directive or entitlement order under any Control Agreement and take any action
therein with respect to such Collateral, and the right to indorse and collect
any cash proceeds of the Collateral;

(iv) without notice, demand or advertisement of any kind to any Grantor or any
other Person (except as specifically provided in Section 10.1 or elsewhere
herein or in the UCC), the right to enter the premises of any Grantor where any
Collateral is located (through self-help and without judicial process), the
right to collect, receive, assemble, process, appropriate, sell, lease, assign,
grant an option or options to purchase or otherwise dispose of, deliver, or
realize upon, the Collateral or any part thereof in one or more parcels at
public or private sale or sales (which sales may be adjourned or continued from
time to time with or without notice and may take place at any Grantor’s premises
or elsewhere), for cash, on credit or for future delivery without assumption of
any credit risk, and upon such other terms as are commercially reasonable;

 

22

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

(v) concurrently with written notice to the applicable Grantor, the right to
transfer and register in its name or in the name of its nominee the whole or any
part of the Collateral Equity Interest, and, whether or not such Collateral
Equity Interest has been registered in the name of the Collateral Agent or its
nominee, the rights to exchange certificates or instruments representing or
evidencing Collateral Equity Interests for certificates or instruments of
smaller or larger denominations, to exercise the voting and all other rights as
a holder with respect thereto, to collect, receive and retain all dividends,
Stock Rights and other distributions made thereon and to otherwise act with
respect to the Collateral Equity Interests as though the Collateral Agent was
the outright owner thereof; and

(vi) the right to discharge past due taxes, assessments, charges, fees or liens
or security interests on the Collateral (except for such liens or security
interests as are specifically permitted hereunder).

(b) The Collateral Agent, on behalf of the Secured Parties, may comply with any
applicable state or federal law requirements in connection with a disposition of
the Collateral and compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.

(c) Upon any such public sale or sales or any such private sale or sales, the
Collateral Agent shall have the right, to the extent permitted by law, to
purchase for the benefit of the Collateral Agent and the other Secured Parties,
the whole or any part of the Collateral so sold, free of any right of equity
redemption, which equity redemption the Grantor hereby expressly releases.

(d) Until the Collateral Agent is able to effect a sale, lease, or other
disposition of Collateral, the Collateral Agent shall have the right, as
provided under applicable law, to hold or use Collateral, or any part thereof,
to the extent that it deems appropriate for the purpose of preserving or
protecting the Collateral or its value, enforcing this Agreement or perfecting
and maintaining the perfection and priority of the Collateral Agent’s security
interest in the Collateral. The Collateral Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of Collateral and to
enforce any of the Collateral Agent’s remedies (for the benefit of the
Collateral Agent and the other Secured Parties), with respect to such
appointment.

(e) Notwithstanding the foregoing, neither the Collateral Agent nor any other
Secured Party shall be required to (i) make any demand upon, or pursue or
exhaust any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Secured Obligations or to pursue or exhaust any of their rights or remedies with
respect to any Collateral therefor or any direct or indirect guarantee thereof,
(ii) marshal the Collateral or any guarantee of the Secured Obligations or to
resort to the Collateral or any such guarantee in any particular order, or
(iii) effect a public sale of any Collateral.

(f) Each Grantor recognizes that the Collateral Agent may be unable to effect a
public sale of any or all the Collateral Equity Interests and may be compelled
to resort to one or more private sales thereof in accordance with clause (a)
above. Each Grantor also acknowledges that any private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall not be deemed to have been made in a commercially unreasonable manner
solely by virtue of such sale being private. The Collateral Agent shall be under
no obligation to delay a sale of any of the Pledged Equity for the period of
time necessary to permit any Grantor or the issuer of the Collateral Equity
Interests to register such securities for public sale under the Securities Act
of 1933, as amended, or under applicable state securities laws, even if the
applicable Grantor and the issuer would agree to do so.

 

23

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

7.2. Grantor’s Obligations Upon Default. Upon the request of the Collateral
Agent during the continuance of an Event of Default, each Grantor will:

(a) assemble and make available to the Collateral Agent the Collateral and all
books and records relating thereto at any place or places reasonably specified
by the Collateral Agent, whether at a Grantor’s premises or elsewhere; and

(b) permit the Collateral Agent, by the Collateral Agent’s representatives and
agents, to enter, occupy and use any premises where all or any part of the
Collateral, or the books and records relating thereto, or both, are located, to
take possession of all or any part of the Collateral or the books and records
relating thereto, or both, to remove all or any part of the Collateral or the
books and records relating thereto, or both, and to conduct sales of the
Collateral, without any obligation to pay the Grantor for such use and
occupancy.

7.3. Grant of Intellectual Property License. For the purpose of enabling the
Collateral Agent to exercise the rights and remedies under this Article VII at
such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Collateral Agent, for the
benefit of the Collateral Agent and the other Secured Parties, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to any Grantor) to use, license or sublicense, during the
continuance of an Event of Default, any intellectual property rights now owned
or hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license 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.

ARTICLE VIII

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

8.1. Account Verification and Collection. During the continuation of an Event of
Default, the Collateral Agent shall have the right at any time at the Grantors’
expense to (a) verify the validity, amount or any other material information
relating to any Accounts, including verification with the relevant Account
Debtors, and (b) enforce collection of any such Accounts and to adjust, settle
or compromise the amount of payment thereof, in each case to the full extent
permitted by applicable law.

8.2. Authorization for Secured Party to Take Certain Action.

(a) Each Grantor irrevocably authorizes the Collateral Agent at any time and
from time to time and appoints the Collateral Agent as its attorney in fact to
do all acts and things necessary or desirable in the Collateral Agent’s sole
discretion to preserve and protect the Collateral and perfect and maintain the
perfection and priority of the Collateral Agent’s security interest in the
Collateral including, without limitation, to indorse and collect any cash
proceeds of the Collateral, and to contact and enter into one or more agreements
with the issuers of uncertificated securities which are Pledged Equity or with
securities intermediaries holding Pledged Equity as may be necessary or
advisable to give the Collateral Agent control over such Pledged Equity;
provided that, this authorization shall not relieve such Grantor of any of its
obligations under this Agreement, the Credit Agreement or under any other Loan
Document.

(b) All acts of said attorney or designee are hereby ratified and approved. The
powers conferred on the Collateral Agent, for the benefit of the Collateral
Agent and other Secured Parties, under this Section 8.2 are solely to protect
the Collateral Agent’s interests in the Collateral and shall not impose any duty
upon the Collateral Agent or any other Secured Party to exercise any such
powers. The Collateral Agent agrees that it shall not exercise any power or
authority granted to it under this Section 8.2 unless an Event of Default has
occurred and is continuing.

 

24

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

8.3. Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE
COLLATERAL AGENT AS ITS PROXY AND ATTORNEY-IN-FACT TO TAKE THOSE ACTIONS WITH
RESPECT TO ITS PLEDGED EQUITY THAT ARE DESCRIBED IN SECTION 6.6(b)(ii),
INCLUDING THE RIGHT TO VOTE SUCH PLEDGED EQUITY, WITH FULL POWER OF SUBSTITUTION
TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED EQUITY, THE
APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE
THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH
A HOLDER OF SUCH PLEDGED EQUITY WOULD BE ENTITLED (INCLUDING GIVING OR
WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF
SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE,
AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF
ANY SUCH PLEDGED EQUITY ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON
(INCLUDING THE ISSUER OF SUCH PLEDGED EQUITY OR ANY OFFICER OR AGENT THEREOF).
NOTWITHSTANDING THE FOREGOING, THE COLLATERAL AGENT MAY EXERCISE THE RIGHTS AND
POWERS PROVIDED IN THIS SECTION 8.3 ONLY DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT.

8.4. Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE
COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VIII IS COUPLED
WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS AGREEMENT
IS TERMINATED IN ACCORDANCE WITH SECTION 10.13. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY SECURED PARTY, NOR ANY
OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED
HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY
FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES
ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS
FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO
EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.

ARTICLE IX

COLLECTION AND APPLICATION OF RECEIVABLES AND OTHER COLLATERAL PROCEEDS

9.1. Collection and Application of Receivables and Other Collateral Proceeds.
The Collateral Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, and the Collateral Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default
(but not at any other time). If required by the Collateral Agent at any time
after the occurrence and during the continuance of an Event of Default, any
Proceeds constituting collections of such Receivables, when collected by such
Grantor, (a) shall be forthwith (and, in any event, within two Business Days) be
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Collateral Agent if required, in a Collateral Account maintained
under the sole dominion and control of the Collateral Agent, subject to
withdrawal by the Collateral Agent for the account of the Secured Parties only
as provided below in this Section, and (b) until so turned over, shall be held
by such Grantor in trust for the Secured Parties, segregated from other funds of
such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit. All Proceeds constituting collections of
Receivables while held by the Collateral Account bank (or by any Grantor in
trust for the benefit of the Secured

 

25

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

Parties) shall continue to be collateral security for the Secured Obligations of
the applicable Grantor and shall not constitute payment thereof until applied as
hereinafter provided. At any time when an Event of Default has occurred and is
continuing, at the Collateral Agent’s election, the Collateral Agent may apply
all or any part of the funds on deposit in the Collateral Account established by
the relevant Grantor to the payment of the Secured Obligations of such Grantor
then due and owing, such application to be made as set forth below in this
Section. In addition to the rights of the Secured Parties specified above with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds of Collateral received by any Grantor consisting of
cash, checks and other near cash items shall be held by such Grantor in trust
for the Secured Parties segregated from other funds of such Grantor, and shall,
at the request of the Collateral Agent, forthwith upon receipt by such Grantor,
be turned over to the Collateral Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Collateral Agent, if required).
All Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Collateral Account maintained under its sole dominion and
control. All Proceeds while held by the Collateral Agent in a Collateral Account
(or by such Grantor in trust for the Secured Parties) shall continue to be held
as collateral security for all the Secured Obligations and shall not constitute
payment thereof until applied as provided below in this Section. At any time
after the occurrence and during the continuance of an Event of Default, at the
Collateral Agent’s election, the Collateral Agent may apply all or any part of
Proceeds of any Grantor held in any Collateral Account in payment of the Secured
Obligations of such Grantor in such order as the Collateral Agent may elect in
compliance with the Secured Transaction Documents, and any part of such funds
which the Collateral Agent elects not so to apply and deems not required as
collateral security for such Secured Obligations shall be paid over from time to
time by the Collateral Agent to the Borrower or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Secured Obligations shall have been paid in full shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.

ARTICLE X

GENERAL PROVISIONS

10.1. Waivers. As provided in Section 9-612 of the UCC adopted in the State of
New York, any notice of the time and place of any public sale or the time after
which any private sale or other disposition of all or any part of the Collateral
may be made shall be deemed sent within a reasonable time if sent to the
Grantors, addressed as set forth in Article XI, after the occurrence of an Event
of Default and at least ten days prior to (a) the date of any such public sale
or (b) the time after which any such private sale or other disposition may be
made. To the extent it may lawfully do so, each Grantor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against the Collateral Agent or any other Secured Party, any
valuation, stay, appraisal, extension, moratorium, redemption or similar laws
and any and all rights or defenses it may have as a surety now or hereafter
existing which, but for this provision, might be applicable to the sale of any
Collateral made under the judgment, order or decree of any court, or under the
power of sale conferred by this Agreement, or applicable law. Except as
otherwise specifically provided herein, each Grantor hereby waives presentment,
demand, protest or any notice (to the maximum extent permitted by applicable
law) of any kind in connection with this Agreement or any Collateral.

10.2. Limitation on Collateral Agent’s and any Secured Party’s Duty with Respect
to the Collateral. The Collateral Agent shall have no obligation to clean-up or
otherwise prepare the Collateral for sale. The Collateral Agent and each other
Secured Party shall use reasonable care with respect to the Collateral in its
possession or under its control. Neither the Collateral Agent nor any other
Secured Party shall have any other duty as to any Collateral in its possession
or control or in the possession or control of any agent or nominee of the
Collateral Agent or such other Secured Party, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto.

 

26

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

10.3. Compromises and Collection of Collateral. The Grantors and the Collateral
Agent recognize that setoffs, counterclaims, defenses and other claims may be
asserted by obligors with respect to certain of the Receivables, that certain of
the Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, each Grantor agrees that the
Collateral Agent may at any time and from time to time, if an Event of Default
has occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Collateral Agent in
its sole discretion shall determine or abandon any Receivable, and any such
action by the Collateral Agent shall be commercially reasonable so long as the
Collateral Agent acts in good faith based on information known to it at the time
it takes any such action.

10.4. Secured Party Performance of Debtor Obligations. Without having any
obligation to do so, the Collateral Agent may during the continuance of an Event
of Default perform or pay any obligation which any Grantor has agreed to perform
or pay in this Agreement and the Grantors shall reimburse the Collateral Agent
for any amounts paid by the Collateral Agent pursuant to this Section 10.4. The
Grantors’ obligation to reimburse the Collateral Agent pursuant to the preceding
sentence shall be included in the Secured Obligations and payable on demand.

10.5. Specific Performance of Certain Covenants. Each Grantor acknowledges and
agrees that a breach of any of the covenants contained herein will cause
irreparable injury to the Collateral Agent and the other Secured Parties, that
the Collateral Agent and other Secured Parties have no adequate remedy at law in
respect of such breaches and therefore agrees that the covenants of the Grantors
contained herein shall be specifically enforceable against the Grantors.

10.6. No Waiver; Amendments; Cumulative Remedies. No delay or omission of the
Collateral Agent or any other Secured Party to exercise any right or remedy
granted under this Agreement or under any other Secured Transaction Document
shall impair such right or remedy or be construed to be a waiver of any default
thereunder or an acquiescence therein, and any single or partial exercise of any
such right or remedy shall not preclude any other or further exercise thereof or
the exercise of any other right or remedy. No waiver, amendment or other
variation of the terms, conditions or provisions of this Agreement whatsoever
(other than any Amendment or Assumption Agreement) shall be valid unless in
writing signed by the Collateral Agent and then only to the extent in such
writing specifically set forth. In addition, all such waivers or amendments
shall be effective only if given with the necessary approvals of the requisite
percentage of Revolving Lenders under the Revolving Credit Agreement and of the
requisite percentage of Term Loan Lenders under the Term Loan Agreement, if
applicable. All rights and remedies contained in this Agreement or by law
afforded shall be cumulative and all shall be available to the Collateral Agent
and the Secured Parties until the termination of this Agreement in accordance
with its terms.

10.7. Limitation by Law; Severability of Provisions. 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 provision of law, and all the
provisions of this Agreement are intended to be subject to all applicable
mandatory provisions of law that may be controlling and to be limited to the
extent necessary so that they shall not render this Agreement invalid,
unenforceable or not entitled to be recorded or registered, in whole or in part.
Any provision in this Agreement that is held to be inoperative, unenforceable,
or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of this Agreement are
declared to be severable.

 

27

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

10.8. Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Grantor
for liquidation or reorganization, should any Grantor become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of any Grantor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

10.9. Benefit of Agreement. The terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Grantors, the Collateral Agent and
the other Secured Parties and their respective successors and assigns (including
all persons who become bound as a debtor to this Agreement), except that no
Grantor shall have the right to assign its rights or delegate its obligations
under this Agreement or any interest herein, without the prior written consent
of the Collateral Agent. No sales of participations, assignments, transfers, or
other dispositions of any agreement governing the Secured Obligations or any
portion thereof or interest therein shall in any manner impair the lien and
security interest granted to the Collateral Agent, for the benefit of the
Collateral Agent and the other Secured Parties, hereunder.

10.10. Survival of Representations. All representations and warranties of the
Grantors contained in this Agreement shall survive the execution and delivery of
this Agreement.

10.11. Taxes and Expenses. In addition to, but not in qualification or
limitation of, any similar obligations under other Secured Transaction
Documents, any taxes (other than taxes constituting “Excluded Taxes” under the
Revolving Credit Agreement or the Term Loan Agreement) payable or ruled payable
by Federal or State authority in respect of this Agreement shall be paid by the
Grantors, together with interest and penalties, if any, upon and pursuant to the
terms set forth in Section 5.03 of the Revolving Credit Agreement or
Section 5.03 of the Term Loan Agreement. The Grantors shall reimburse the
Collateral Agent for any and all out-of-pocket expenses (including reasonable
attorneys’, auditors’ and accountants’ fees) paid or incurred by the Collateral
Agent in connection with the preparation, execution, delivery, administration,
collection and enforcement of this Agreement, in each case upon and pursuant to
the terms set forth in Section 12.03 of the Revolving Credit Agreement. Any and
all costs and expenses incurred by the Grantors in the performance of actions
required pursuant to the terms hereof shall be borne solely by the Grantors.

10.12. Headings. The title of and section headings in this Agreement are for
convenience of reference only, and shall not govern the interpretation of any of
the terms and provisions of this Agreement.

10.13. Termination. This Agreement shall continue in effect (notwithstanding the
fact that from time to time there may be no Secured Obligations outstanding)
until all of the events described in the last sentence of Section 2.1(d) hereof
have occurred.

10.14. Entire Agreement. This Agreement and the other Secured Transaction
Documents embody the entire agreement and understanding between the Grantors and
the Collateral Agent relating to the Collateral and supersede all prior
agreements and understandings between the Grantors and the Collateral Agent
relating to the Collateral.

 

28

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

10.15. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

10.16. CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT,
IN EITHER CASE, SITTING IN NEW YORK COUNTY, NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH
GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE
AGENT OR ANY SECURED PARTY OR GRANTOR TO BRING PROCEEDINGS IN THE COURTS OF ANY
OTHER JURISDICTION.

10.17. WAIVER OF JURY TRIAL. EACH GRANTOR, THE COLLATERAL AGENT AND EACH OTHER
SECURED PARTY HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

10.18. Indemnity. Section 12.03(b) and Section 12.03(d) of the Revolving Credit
Agreement and Term Loan Agreement, respectively, are hereby incorporated by
reference mutatis mutandis, as if stated verbatim herein as agreements and
obligations of each Grantor.

10.19. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. Delivery of an executed counterpart of this Agreement by facsimile
or other electronic transmission (e.g. .pdf) shall be effective as delivery of a
manually executed counterpart of this Agreement.

ARTICLE XI

NOTICES

11.1. Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
Section 11.2 below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier to the applicable
recipient at its address set forth on Exhibit A hereto, and all notices and
other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number as set forth on Exhibit A
hereto.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received, and notices
sent by telecopier shall be deemed to have been given when sent (except that, if
not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next Business Day for the
recipient), except that notices to the Collateral Agent shall be deemed to be
effective only when actually received by it. Notices delivered through
electronic communications to the extent provided in Section 11.2 below, shall be
effective as provided in such Section 11.2.

 

29

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

11.2. Electronic Communications. Notices and other communications hereunder may
be delivered or furnished by electronic communication (including e mail and
Internet or intranet web sites) pursuant to procedures approved by an
Administrative Agent, except that no such communication to the Collateral Agent
shall be effective unless delivered pursuant to a procedure approved by it. Each
of the Collateral Agent (with the approval of an Administrative Agent) and
Borrower 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.

Unless the Collateral Agent otherwise prescribes, (a) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (b) notices or communications
posted to an Internet or intranet web site shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (a) of notification that such notice or communication is
available and identifying the web site address therefor.

11.3. Effectiveness of Facsimile Documents and Signatures. This Agreement may be
transmitted and/or signed by facsimile to the recipient’s facsimile number set
forth on Exhibit A hereto. The effectiveness of this Agreement and signatures
shall, subject to applicable law, have the same force and effect as manually
signed originals and shall be binding on parties hereto. The Collateral Agent
may also require that any such documents and signatures be confirmed by a
manually signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

11.4. Change of Address, Etc. Any party hereto may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto.

11.5. Reliance by Collateral Agent. The Collateral Agent shall be entitled to
rely and act upon any notices purportedly given by or on behalf of any Agent
(including any Additional Hedge Counterparty), or any Grantor even if (a) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (b) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. Borower shall indemnify the Collateral Agent from all losses, costs,
expenses and liabilities resulting from the reliance by the Collateral Agent on
each notice purportedly given by or on behalf of each Agent, Additional Hedge
Counterparty or the Grantors. All telephonic notices to and other telephonic
communications with the Collateral Agent may be recorded by the Collateral
Agent, and each of the parties hereto hereby consents to such recording.

11.6. Change in Address for Notices. Each of the Grantors, the Collateral Agent
and the Lenders may change the address for service of notice upon it by a notice
in writing to the other parties.

 

30

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

ARTICLE XII

THE COLLATERAL AGENT

Bank of Montreal has been appointed Collateral Agent for the Secured Parties
hereunder pursuant to Article 2 of the Collateral Agency Agreement. It is
expressly understood and agreed by the parties to this Agreement that any
authority conferred upon the Collateral Agent hereunder is subject to the terms
of the delegation of authority made by the Secured Parties to the Collateral
Agent pursuant to the Collateral Agency Agreement, and that the Collateral Agent
has agreed to act (and any successor Collateral Agent shall act) as such
hereunder only on the express conditions contained in the Collateral Agency
Agreement. Any successor Collateral Agent appointed pursuant to Article 2 of the
Collateral Agency Agreement shall be entitled to all the rights, interests and
benefits of the Collateral Agent hereunder.

ARTICLE XIII

CONSENT TO PLEDGED EQUITY

Each Grantor, in its respective capacity as an issuer of Pledged Equity (in such
capacity, an “Issuer”), hereby (a) consents to the grant by each other Grantor
to the Collateral Agent, for the benefit of the Secured Parties, of a security
interest in and lien on all of the Pledged Equity, (b) represents to the
Collateral Agent that it has no rights of setoff or other claims against any of
the Pledged Equity, (c) acknowledges and agrees that it shall, upon demand by
the Collateral Agent, pay to the Collateral Agent, for the benefit of the
Secured Parties, any dividends and distributions due to any Grantor in
accordance with the terms hereof, and (d) consents to the transfer of such
Pledged Equity to the Collateral Agent or its nominee following an Event of
Default and to the substitution of the Collateral Agent or its nominee as a
partner in any partnership or as a member in any limited liability company with
all the rights and powers related thereto.

Each Grantor hereby authorizes and instructs each Issuer to comply with any
instruction received by it from the Collateral Agent in writing that (a) states
that an Event of Default has occurred and (b) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from such
Grantor.

ARTICLE XIV

SUBORDINATION OF INDEBTEDNESS

14.1. Subordination of All Grantor Claims. As used herein, the term “Grantor
Claims” means all debts and obligations of the Borrower or any other Grantor to
any Grantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the debtor thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by. After and during the continuation of an Event of Default, upon
the written direction of the Collateral Agent, no Grantor shall receive or
collect, directly or indirectly, from any obligor in respect thereof any amount
upon the Grantor Claims.

14.2. Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief or other insolvency proceedings
involving any Grantor, the Collateral Agent on behalf of the Secured Parties
shall have the right to prove their claim in any proceeding, so as to establish
their rights hereunder and receive directly from the receiver, trustee or other
court custodian, dividends and payments which would otherwise be payable upon
Grantor Claims. Each Grantor hereby assigns such dividends and payments to the
Collateral Agent for the benefit of the Secured Parties for

 

31

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

application against the Secured Obligations as provided under Section 3.6 of the
Collateral Agency Agreement. Should the Collateral Agent or any other Secured
Party receive, for application upon the Secured Obligations, any such dividend
or payment which is otherwise payable to any Grantor, and which, as between such
Grantor, shall constitute a credit upon the Grantor Claims, then upon payment in
full of the Secured Obligations, the intended recipient shall become subrogated
to the rights of the Collateral Agent and the other Secured Parties to the
extent that such payments to the Collateral Agent and the other Secured Parties
on the Grantor Claims have contributed toward the liquidation of the Secured
Obligations, and such subrogation shall be with respect to that proportion of
the Secured Obligations which would have been unpaid if the Collateral Agent and
the other Secured Parties had not received dividends or payments upon the
Grantor Claims.

14.3. Payments Held in Trust. In the event that notwithstanding Section 14.1 and
Section 14.2, any Grantor should receive any funds, payments, claims or
distributions which is prohibited by such Sections, then it agrees: (a) to hold
in trust for the Collateral Agent and the other Secured Parties an amount equal
to the amount of all funds, payments, claims or distributions so received, and
(b) that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions except to pay them promptly to the Collateral
Agent, for the benefit of the Secured Parties; and each Grantor covenants
promptly to pay the same to the Collateral Agent.

14.4. Liens Subordinate. Each Grantor agrees that, until the termination of this
Agreement as provided in the Secured Transaction Documents, any liens or
security interests securing payment of the Grantor Claims shall be and remain
inferior and subordinate to any liens or security interests securing payment of
the Secured Obligations, regardless of whether such encumbrances in favor of
such Grantor, the Collateral Agent or any other Secured Party presently exist or
are hereafter created or attach. Prior to the termination of this Agreement as
provided in the Secured Transaction Documents, no Grantor shall, without the
prior written consent of the Collateral Agent, (a) exercise or enforce any
creditor’s right it may have against any debtor in respect of the Grantor
Claims, or (b) foreclose, repossess, sequester or otherwise take steps or
institute any action or proceeding (judicial or otherwise, including without
limitation the commencement of or joinder in any liquidation, bankruptcy,
rearrangement, debtor’s relief or insolvency proceeding) to enforce any lien or
security interest held by it.

14.5. Notation of Records. Upon the request of the Collateral Agent, all
promissory notes and all accounts receivable ledgers or other evidence of the
Grantor Claims accepted by or held by any Grantor shall contain a specific
written notice thereon that the indebtedness evidenced thereby is subordinated
under the terms of this Agreement.

[Signature Pages Follow]

 

32

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

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this
Agreement as of the date first above written.

 

GRANTORS:     ULTRA RESOURCES, INC., a Delaware corporation     ULTRA PETROLEUM
CORP., a Yukon corporation     UP ENERGY CORPORATION, a Delaware corporation    
KEYSTONE GAS GATHERING, LLC, a Delaware limited liability company     ULTRA
WYOMING, LLC, a Delaware limited liability company     UPL PINEDALE, LLC, a
Delaware limited liability company     UPL THREE RIVERS HOLDINGS, LLC, a
Delaware limited liability company     ULTRA WYOMING LGS, LLC, a Delaware
limited liability company

    By:  

/s/ Garland R. Shaw

    Name:   Garland R. Shaw     Title:  

Senior Vice President and

Chief Financial Officer

 

Signature Page

Guaranty and Collateral Agreement

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

COLLATERAL AGENT:     BANK OF MONTREAL, as Collateral Agent     By:  

/s/ Gumaro Tijerina

    Name:   Gumaro Tijerina     Title:   Managing Director

 

Signature Page

Guaranty and Collateral Agreement