Exhibit 10.3

 

Execution Version

 

PRIORITY LIEN DEBT
PLEDGE AGREEMENT

 

dated as of March 28, 2017

 

between

 

FORESIGHT ENERGY LP

 

and

 

LORD SECURITIES CORPORATION, AS PRIORITY LIEN COLLATERAL TRUSTEE

 

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TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

SECTION 1.

DEFINITIONS; GRANT OF SECURITY

2

1.1

General Definitions

2

1.2

Definitions; Interpretation

4

 

 

 

SECTION 2.

GRANT OF SECURITY

4

2.1

Grant of Security

4

2.2

Collateral Trust Agreement

5

 

 

 

SECTION 3.

SECURITY FOR PRIORITY LIEN OBLIGATIONS; GRANTOR REMAINS LIABLE

5

3.1

Security for Priority Lien Obligations

5

3.2

Continuing Liability Under Collateral

5

 

 

 

SECTION 4.

CERTAIN PERFECTION REQUIREMENTS

6

4.1

Delivery Requirements

6

4.2

Control Requirements

6

4.3

Timing and Notice

6

 

 

 

SECTION 5.

REPRESENTATIONS AND WARRANTIES

6

5.1

Grantor Information and Status

7

5.2

Collateral Identification, Special Collateral

7

5.3

Ownership of Collateral and Absence of Other Liens

7

5.4

Status of Security Interest

8

5.5

Pledged Equity Interests

8

 

 

 

SECTION 6.

COVENANTS AND AGREEMENTS

8

6.1

Agreement with respect to Pledged Equity Interests

9

6.2

Ownership of Collateral and Absence of Other Liens

9

6.3

Status of Security Interest

9

6.4

Pledged Equity Interests, Investment Related Property

9

6.5

Information Regarding Collateral

11

 

 

 

SECTION 7.

FURTHER ASSURANCES

11

7.1

Further Assurances

11

 

 

 

SECTION 8.

PRIORITY LIEN COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT

12

8.1

Power of Attorney

12

8.2

No Duty on the Part of Priority Lien Collateral Trustee or Secured Parties

12

8.3

Appointment Pursuant to Credit Agreement

13

 

 

 

SECTION 9.

REMEDIES

13

9.1

Generally

13

9.2

Application of Proceeds

14

9.3

Sales on Credit

14

9.4

Pledged Equity Interests

15

9.5

Cash Proceeds

15

 

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SECTION 10.

PRIORITY LIEN COLLATERAL TRUSTEE

15

 

 

 

SECTION 11.

CONTINUING SECURITY INTEREST; TRANSFER OF LOANS

16

 

 

 

SECTION 12.

STANDARD OF CARE; PRIORITY LIEN COLLATERAL TRUSTEE MAY PERFORM

16

 

 

 

SECTION 13.

MISCELLANEOUS

17

 

 

 

SCHEDULE 5.1 — GENERAL INFORMATION

 

 

 

SCHEDULE 5.4 — FINANCING STATEMENTS

 

 

 

EXHIBIT A — UNCERTIFICATED SECURITIES CONTROL AGREEMENT

 

 

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This PRIORITY LIEN DEBT PLEDGE AGREEMENT, dated as of March 28, 2017 (as it may
be amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), between Foresight Energy LP, a Delaware limited partnership (the
“Grantor”), and Lord Securities Corporation, as collateral trustee for the
Secured Parties (as herein defined) (in such capacity as collateral trustee,
together with its successors and permitted assigns, the “Priority Lien
Collateral Trustee”).

 

RECITALS:

 

WHEREAS, reference is made to that certain Credit and Guaranty Agreement, dated
as of the date hereof (as it may be amended, restated, supplemented or otherwise
modified from time to time, including any replacement thereof if such
replacement credit agreement has been designated as “Priority Lien Debt” in
accordance with Section 3.8 of the Collateral Trust Agreement, the “Credit
Agreement”), by and among Foresight Energy LLC (the “Borrower”), the Grantor,
certain subsidiaries of the Borrower, as Guarantors, the Lenders party thereto
from time to time, The Huntington National Bank, as facilities administrative
agent (in such capacity, together with its successors and permitted assigns, the
“Facilities Administrative Agent”), Lord Securities Corporation, as term
administrative agent (in such capacity, together with its successors and
permitted assigns, the “Term Administrative Agent,” and together with the
Facilities Administrative Agent, the “Administrative Agents”) and the other
financial institutions party thereto;

 

WHEREAS, subject to the terms and conditions of the Credit Agreement, certain
Loan Parties (as defined in the Credit Agreement) have entered into and/or may
enter into one or more Secured Hedging Agreements with one or more Hedge Banks;

 

WHEREAS, subject to the terms and conditions of the Credit Agreement, certain
Loan Parties have entered into and/or may enter into one or more Secured Cash
Management Agreements with one or more Cash Management Banks;

 

WHEREAS, in consideration of the extensions of credit and other accommodations
of Lenders, Lender Parties, Hedge Banks and Cash Management Banks as set forth
in the Credit Agreement, the Secured Hedging Agreements and Secured Cash
Management Agreements, respectively, the Grantor has agreed to secure such
Grantor’s obligations under the Loan Documents, the Secured Hedging Agreements
and the Secured Cash Management Agreements (other than, in each case, Excluded
Swap Obligations) as set forth herein;

 

WHEREAS, reference is made to that certain Collateral Trust Agreement dated as
of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Collateral Trust Agreement”), by and among the Borrower,
the Grantor, the other Loan Parties from time to time party thereto, the
Facilities Administrative Agent, Wilmington Trust, National Association, as
trustee for the noteholders under the Indenture (as defined therein), Lord
Securities Corporation, as collateral trustee for the benefit of all Priority
Lien Secured Parties and all Parity Lien Secured Parties (as each such term is
defined therein) (in such capacity, together with its successors and permitted
assigns, the “Collateral Trustee”), and the other parties from time to time
party thereto; and

 

WHEREAS, in addition to the obligations under the Credit Agreement, the Secured
Hedging Agreements and the Secured Cash Management Agreements referred to above,
the Loan Parties may incur additional “Priority Lien Obligations” (as defined in
the Collateral Trust Agreement) and the Grantor has agreed to secure the
Priority Lien Obligations as set forth herein.

 

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NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the Grantor hereby
agrees with the Priority Lien Collateral Trustee, for the benefit of the Secured
Parties, as follows:

 

SECTION 1.                         DEFINITIONS; GRANT OF SECURITY.

 

1.1                               General Definitions.  In this Agreement, the
following terms shall have the following meanings:

 

“Agreement” shall have the meaning set forth in the preamble.

 

“Bankruptcy Event of Default” shall mean an Event of Default under Section 8.01
(f) or (g) of the Credit Agreement or any similar Event of Default under any
other Priority Lien Document.

 

“Borrower” shall have the meaning set forth in the recitals.

 

“Cash Proceeds” shall have the meaning assigned in Section 9.5.

 

“Collateral” shall have the meaning assigned in Section 2.1.

 

“Collateral Records” shall mean books, records, ledger cards, files,
correspondence, customer lists, supplier lists, blueprints, technical
specifications, manuals, computer software and related documentation, computer
printouts, tapes, disks and other electronic storage media and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.

 

“Collateral Support” shall mean all personal property assigned, hypothecated or
otherwise securing any Collateral and shall include any security agreement or
other agreement granting a lien or security interest in such real or personal
property.

 

“Collateral Trust Agreement” shall have the meaning set forth in the recitals.

 

“Collateral Trustee” shall have the meaning set forth in the recitals.

 

“Control” shall mean:  (1) with respect to any Securities Accounts, Security
Entitlements, control within the meaning of Section 9-106 of the UCC, (2) with
respect to any Uncertificated Securities, control within the meaning of
Section 8-106(c) of the UCC, (3) with respect to any Certificated Security,
control within the meaning of Section 8-106(a) or (b) of the UCC, and (4) with
respect to any “transferable record” (as that term is defined in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction), control within the meaning of Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or in Section 16 of
the Uniform Electronic Transactions Act as in effect in the jurisdiction
relevant to such transferable record.

 

“Controlling Priority Lien Representative” shall have the meaning set forth in
the Collateral Trust Agreement.

 

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“Credit Agreement” shall have the meaning set forth in the recitals.

 

“Discharge of Priority Lien Obligations” shall have the meaning set forth in the
Collateral Trust Agreement.

 

“Event of Default” shall have the meaning set forth in any Priority Lien
Document (including the Credit Agreement).

 

“Grantor” shall have the meaning set forth in the preamble.

 

“Investment Related Property” shall mean:  (i) all “investment property” (as
such term is defined in Article 9 of the UCC) and (ii) all Pledged Equity
Interests (regardless of whether classified as investment property under the
UCC).

 

“Permitted Lien” shall mean those Liens permitted pursuant to Section 7.01 of
the Credit Agreement.

 

“Pledged Equity Interests” shall mean all  interests in the Borrower, and each
series thereof including, without limitation, all limited liability company
interests listed on Schedule 5.2(I) under the heading “Pledged Equity Interests”
(as such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such limited liability company interests and
any interest of the Grantor on the books and records of the Borrower or on the
books and records of any securities intermediary pertaining to such interest and
all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
limited liability company interests and all rights as a member of the Borrower
and any other participation or interests in any equity or profits of the
Borrower including, without limitation, any trust and all management rights
relating to the Borrower.

 

“Priority Lien Collateral Trustee” shall have the meaning set forth in the
preamble.

 

“Priority Lien Document” shall have the meaning set forth in the Collateral
Trust Agreement

 

“Priority Lien Obligations” shall mean, without duplication, (i) all Priority
Lien Obligations (as defined in the Collateral Trust Agreement) and (ii) all
Secured Obligations (as defined in the Credit Agreement).  Notwithstanding
anything to the contrary herein, the “Priority Lien Obligations” shall not
include any Excluded Swap Obligations.

 

“Priority Lien Representative” shall have the meaning set forth in the
Collateral Trust Agreement.

 

“Priority Lien Secured Parties” shall have the meaning set forth in the
Collateral Trust Agreement.

 

“Secured Parties” shall mean each holder of a Priority Lien Obligation  and each
other Priority Lien Secured Party, including, without limitation, the Agents,
Lenders, L/C Issuers, Hedge Banks, Cash Management Banks and each other Priority
Lien Secured Party, and shall include, without limitation, all former Agents,
Lenders, L/C Issuers, Hedge Banks and Cash Management Banks to the extent that
any Priority Lien Obligations owing to such Persons were

 

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incurred while such Persons were Agents, Lenders, L/C Issuers, Hedge Banks or
Cash Management Banks, and such Priority Lien Obligations have not been paid or
satisfied in full.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that in the event that, by reason of
mandatory provisions of law, any or all of the perfection or priority of, or
remedies with respect to, any Collateral is governed by the Uniform Commercial
Code as enacted and in effect in a jurisdiction other than the State of New
York, the term “UCC” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions hereof
relating to such perfection, priority or remedies.

 

“United States” shall mean the United States of America.

 

1.2                               Definitions; Interpretation.

 

(a)                                 In this Agreement, the following capitalized
terms shall have the meaning given to them in the UCC (and, if defined in more
than one Article of the UCC, shall have the meaning given in Article 9 thereof):
Certificated Security, Proceeds, Record, Securities Account, Securities
Intermediary, Security Certificate, Security Entitlement, Supporting Obligations
and Uncertificated Security.

 

(b)                                 All other capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or  the
Collateral Trust Agreement, as applicable.  The incorporation by reference of
terms defined in the Credit Agreement shall survive any termination of the
Credit Agreement until this Agreement is terminated as provided in Section 11
hereof.  Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference. 
References herein to any Section, Appendix, Schedule or Exhibit shall be to a
Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof
unless otherwise specifically provided.  Unless the context requires otherwise,
any definition of or reference to any agreement, instrument or other document
(including any Organizational Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any Loan
Document or other Priority Lien Document). The use herein of the word “include”
or “including”, when following any general statement, term or matter, shall not
be construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not non-limiting language (such as “without limitation” or
“but not limited to” or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter. 
The terms lease and license shall include sub-lease and sub-license, as
applicable.  If any conflict or inconsistency exists between this Agreement and
the Credit Agreement, the Credit Agreement shall govern.  All references herein
to provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.

 

SECTION 2.                         GRANT OF SECURITY.

 

2.1                               Grant of Security.  The Grantor hereby grants
to the Priority Lien Collateral Trustee, for its benefit and for the benefit of
the Secured Parties, a security interest in and continuing lien on all of its
right, title and interest in, to and under the following property of the

 

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Grantor, in each case whether now or hereafter existing or in which the Grantor
now has or hereafter acquires an interest and wherever the same may be located
(all of which being hereinafter collectively referred to as the “Collateral”):

 

(a)                                 Pledged Equity Interests; and

 

(b)                                 to the extent not otherwise included above,
all Collateral Records, Collateral Support and Supporting Obligations relating
to any of the foregoing; and

 

(c)                                  to the extent not otherwise included above,
all Proceeds, products, accessions, rents and profits of or in respect of any of
the foregoing.

 

2.2                               Collateral Trust Agreement.  Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
Priority Lien Collateral Trustee pursuant to this Agreement and the exercise of
any right or remedy by the Priority Lien Collateral Trustee hereunder are
subject to the provisions of the Collateral Trust Agreement.  In the event of
any conflict between the terms of the Collateral Trust Agreement and this
Agreement, the terms of such Collateral Trust Agreement shall govern and
control.

 

SECTION 3.                         SECURITY FOR PRIORITY LIEN OBLIGATIONS;
GRANTOR REMAINS LIABLE.

 

3.1                               Security for Priority Lien Obligations.  This
Agreement secures, and the Collateral is collateral security for, the prompt and
complete payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
the payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§362(a) (and any successor provision thereof)), of all Priority Lien
Obligations.

 

3.2                               Continuing Liability Under Collateral. 
Notwithstanding anything herein to the contrary, (i) the Grantor shall remain
liable for all obligations under the Collateral and nothing contained herein is
intended or shall be a delegation of duties to the Priority Lien Collateral
Trustee or any other Secured Party, (ii) the Grantor shall remain liable under
each of the agreements included in the Collateral, including, without
limitation, any agreements relating to the Pledged Equity Interests, to perform
all of the obligations undertaken by it thereunder all in accordance with and
pursuant to the terms and provisions thereof and neither the Priority Lien
Collateral Trustee nor any Secured Party shall have any obligation or liability
under any of such agreements by reason of or arising out of this Agreement or
any other document related thereto nor shall the Priority Lien Collateral
Trustee nor any Secured Party have any obligation to make any inquiry as to the
nature or sufficiency of any payment received by it or have any obligation to
take any action to collect or enforce any rights under any agreement included in
the Collateral, including, without limitation, any agreements relating to the
Pledged Equity Interests, and (iii) the exercise by the Priority Lien Collateral
Trustee of any of its rights hereunder shall not release the Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral.

 

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SECTION 4.                         CERTAIN PERFECTION REQUIREMENTS

 

4.1                               Delivery Requirements.

 

With respect to any Certificated Securities included in the Collateral, the
Grantor shall deliver to the Priority Lien Collateral Trustee the Security
Certificates evidencing such Certificated Securities duly indorsed by an
effective indorsement (within the meaning of Section 8-107 of the UCC), or
accompanied by share transfer powers or other instruments of transfer duly
endorsed by such an effective endorsement, in each case, to the Priority Lien
Collateral Trustee or in blank.  In addition, the Grantor shall cause any
certificates evidencing any Pledged Equity Interests to be similarly delivered
to the Priority Lien Collateral Trustee regardless of whether such Pledged
Equity Interests constitute Certificated Securities.

 

4.2                               Control Requirements.  With respect to any
Securities Accounts or Securities Entitlements included in the Collateral, the
Grantor shall provide control with respect thereto to the Priority Lien
Collateral Trustee by causing the Securities Intermediary maintaining such
Securities Account or Security Entitlement to enter into an agreement in form
and substance reasonably satisfactory to the Priority Lien Collateral Trustee
pursuant to which the Securities Intermediary shall agree to comply with the
Priority Lien Collateral Trustee’s Entitlement Orders without further consent by
the Grantor.  With respect to any Uncertificated Security included in the
Collateral (other than any Uncertificated Securities credited to a Securities
Account), the Grantor shall promptly notify the Priority Lien Collateral Trustee
of the acquisition thereof and thereafter at the written request of the Priority
Lien Collateral Trustee, the Grantor shall cause (or, with respect to an issuer
that is not a Subsidiary or a controlled Affiliate of the Grantor, use
commercially reasonable efforts to cause), the issuer of such Uncertificated
Security to either (i) register the Priority Lien Collateral Trustee as the
registered owner thereof on the books and records of the issuer or (ii) execute
an agreement substantially in the form of Exhibit A hereto (or such other
agreement in form and substance reasonably satisfactory to the Priority Lien
Collateral Trustee), pursuant to which such issuer agrees to comply with the
Priority Lien Collateral Trustee’s instructions with respect to such
Uncertificated Security without further consent by the Grantor; provided that,
with respect to an issuer that is not a Subsidiary or a controlled Affiliate of
the Grantor, if after the use of commercially reasonable efforts the Grantor
cannot satisfy such requirement with respect to such Uncertificated Security
then the Grantor shall not be required to take any further action with respect
to such Uncertificated Security to ensure that the Priority Lien Collateral
Trustee has Control of such Uncertificated Security.

 

4.3                               Timing and Notice.  With respect to any
Collateral in existence on the Closing Date, except as otherwise expressly
stated above, the Grantor shall comply with the requirements of Section 4 on the
date hereof and, with respect to any Collateral hereafter owned or acquired,
such Grantor shall comply with such requirements within thirty (30) days (or
such longer period as the Priority Lien Collateral Trustee as directed by the
Controlling Priority Lien Representative may agree to) of Grantor acquiring
rights therein.  The Grantor shall promptly inform the Priority Lien Collateral
Trustee in writing of its acquisition of any Collateral for which any action is
required by Section 4 hereof.

 

SECTION 5.                         REPRESENTATIONS AND WARRANTIES.

 

The Grantor hereby represents and warrants that:

 

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5.1                               Grantor Information and Status.

 

(a)                                 as of the Closing Date, Schedule 5.1(A) sets
forth under the appropriate headings: (1) the full legal name of the Grantor,
(2) the type of organization of the Grantor, (3) the jurisdiction of
organization of the Grantor, (4) its organizational identification number, if
any, and (5) the jurisdiction where the chief executive office or its sole place
of business (or the principal residence if such Grantor is a natural person) is
located;

 

(b)                                 as of the Closing Date, except as provided
on Schedule 5.1(C), it has not changed its name, jurisdiction of organization,
chief executive office or sole place of business (or principal residence if the
Grantor is a natural person) or its corporate structure in any way (e.g., by
merger, consolidation, change in corporate form or otherwise), in each case,
within the past five (5) years;

 

(c)                                  as of the Closing Date, the Grantor has
been duly organized and is validly existing as an entity of the type as set
forth opposite the Grantor’s name on Schedule 5.1(A) solely under the laws of
the jurisdiction as set forth opposite the Grantor’s name on Schedule 5.1(A) and
remains duly existing as such.  the Grantor has not filed any certificates of
dissolution or liquidation, any certificates of domestication, transfer or
continuance in any other jurisdiction; and

 

(d)                                 the Grantor is not a “transmitting utility”
(as defined in Section 9-102(a)(80) of the UCC).

 

5.2                               Collateral Identification, Special
Collateral.  as of the Closing Date, Schedule 5.2 sets forth under the
appropriate headings all of the Grantor’s Pledged Equity Interests.

 

5.3                               Ownership of Collateral and Absence of Other
Liens.

 

(a)                                 (x) it owns the Collateral purported to be
owned by it or otherwise has the rights it purports to have in each item of
Collateral and, as to all Collateral whether now existing or hereafter acquired,
developed or created (including by way of lease or license), will continue to
own or have such rights in each item of the Collateral except where failure to
do so would not reasonably be expected to result in a Material Adverse Effect,
and (y) the Collateral is free and clear of any and all Liens other than any
Permitted Liens; and

 

(b)                                 other than any financing statements filed in
favor of the Priority Lien Collateral Trustee, the Grantor has not filed or
consented to the filing of any effective financing statement, fixture filing or
other instrument similar in effect under any applicable law covering all or any
part of the Collateral which is on file in any filing or recording office, in
each case to the

extent such filing effectuates a Lien other than a Permitted Lien, except for
(w) any filings, notices or recordations with respect to which the underlying
Indebtedness has been paid off or otherwise satisfied and (x) financing
statements for which duly authorized proper termination statements have been
delivered to the Priority Lien Collateral Trustee for filing.  Other than the
Priority Lien Collateral Trustee, the Collateral Trustee for the benefit of any
Parity Lien Secured Parties (as defined in the Collateral Trust Agreement) in
accordance with the Collateral Trust Agreement and any automatic control in
favor of a Securities Intermediary maintaining a Securities Account and no
Person is in Control of any Collateral.

 

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5.4                               Status of Security Interest.

 

(a)                                 upon the filing of financing statements
naming the Grantor as “debtor” and the Priority Lien Collateral Trustee as
“secured party” and describing the Collateral in the filing offices set forth
opposite such Grantor’s name on Schedule 5.4 hereof provided as of the Closing
Date, the security interest of the Priority Lien Collateral Trustee in all
Collateral that can be perfected by the filing of a financing statement under
the Uniform Commercial Code as in effect in any jurisdiction will constitute
valid, perfected, first priority Liens (if and to the extent perfection can be
achieved through the actions described in this Section 5.4(a)) subject in the
case of priority only, to any Permitted Liens with respect to Collateral.  Each
agreement purporting to give the Priority Lien Collateral Trustee Control over
any Collateral is effective to establish the Priority Lien Collateral Trustee’s
Control of the Collateral subject thereto;  and

 

(b)                                 no authorization, consent, approval or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body or any other Person is required for either (i) the pledge or
grant by the Grantor of the Liens purported to be created in favor of the
Priority Lien Collateral Trustee hereunder or (ii) the exercise by Priority Lien
Collateral Trustee of any rights or remedies in accordance with the UCC in
respect of any Collateral (whether specifically granted or created hereunder or
created or provided for by applicable law), except (A) for the filings
contemplated by clause (a) above and continuation statements in respect thereof,
(B) the actions described in Section 4.2 with respect to Collateral subject to
Control requirements, which actions have been taken and are in full force and
effect, and (C) as may be required, in connection with the disposition of any
Investment Related Property, by laws generally affecting the offering and sale
of Securities.

 

5.5                               Pledged Equity Interests.

 

(a)                                 It is the record and beneficial owner of the
Pledged Equity Interests free of all Liens, rights or claims of other Persons
other than Permitted Liens and there are no outstanding warrants, options or
other rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any Pledged Equity Interests;

 

(b)                                 No consent of any Person is necessary in
connection with the creation, perfection or first priority status of the
security interest of the Priority Lien Collateral Trustee in any Pledged Equity
Interests or the exercise by the Priority Lien Collateral Trustee of the voting
or other rights provided for in this Agreement or the exercise of remedies in
respect thereof except as contemplated by the Collateral Trust Agreement or as
have been obtained or waived; and

 

(c)                                  None of the Pledged Equity Interests are or
represent interests that by their terms provide that they are securities
governed by the Uniform Commercial Code of an applicable jurisdiction.

 

SECTION 6.                         COVENANTS AND AGREEMENTS.

 

The Grantor hereby covenants and agrees that:

 

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6.1                               Agreement with respect to Pledged Equity
Interests.  The Borrower and the Grantor hereby consent and agree that:

 

(i) any member of the Borrower (a “Member”) may pledge its membership interests
(“Membership Interests”) to secure obligations arising pursuant to loans or
other financial accommodations made to such Member and/or one or more of its
affiliates from time to time, (ii) a pledgee of Membership Interests, or such
pledgee’s permitted successors or assigns, may, in connection with the valid
exercise of such pledgee’s or such permitted successor’s or assign’s rights,
sell, transfer or otherwise dispose of all or part of the Membership Interests
(including a sale, transfer or disposition in connection with any foreclosure)
without any further consent of any Member and (iii) a pledgee of the Membership
Interests, or such pledgee’s permitted successors or assigns, in connection with
the valid exercise of such pledgee’s or such permitted successor’s or assign’s
rights, or any purchaser of the Membership Interests acquired the Membership
Interests in connection with the valid exercise of such rights (including in
connection with any foreclosure), may acquire the Membership Interests and
become a Member or be substituted for a Member of the Borrower without the
consent of any Member.

 

6.2                               Ownership of Collateral and Absence of Other
Liens.  Except for the security interest created by this Agreement, it shall not
create or suffer to exist any Lien upon or with respect to any of the
Collateral, except Permitted Liens, and the Grantor shall use its commercially
reasonable efforts in its business judgment to defend the Collateral against all
Persons at any time claiming any security interest therein.

 

6.3                               Status of Security Interest.

 

(a)                                 Subject to the limitations set forth in
subsection (b) of this Section 6.3, the Grantor shall maintain the security
interest of the Priority Lien Collateral Trustee hereunder in all Collateral as
valid, perfected, first priority Liens (subject to Permitted Liens).

 

(b)                                 Notwithstanding the foregoing, the Grantor
shall not be required to take any action to perfect any Collateral that can only
be perfected by Control except as and to the extent specified in Section 4
hereof.

 

6.4                               Pledged Equity Interests, Investment Related
Property.

 

(a)                                 Except as provided in the next sentence, in
the event the Grantor receives any dividends, interest or distributions on any
Pledged Equity Interest, upon the merger, consolidation, liquidation or
dissolution of any issuer of any Pledged Equity Interest, then (a) such
dividends, interest or distributions and securities or other property shall be
included in the definition of Collateral without further action and (b) the
Grantor shall promptly take all steps, if any, to the extent required hereunder
with respect to such Collateral, to ensure the validity, perfection, priority
and, if applicable, Control, subject to the priorities set forth in the
Collateral Trust Agreement, of the Priority Lien Collateral Trustee over such
Pledged Equity Interest (including, without limitation, delivery thereof to the
Priority Lien Collateral Trustee) and, pending any such action, to the extent an
Event of Default is occurring or continuing, the Grantor shall be deemed to hold
such dividends, interest, distributions, securities or other property in trust
for the benefit of the Priority Lien Collateral Trustee and shall segregate such
dividends, distributions, Securities or other property from all other property
of the Grantor.  Notwithstanding the foregoing, so long as the Priority Lien
Collateral Trustee shall not have delivered written notice of its intent to
exercise its remedies hereunder at any time while an Event of Default (other
than Bankruptcy Event of Default) shall have occurred and be continuing and so
long as no

 

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Bankruptcy Event of Default shall have occurred and be continuing, the Priority
Lien Collateral Trustee authorizes the Grantor to retain all cash dividends and
distributions paid and all payments of interest;

 

(b)                                 Voting

 

(i)                                     Prior to receipt of a notice from the
Priority Lien Collateral Trustee of its intent to exercise its remedies
hereunder at any time while an Event of Default (other than Bankruptcy Event of
Default) shall have occurred and be continuing and so long as no Bankruptcy
Event of Default shall have occurred and be continuing, except as otherwise
provided under the covenants and agreements relating to the Pledged Equity
Interests in this Agreement or elsewhere herein or in the Credit Agreement, the
Grantor shall be entitled to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Pledged Equity Interests or
any part thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement; and

 

(ii)                                  Upon delivery to the Grantors by the
Priority Lien Collateral Trustee of written notice of its intent to exercise
remedies after the occurrence and during the continuation of an Event of Default
(other than Bankruptcy Event of Default) or automatically upon the occurrence
and during the continuation of any Bankruptcy Event of Default:

 

(1)                                 all rights of the Grantor to exercise or
refrain from exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant hereto shall cease and all such
rights shall thereupon become vested in the Priority Lien Collateral Trustee who
shall thereupon have the sole right to exercise such voting and other consensual
rights; and

 

(2)                                 in order to permit the Priority Lien
Collateral Trustee to exercise the voting and other consensual rights which it
may be entitled to exercise pursuant hereto and to receive all dividends and
other distributions which it may be entitled to receive hereunder: (1) the
Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to the Priority Lien Collateral Trustee all proxies, dividend payment
orders and other instruments as the Priority Lien Collateral Trustee may from
time to time reasonably request and (2) the Grantor acknowledges that the
Priority Lien Collateral Trustee may utilize the power of attorney set forth in
Section 8.1; and

 

(c)                                  If the Borrower elects or otherwise takes
any action to cause any Pledged Equity Interests owned by the Grantor which are
not securities (for purposes of the UCC) to be treated as securities for
purposes of the UCC, the Grantor shall promptly notify the Priority Lien
Collateral Trustee in writing of any such election or action and, in such event,
shall, to the extent required hereunder, take all steps necessary or advisable
to establish the Priority Lien Collateral Trustee’s Control thereof; and

 

(d)                                 Without the prior written consent of the
Priority Lien Collateral Trustee, the Grantor will not consent or otherwise
agree to certificate any Pledged Equity Interests such that they constitute
“certificated securities” within the meaning of Section 8-102(4) of the UCC.

 

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6.5                               Information Regarding Collateral.   Borrower
will furnish to the  Facilities Administrative Agent and the Priority Lien
Collateral Trustee reasonable prior written notice of any change (i) in the
Grantor’s corporate name, (ii) in the Grantor’s form of formation or
incorporation, (iii) in the Grantor’s jurisdiction of organization or (iv) in
the Grantor’s Federal Taxpayer Identification Number or state organizational
identification number.  The Borrower also agrees promptly to notify the Priority
Lien Collateral Trustee and each Priority Lien Representative if any material
portion of the Collateral is damaged or destroyed.

 

SECTION 7.                         FURTHER ASSURANCES.

 

7.1                               Further Assurances.

 

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

 

(i)                                     file such financing or continuation
statements, or amendments thereto and execute and deliver such other agreements,
instruments, endorsements, powers of attorney or notices, as may be necessary,
or as the Priority Lien Collateral Trustee may reasonably request, in order to
perfect and preserve the security interests granted or purported to be granted
hereby;

 

(ii)                                  at the Priority Lien Collateral Trustee’s
reasonable request, appear in and defend any action or proceeding that may
affect the Grantor’s title to or the Priority Lien Collateral Trustee’s security
interest in all or any material part of the Collateral; and

 

(iii)                               furnish the Priority Lien Collateral Trustee
with such information regarding the Collateral, including, without limitation,
the location thereof, as the Priority Lien Collateral Trustee may reasonably
request from time to time.

 

(b)                                 The Grantor hereby authorizes the Priority
Lien Collateral Trustee (without implying that the Collateral Trustee shall have
any obligations to file) to file a Record or Records, including, without
limitation, financing or continuation statements and amendments and supplements
to any of the foregoing, in the United States and with any filing offices in the
United States as the Priority Lien Collateral Trustee may determine, as directed
by the Controlling Priority Lien Representative, are necessary or advisable to
perfect or otherwise protect the security interest granted to the Priority Lien
Collateral Trustee herein.  Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner as
the Priority Lien Collateral Trustee may determine, as directed by the
Controlling Priority Lien Representative, to ensure the perfection of the
security interest in the Collateral granted to the Priority Lien Collateral
Trustee herein.  The Grantor shall furnish to the Priority Lien Collateral
Trustee from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Priority Lien Collateral Trustee may reasonably request, all
in reasonable detail.

 

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SECTION 8.                         PRIORITY LIEN COLLATERAL TRUSTEE APPOINTED
ATTORNEY-IN-FACT.

 

8.1                               Power of Attorney.  The Grantor hereby
appoints the Priority Lien Collateral Trustee (such appointment being coupled
with an interest) as the Grantor’s attorney-in-fact (such appointment to cease
upon Discharge of Priority Lien Obligations), with full authority in the place
and stead of the Grantor and in the name of the Grantor, the Priority Lien
Collateral Trustee to take any action and to execute any instrument that the
Priority Lien Collateral Trustee may deem reasonably necessary or advisable as
directed by Controlling Priority Lien Representative to accomplish the purposes
of this Agreement or any other Priority Lien Document, including, without
limitation, the following:

 

(a)                                 upon the occurrence and during the
continuance of any Event of Default, to ask for, demand, collect, sue for,
recover, compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;

 

(b)                                 upon the occurrence and during the
continuance of any Event of Default, to receive, endorse and collect any drafts
or other instruments, documents and chattel paper in connection with clause
(b) above;

 

(c)                                  upon the occurrence and during the
continuance of any Event of Default, to file any claims or take any action or
institute any proceedings that the Priority Lien Collateral Trustee may deem
necessary or advisable for the collection of any of the Collateral or otherwise
to enforce the rights of the Priority Lien Collateral Trustee with respect to
any of the Collateral;

 

(d)                                 to prepare and file any UCC financing
statements against the Grantor as debtor;

 

(e)                                  to take or cause to be taken all actions
necessary to perform or comply or cause performance or compliance with the terms
of this Agreement, including, without limitation, access to pay or discharge
taxes or Liens (other than Permitted Liens) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same, any such payments made by the Priority Lien
Collateral Trustee to become obligations of such Grantor to the Priority Lien
Collateral Trustee, due and payable immediately without demand; and

 

(f)                                   upon the occurrence and during the
continuation of an Event of Default, generally to sell, transfer, lease,
license, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the Priority Lien Collateral
Trustee were the absolute owner thereof for all purposes, and to do, at the
Priority Lien Collateral Trustee’s option as directed by the Controlling
Priority Lien Representative and such Grantor’s expense, at any time or from
time to time, all acts and things that the Priority Lien Collateral Trustee
deems reasonably necessary as directed by the Controlling Priority Lien
Representative to protect, preserve or realize upon the Collateral and the
Priority Lien Collateral Trustee’s security interest therein in order to effect
the intent of this Agreement, all as fully and effectively as such Grantor might
do.

 

8.2                               No Duty on the Part of Priority Lien
Collateral Trustee or Secured Parties The powers conferred on the Priority Lien
Collateral Trustee hereunder

 

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are solely to protect the interests of the Secured Parties in the Collateral and
shall not impose any duty upon the Priority Lien Collateral Trustee or any other
Secured Party to exercise any such powers.  The Priority Lien Collateral Trustee
and the other Secured Parties shall be accountable only for amounts that they
actually receive as a result of the exercise of such powers, and neither they
nor any of their officers, directors, employees or agents shall be responsible
to the Grantor for any act or failure to act hereunder, except for their own
gross negligence or willful misconduct as determined by a final, non-appealable
judgment of a court of competent jurisdiction.

 

8.3                               Appointment Pursuant to Credit Agreement.  The
Priority Lien Collateral Trustee has been appointed as Collateral Trustee
pursuant to the Credit Agreement and the Collateral Trust Agreement.  The
rights, duties, privileges, immunities and indemnities of the Priority Lien
Collateral Trustee hereunder are subject to the provisions of the Credit
Agreement and the Collateral Trust Agreement and the other Priority Lien
Document.

 

SECTION 9.                         REMEDIES.

 

9.1                               Generally.

 

(a)                                 If any Event of Default shall have occurred
and be continuing, the Priority Lien Collateral Trustee may exercise in respect
of the Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to it at law or in equity, all the rights and
remedies of the Priority Lien Collateral Trustee on default under the UCC
(whether or not the UCC applies to the affected Collateral) to collect, enforce
or satisfy any Priority Lien Obligations then owing, whether by acceleration or
otherwise, and also may pursue any of the following separately, successively or
simultaneously:

 

(i)                                     without notice except as specified below
or under the UCC, sell, assign, lease, license (on an exclusive or nonexclusive
basis) or otherwise dispose of the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Priority Lien Collateral
Trustee’s offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as the
Priority Lien Collateral Trustee may deem commercially reasonable; and

 

(ii)                                  visit and inspect any of the properties of
the Grantor or subsidiary of the Grantor, to inspect, copy and take extracts
from the Grantor’s financial and accounting records relating to the Collateral,
at such times and during normal business hours as the Priority Lien Collateral
Trustee may reasonably request.

 

(b)                                 The Priority Lien Collateral Trustee or any
other Secured Party may be the purchaser of any or all of the Collateral at any
public or private (to the extent the portion of the Collateral being privately
sold is of a kind that is customarily sold on a recognized market or the subject
of widely distributed standard price quotations) sale in accordance with the UCC
and the Priority Lien Collateral Trustee, as collateral trustee for and
representative of the Secured Parties, shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such sale made in accordance with the UCC,
to use and apply any of the Priority Lien Obligations as a credit on account of
the purchase price for any Collateral payable by the Priority Lien Collateral
Trustee at such sale.  Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of the Grantor, and the
Grantor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any

 

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time in the future have under any rule of law or statute now existing or
hereafter enacted.  The Grantor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days’ notice to the Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification.  The Priority Lien Collateral
Trustee shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given.  The Priority Lien Collateral Trustee may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.  The Grantor agrees that it
would not be commercially unreasonable for the Priority Lien Collateral Trustee
to dispose of the Collateral or any portion thereof by using Internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capability of doing so, or that match buyers and
sellers of assets.  The Grantor hereby waives any claims against the Priority
Lien Collateral Trustee arising by reason of the fact that the price at which
any Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Priority Lien
Collateral Trustee accepts the first offer received and does not offer such
Collateral to more than one offeree.  If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Priority Lien
Obligations, the Grantor shall be liable for the deficiency and the reasonable
fees of any attorneys employed by the Priority Lien Collateral Trustee to
collect such deficiency.  The Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Priority Lien Collateral Trustee, that the Priority Lien Collateral Trustee has
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against the Grantor, and the Grantor hereby waives to the extent
permitted by applicable law and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
default has occurred giving rise to the Priority Lien Obligations becoming due
and payable prior to their stated maturities.  Nothing in this Section shall in
any way alter the rights of the Priority Lien Collateral Trustee hereunder.

 

(c)                                  The Priority Lien Collateral Trustee may
sell the Collateral without giving any warranties as to the Collateral.  The
Priority Lien Collateral Trustee may specifically disclaim or modify any
warranties of title or the like.  This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

 

(d)                                 The Priority Lien Collateral Trustee shall
have no obligation to marshal any of the Collateral.

 

(e)                                  Any exercise of remedies provided in this
Section 9 shall be subject to the Collateral Trust Agreement and any applicable
intercreditor agreement.

 

9.2                               Application of Proceeds.  All proceeds
received by the Priority Lien Collateral Trustee in respect of any sale of, any
collection from, or other realization upon all or any part of the Collateral
shall be applied by the Priority Lien Collateral Trustee as provided in the
Collateral Trust Agreement.

 

9.3                               Sales on Credit.  If the Priority Lien
Collateral Trustee sells any of the Collateral upon credit, the Grantor will be
credited only with payments actually made by purchaser and received by the
Priority Lien Collateral Trustee and applied to indebtedness of the purchaser. 
In the event the purchaser fails to pay for the Collateral, the Priority Lien
Collateral Trustee may resell the Collateral and the Grantor shall be credited
with proceeds of the sale.

 

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9.4                               Pledged Equity Interests.  The Grantor
recognizes that, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws, the Priority Lien Collateral Trustee
may be compelled, with respect to any sale of all or any part of the Pledged
Equity Interests conducted without prior registration or qualification of such
Pledged Equity Interests under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Pledged Equity Interests for their own account, for investment and
not with a view to the distribution or resale thereof.  The Grantor acknowledges
that any such private sale may be at prices and on terms less favorable than
those obtainable through a public sale without such restrictions (including a
public offering made pursuant to a registration statement under the Securities
Act) and, notwithstanding such circumstances, the Grantor agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Priority Lien Collateral Trustee shall have no obligation to
engage in public sales and no obligation to delay the sale of any Pledged Equity
Interests for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would, or should, agree to so register it.  If the Priority Lien Collateral
Trustee determines to exercise its right to sell any or all of the Pledged
Equity Interests, upon written request, the Grantor shall and shall cause each
issuer of any Pledged Stock to be sold hereunder, each partnership and each
limited liability company from time to time to furnish to the Priority Lien
Collateral Trustee all such information as the Priority Lien Collateral Trustee
may request in order to determine the number and nature of interest, shares or
other instruments included in the Pledged Equity Interests which may be sold by
the Priority Lien Collateral Trustee in exempt transactions under the Securities
Act and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

 

9.5                               Cash Proceeds.  If any Event of Default shall
have occurred and be continuing all proceeds of any Collateral received by the
Grantor consisting of cash, checks and other near-cash items (collectively,
“Cash Proceeds”) shall, subject to the terms of and the priorities set forth in
the Collateral Trust Agreement and any applicable intercreditor agreement, be
held by the Grantor in trust for the Priority Lien Collateral Trustee,
segregated from other funds of the Grantor, and shall, forthwith upon receipt by
the Grantor, be turned over to the Priority Lien Collateral Trustee in the exact
form received by the Grantor (duly indorsed by such Grantor to the Priority Lien
Collateral Trustee, if required).  Any Cash Proceeds received by the Priority
Lien Collateral Trustee (whether from a Grantor or otherwise) may, subject to
the terms of and the priorities set forth in the Collateral Trust Agreement and
any applicable intercreditor agreement, (i) be held by the Priority Lien
Collateral Trustee for the ratable benefit of the Secured Parties, as collateral
security for the Priority Lien Obligations (whether matured or unmatured) and/or
(ii) then or at any time thereafter may be applied by the Priority Lien
Collateral Trustee against the Priority Lien Obligations then due and owing in
accordance with Section 9.2 hereof.

 

SECTION 10.                  PRIORITY LIEN COLLATERAL TRUSTEE.

 

By acceptance of the benefits hereof, each Secured Party (whether or not a
signatory hereto) shall be deemed to consent to the appointment of the Priority
Lien Collateral Trustee to act as Priority Lien Collateral Trustee hereunder.
The Priority Lien Collateral Trustee shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of any Collateral), solely in
accordance with this Agreement, the Collateral Trust Agreement and any
applicable intercreditor agreement; provided,

 

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the Priority Lien Collateral Trustee shall exercise, or refrain from exercising,
any remedies provided for herein in accordance with the terms of the Collateral
Trust Agreement.  In furtherance of the foregoing provisions of this Section,
each Secured Party, by its acceptance of the benefits hereof, agrees that it
shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Secured Party that all rights
and remedies hereunder may be exercised solely by the Priority Lien Collateral
Trustee for the benefit of Secured Parties in accordance with the terms of this
Section.  The rights, privileges, protections and immunities in the Collateral
Trust Agreement for the benefit of the Collateral Trustee and the other
provisions of the Collateral Trust Agreement relating to the Collateral Trustee
are hereby incorporated herein with respect to the Priority Lien Collateral
Trustee.

 

SECTION 11.                  CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.

 

This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the Discharge of Priority Lien
Obligations and shall be binding upon the Grantor, its successors and permitted
assigns, and inure, together with the rights and remedies of the Priority Lien
Collateral Trustee hereunder, to the benefit of the Priority Lien Collateral
Trustee and its successors, transferees and permitted assigns.  Without limiting
the generality of the foregoing, but subject to the terms of the Credit
Agreement or any other applicable Priority Lien Document, any Lender or other
Priority Lien Secured Party may assign or otherwise transfer any Loans or
commitments held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Secured Parties herein or otherwise.  Upon the Discharge of Priority Lien
Obligations, the security interest granted hereby shall automatically terminate
hereunder and of record and all rights to the Collateral shall revert to the
Grantor or to whomsoever may be lawfully entitled to receive the same (in
accordance with the Collateral Trust Agreement, any applicable Intercreditor
agreement or otherwise).  Upon any such termination the Priority Lien Collateral
Trustee shall, at the Grantor’s expense, execute and deliver to the Grantor or
otherwise authorize the filing of such documents as the Grantor shall reasonably
request, including financing statement amendments or terminations, account
control termination letters, and any other such documents to evidence such
termination.   All other releases of Collateral shall be made in accordance with
the terms of the Collateral Trust Agreement and any applicable intercreditor
agreement.

 

SECTION 12.                  STANDARD OF CARE; PRIORITY LIEN COLLATERAL TRUSTEE
MAY PERFORM.

 

The powers conferred on the Priority Lien Collateral Trustee hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers.  Except for the exercise of reasonable care
in the custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Priority Lien Collateral Trustee shall
have no duty as to the Grantor or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.  The Priority Lien Collateral Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Priority Lien Collateral Trustee accords its own property.  Neither
the Priority Lien Collateral Trustee nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Grantor or otherwise.  If the Grantor fails to perform any
agreement contained herein, the Priority Lien Collateral Trustee may, but shall
not be required to, itself perform, or cause performance of, such agreement, and
the expenses of the Priority Lien

 

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Collateral Trustee incurred in connection therewith shall be payable by the
Grantor under the Collateral Trust Agreement.

 

SECTION 13.                  MISCELLANEOUS.

 

Any notice, request or demand required or permitted to be given under this
Agreement shall be given in accordance with the Collateral Trust Agreement.  No
failure or delay on the part of the Priority Lien Collateral Trustee in the
exercise of any power, right or privilege hereunder or under the Collateral
Trust Agreement shall impair such power, right or privilege or be construed to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege.  All rights and
remedies existing under this Agreement and the Collateral Trust Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.  In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.  This Agreement shall be binding upon and inure to the
benefit of the Priority Lien Collateral Trustee and the Grantor and their
respective successors and permitted assigns.  The Grantor shall not, without the
prior written consent of the Priority Lien Collateral Trustee given in
accordance with the Collateral Trust Agreement and any applicable intercreditor
agreement, assign any right, duty or obligation hereunder.  This Agreement and
the Collateral Trust Agreement embody the entire agreement and understanding
between the Grantor and the Priority Lien Collateral Trustee and supersede all
prior agreements and understandings between such parties relating to the subject
matter hereof and thereof.  Accordingly, the Collateral Trust Agreement may not
be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties.  There are no unwritten oral agreements between the
parties.  This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.  Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic transmission (including .pdf or .tif
format) shall be effective as delivery of a manually executed counterpart of
this Agreement.  This Agreement may be amended or supplemented in accordance
with the terms of the Collateral Trust Agreement.

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW
ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN
ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND
THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

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THE PROVISIONS OF THE COLLATERAL TRUST AGREEMENT UNDER THE HEADINGS “CONSENT TO
JURISDICTION” AND “WAIVER OF JURY TRIAL” ARE INCORPORATED HEREIN BY THIS
REFERENCE AND SUCH INCORPORATION SHALL SURVIVE ANY TERMINATION OF THE COLLATERAL
TRUST AGREEMENT.

 

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IN WITNESS WHEREOF, the Grantor and the Priority Lien Collateral Trustee have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.

 

 

FORESIGHT ENERGY LP

 

 

 

By Foresight Energy GP LLC, its general partner

 

 

 

 

By:

/s/ Robert D. Moore

 

Name: Robert D. Moore

 

Title: President and Chief Executive Officer

 

 

 

 

 

FORESIGHT ENERGY LLC

 

 

 

By:

/s/ Robert D. Moore

 

Name: Robert D. Moore

 

Title: President and Chief Executive Officer

 

[Signature Page to Priority Lien Debt Pledge Agreement]

 

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LORD SECURITIES CORPORATION,

 

as Priority Lien Collateral Trustee

 

 

 

 

 

By:

/s/ Albert J. Fioravanti

 

 

Name: Albert J. Fioravanti

 

 

Title: Director

 

[Signature Page to Priority Lien Debt Pledge Agreement]

 

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EXHIBIT A
TO PRIORITY LIEN DEBT PLEDGE AGREEMENT

 

UNCERTIFICATED SECURITIES CONTROL AGREEMENT

 

This Uncertificated Securities Control Agreement (this “Agreement”) dated as of
[         ], 20[  ] among [                ] (the “Pledgor”), Lord Securities
Corporation, as Priority Lien Collateral Trustee for the Secured Parties, (the
“Priority Lien Collateral Trustee”) and [            ], a [        ]
[corporation] (the “Issuer”).  Capitalized terms used but not defined herein
shall have the meaning assigned in the Priority Lien Debt Pledge Agreement dated
as of March 28, 2017, among the Pledgor and the Priority Lien Collateral Trustee
(as it may be amended, restated, supplemented or otherwise modified from time to
time, the “Security Agreement”).  All references herein to the “UCC” shall mean
the Uniform Commercial Code as in effect in the State of New York.

 

Section 1.  Registered Ownership of Shares.  The Issuer hereby confirms and
agrees that as of the date hereof the Pledgor is the registered owner of
[          ] shares of the Issuer’s [common] stock (the “Pledged Shares”).

 

Section 2.  Instructions.  If at any time the Issuer shall receive instructions
originated by the Priority Lien Collateral Trustee relating to the Pledged
Shares, the Issuer shall comply with such instructions without further consent
by the Pledgor or any other person.

 

Section 3.  Additional Representations and Warranties of the Issuer.  The Issuer
hereby represents and warrants to the Priority Lien Collateral Trustee:

 

(a)  It has not entered into, and until the termination of this agreement will
not enter into, any agreement with any other person relating the Pledged Shares
pursuant to which it has agreed to comply with instructions issued by such other
person; and

 

(b)  It has not entered into, and until the termination of this agreement will
not enter into, any agreement with the Pledgor or the Priority Lien Collateral
Trustee purporting to limit or condition the obligation of the Issuer to comply
with Instructions as set forth in Section 2 hereof.

 

(c)   This Uncertificated Securities Control Agreement is the valid and legally
binding obligation of the Issuer.

 

Section 4.  Choice of Law.  THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY
CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER
HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN
THE LAW OF THE STATE OF NEW YORK.

 

Section 5.  Amendments.  No amendment or modification of this Agreement or
waiver of any right hereunder shall be binding on any party hereto unless it is
in writing and is signed by all of the parties hereto.

 

EXHIBIT A-1

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Section 6.  Voting Rights.  Until such time as the Priority Lien Collateral
Trustee shall otherwise instruct the Issuer in writing, the Pledgor shall have
the right to vote the Pledged Shares.

 

Section 7.  Successors; Assignment.  The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law.  The Priority Lien Collateral Trustee
may assign its rights hereunder only with the express written consent of the
Issuer and by sending written notice of such assignment to the Pledgor.

 

Section 8.  Indemnification of Issuer.  The Pledgor and the Priority Lien
Collateral Trustee hereby agree that (a) the Issuer is released from any and all
liabilities to the Pledgor and the Priority Lien Collateral Trustee arising from
the terms of this Agreement and the compliance of the Issuer with the terms
hereof, except to the extent that such liabilities arise from the Issuer’s
negligence and (b) the Pledgor, its successors and assigns shall at all times
indemnify and save harmless the Issuer from and against any and all claims,
actions and suits of others arising out of the terms of this Agreement or the
compliance of the Issuer with the terms hereof, except to the extent that such
arises from the Issuer’s negligence, and from and against any and all
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising by reason of the same, until the termination
of this Agreement.

 

Section 9.  Notices.  Any notice, request or other communication required or
permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

 

Pledgor:                                                                                                   
[Name and Address of Pledgor]
Attention: [                ]
Telecopier: [                ]

 

Priority Lien Collateral Trustee:    [Name and Address of Priority Lien
Collateral Trustee]
Attention: [                ]
Telecopier: [                ]

 

Issuer:                                                                                                           
[Insert Name and Address of Issuer]
Attention: [                ]
Telecopier: [                ]

 

Any party may change its address for notices in the manner set forth above.

 

Section 10.  Termination.  The obligations of the Issuer to the Priority Lien
Collateral Trustee pursuant to this Control Agreement shall continue in effect
until the security interests of the Priority Lien Collateral Trustee in the
Pledged Shares have been terminated pursuant to the terms of the Security
Agreement, the Collateral Trust Agreement or  Priority Lien Documents and the
Priority Lien Collateral Trustee has notified the Issuer of such termination in
writing or the other release of the security interests pursuant to the terms of
the Security Agreement and the Collateral Trust Agreement and the Priority Lien
Documents.  The Priority Lien Collateral Trustee agrees to provide Notice of
Termination in substantially the form of Exhibit A hereto to the Issuer upon the
request of the Pledgor on or after the termination of the Priority Lien

 

EXHIBIT A-2

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Collateral Trustee’s security interest in the Pledged Shares pursuant to the
terms of the Security Agreement and the Collateral Trust Agreement.  The
termination of this Control Agreement shall not by itself terminate the Pledged
Shares or alter the obligations of the Issuer to the Pledgor pursuant to any
other agreement with respect to the Pledged Shares.

 

Section 11.  Collateral Trust Agreement.  Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Priority Lien Collateral
Trustee pursuant to this Control Agreement and the exercise of any right or
remedy by the Priority Lien Collateral Trustee hereunder are subject to the
provisions of the Collateral Trust Agreement.  In the event of any conflict
between the terms of the Collateral Trust Agreement and this Control Agreement,
the terms of such Collateral Trust Agreement shall govern and control.

 

Section 12.  Counterparts.  This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

 

 

FORESIGHT ENERGY LP,

 

as Pledgor

 

 

 

 

 

By Foresight Energy GP LLC, its general partner

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

LORD SECURITIES CORPORATION,

 

as Priority Lien Collateral Trustee

 

 

 

 

 

 

 

By:

 

 

 

Authorized Signatory

 

 

 

 

 

[                   ]

 

as Issuer

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

EXHIBIT A-3

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Exhibit A

[Letterhead of Priority Lien Collateral Trustee]

 

[Date]

 

[Name and Address of Issuer]
Attention: [                                           ]

 

Re:  Termination of Control Agreement

 

You are hereby notified that the Uncertificated Securities Control Agreement
between you, [Name of Pledgor] (the “Pledgor”) and the undersigned (a copy of
which is attached) is terminated and you have no further obligations to the
undersigned pursuant to such Agreement.  Notwithstanding any previous
instructions to you, you are hereby instructed to accept all future directions
with respect to Pledged Shares (as defined in the Uncertificated Control
Agreement) from the Pledgor.  This notice terminates any obligations you may
have to the undersigned with respect to the Pledged Shares, however nothing
contained in this notice shall alter any obligations which you may otherwise owe
to the Pledgor pursuant to any other agreement.

 

You are instructed to deliver a copy of this notice by facsimile transmission to
the Pledgor.

 

 

Very truly yours,

 

 

 

 

 

LORD SECURITIES CORPORATION,

 

as Priority Lien Collateral Trustee

 

 

 

By:

 

 

 

Authorized Signatory

 

EXHIBIT A-4

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