EXECUTION VERSION

 

THIS PLEDGE AND SECURITY AGREEMENT, dated as of September 30, 2016 (as the same
may be amended, restated or otherwise modified from time to time, this
“Agreement”), is made by ROYAL ENERGY RESOURCES, INC., a Delaware corporation
(the “Borrower”), having an address at 56 Broad Street, Suite 2, Charleston, SC
29401, in favor of WESTON ENERGY LLC, a Delaware limited liability company
(together with it successors and assigns, the “Secured Party”).

 

RECITALS:

 

(1) This Agreement is made pursuant to the Secured Promissory Note, dated as of
the date hereof (as amended, restated or otherwise modified from time to time,
the “Note”), in the principal amount of $2,000,000.00, made by the Borrower to
the order of the Secured Party.

 

(2) It is a condition precedent to the making of loan contemplated by the Note
that the Borrower shall have executed and delivered to the Secured Party this
Agreement.

 

NOW, THEREFORE, in consideration of the benefits accruing to the Borrower, the
receipt and sufficiency of which are hereby acknowledged, the Borrower hereby
makes the following representations and warranties to the Secured Party and
hereby covenants and agrees with the Secured Party as follows:

 

ARTICLE I.

 

DEFINITIONS AND TERMS

 

Section 1.01 Defined Terms. Capitalized terms used in this Agreement and not
otherwise defined in this Agreement shall have the meanings given to such terms
in the Note. Unless otherwise defined herein, all terms used herein and defined
in the UCC shall have the same definitions herein as specified therein;
provided, however, that if a term is defined in Article 9 of the UCC differently
than in another Article of the UCC, the term shall have the meaning specified in
Article 9 of the UCC.

 

Section 1.02 Additional Defined Terms. The following terms shall have the
meanings herein specified unless the context otherwise requires:

 

“Agreement” has the meaning provided in the first paragraph of this Agreement.

 

“Borrower” has the meaning provided in the first paragraph of this Agreement.

 

“Closing Date” means the date of this Agreement.

 

“Collateral” has the meaning provided in Section 2.01 hereof.

 

“Control” means when used with respect to any security or security entitlement,
the meaning specified in Section 8-106 of the UCC.

 

“Controlled Securities Account” means a securities account that (i) is
maintained in the name of the Borrower at an office of a Securities Intermediary
located in the United States of America and (ii) together with all financial
assets credited thereto and all related security entitlements, is subject to a
Securities Account Control Agreement.

 

  

  

 

“Copyrights” means any copyright to which the Borrower now or hereafter has
title, as well as any application for a copyright hereafter made by the
Borrower.

 

“Deliver,” “Delivered” and “Delivery” means the delivery of an uncertificated
security as provided in Section 8-301(b) of the UCC.

 

“Equity Interests” means (i) all of the membership interests in Rhino GP at any
time owned or held by the Borrower, and (ii) all of the equity interests in
Rhino at any time owned or held by the Borrower.

 

“Governing Documents” means all agreements and instruments evidencing or
relating to investments in or ownership, voting or disposition of, any of the
Collateral.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

 

“Issuer” means the issuer of any Collateral.

 

“Intellectual Property” means: (i) all Trademarks, together with the
registrations and right to all renewals thereof, and the good will of the
business of the Borrower symbolized by the Trademarks; (ii) all Patents; (iii)
all Copyrights; (iv) all computer programs and software applications and source
codes of the Borrower and all intellectual property rights therein and all other
Proprietary Information of the Borrower, including, but not limited to, Trade
Secrets; and (v) all Permits.

 

“Note” has the meaning provided in the Recitals of this Agreement.

 

“Notice of Exclusive Control” means a “Notice of Exclusive Control” as defined
in any Securities Account Control Agreement.

 

“Patents” means any patent to which the Borrower now or hereafter has title, as
well as any application for a patent now or hereafter made by the Borrower.

 

“Permits” means all licenses, permits, rights, orders, variances, franchises or
authorizations of or from any Governmental Authority.

 

“Pledged Equity Interests” means all of the Equity Interests now owned or
hereafter acquired by the Borrower, and all of the Borrower’s other rights,
title and interests in, or in any way related to, each Issuer to which any of
such Equity Interests relate, including, without limitation: (i) all additional
Equity Interests hereafter from time to time acquired by the Borrower in any
manner, together with all dividends, cash, instruments and other property
hereafter from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Equity Interests and in all
profits, losses and other distributions to which the Borrower shall at any time
be entitled in respect of any such Equity Interest; (ii) all other payments due
or to become due to the Borrower in respect of any such Equity Interest, whether
under any partnership agreement, limited liability company agreement, other
agreement or otherwise, whether as contractual obligations, damages, insurance
proceeds or otherwise; (iii) all of the Borrower’s claims, rights, powers,
privileges, authority, puts, calls, options, security interests, liens and
remedies, if any, under any partnership agreement, limited liability company
agreement, other agreement or at law or otherwise in respect of any such Equity
Interest; (iv) all present and future claims, if any, of the Borrower against
any such Issuer for moneys loaned or advanced, for services rendered or
otherwise; (v) all of the Borrower’s rights under any partnership agreement,
limited liability company agreement, other agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of the
Borrower relating to any such Equity Interest; (vi) all other property hereafter
delivered in substitution for or in addition to any of the foregoing; (vii) all
certificates and instruments representing or evidencing any of the foregoing;
and (viii) all cash, securities, interest, distributions, dividends, rights and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all thereof.

 

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“Proceeds” means (i) all proceeds; and (ii) without limitation of the foregoing
and in all cases, including, but not be limited to, (A) whatever is acquired
upon the sale, lease, license, exchange, or other disposition of any Collateral,
(B) whatever is collected on, or distributed on account of, any Collateral, (C)
rights arising out of any Collateral, (D) claims arising out of the loss or
nonconformity of, defects in, or damage to any Collateral, (E) claims and rights
to any proceeds of any insurance, indemnity, warranty or guaranty payable to the
Borrower (or the Secured Party, as assignee, loss payee or an additional
insured) with respect to any of the Collateral, (G) claims and rights to
payments (in any form whatsoever) made or due and payable to the Borrower from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any Governmental
Authority (or any Person acting under color of Governmental Authority), (H) all
cash, money, checks and negotiable instruments received or held on behalf of the
Secured Party pursuant to any lockbox or similar arrangement relating to the
payment of Collateral, and (I) any and all other amounts from time to time paid
or payable under or in connection with any of the Collateral.

 

“Proprietary Information” means all information and know-how worldwide,
including, without limitation, technical data; manufacturing data; research and
development data; data relating to compositions, processes and formulations,
manufacturing and production know-how and experience; management know-how;
training programs; manufacturing, engineering and other drawings;
specifications; performance criteria; operating instructions; maintenance
manuals; technology; technical information; software; computer programs;
engineering and computer data and databases; design and engineering
specifications; catalogs; promotional literature; financial, business and
marketing plans; and inventions and invention disclosures.

 

“Rhino” means Rhino Resource Partners LP, a Delaware limited partnership.

 

“Rhino GP” means Rhino GP LLC, a Delaware limited liability company.

 

“Rhino Lien” means the Lien granted to Rhino on the Rhino Pledged Shares
pursuant to the Rhino Pledge Agreement.

 

“Rhino Pledge Agreement” means the Pledge Agreement, dated as of March 21, 2016,
by and between the Borrower, as the borrower, and Rhino, as the lender.

 

“Rhino Pledged Shares” means 1,333,334 Common Units of Rhino.

 

“Secured Obligations” means, collectively, the principal of and interest on the
Note and all other indebtedness, obligations and liabilities owing by the
Borrower to the Secured Party under the Note and the other Loan Documents
(including, without limitation, indemnities, fees and other amounts payable
thereunder), whether primary, secondary, direct, contingent, fixed or otherwise,
in all cases whether now existing, or hereafter incurred or arising, including
any such interest or other amounts incurred or arising during the pendency of
any bankruptcy, insolvency, reorganization, receivership or similar proceeding,
regardless of whether allowed or allowable in such proceeding or subject to an
automatic stay under Section 362(a) of the Bankruptcy Code.

 

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“Secured Party” has the meaning provided in the first paragraph of this
Agreement.

 

“Securities Account Control Agreement” means, with respect to a securities
account of the Borrower, a securities account control agreement among the
relevant Securities Intermediary, the Borrower and the Secured Party, in such
form as is satisfactory to the Secured Party in its sole disrection.

 

“Securities Act” means the Securities Act of 1933, as amended, as the same may
be in effect from time to time.

 

“Securities Intermediary” means a clearing corporation or a Person, including,
without limitation, a bank or broker, that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.

 

“Trademarks” means any trademarks and service marks now held or hereafter
acquired by the Borrower, any unregistered marks used by the Borrower and trade
dress including logos and/or designs in connection with which any of these
registered or unregistered marks are used.

 

“Trade Secrets” means any secretly held existing engineering and other data,
information, production procedures and other know-how relating to the design,
manufacture, assembly, installation, use, operation, marketing, sale and
servicing of any products or business of the Borrower worldwide whether written
or not written.

 

“UCC” means, unless the context indicates otherwise, the Uniform Commercial
Code, as at any time adopted and in effect in the State of New York,
specifically including and taking into account all amendments, supplements,
revisions and other modifications thereto.

 

Section 1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, and (d) unless otherwise
specified, all references herein to Sections, Schedules, Annexes and Exhibits
shall be construed to refer to Sections of, and Schedules, Annexes and Exhibits
to, this Agreement.

 

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ARTICLE II.

 

SECURITY INTEREST

 

Section 2.01 Grant of Security Interest. As security for the prompt and complete
payment and performance when due of all of the Secured Obligations, the Borrower
does hereby pledge, sell, assign and transfer unto the Secured Party, and does
hereby grant to the Secured Party, a continuing security interest in all of the
right, title and interest of the Borrower in, to and under all of the following
of the Borrower, whether now existing or hereafter from time to time arising or
acquired and wherever located (collectively, the “Collateral”):

 

(i) the Pledged Equity Interests;

 

(ii) all securities accounts, together with all financial assets credited
therein from time to time, and all security entitlements, financial assets,
monies, securities, cash and other property held therein or credited thereto, in
each case to the extent constituting, relating to or arising out of the Pledged
Equity Interests;

 

(iii) all investment property, in each case to the extent constituting Pledged
Equity Interests;

 

(iv) all general intangibles, in each case to the extent constituting, relating
to or arising out of the Pledged Equity Interests;

 

(v) all payment intangibles, in each case to the extent constituting, relating
to or arising out of the Pledged Equity Interests;

 

(vi) all supporting obligations, in each case to the extent constituting,
relating to or arising out of the Pledged Equity Interests;

 

(vii) all additions, modifications, alterations, improvements, upgrades,
accessions, components, parts, appurtenances, substitutions and/or replacements
of, to or for any of the foregoing; and

 

(viii) all Proceeds and products of any and all of the foregoing.

 

Section 2.02 No Assumption of Liability. The security interest hereunder is
granted as security only and shall not subject the Secured Party to, or in any
way alter or modify, any obligation or liability of the Borrower with respect to
or arising out of any of the Collateral.

 

Section 2.03 Power of Attorney. The Borrower hereby irrevocably constitutes and
appoints the Secured Party its true and lawful agent and attorney-in-fact, and
in such capacity the Secured Party shall have, without any further action
required by or on behalf of the Borrower, the right, with full power of
substitution, in the name of the Borrower or otherwise, for the use and benefit
of the Secured Party after the occurrence of and during the continuance of an
Event of Default: (i) to receive, endorse, present, assign, deliver and/or
otherwise deal with any and all notes, acceptances, letters of credit, checks,
drafts, money orders, or other evidences of payment relating to the Collateral
or any part thereof; (ii) to demand, collect, receive payment of, and give
receipt for and give credits, allowances, discounts, discharges, releases and
acquittances of and for any or all of the Collateral; (iii) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in or
before any court or other tribunal (including any arbitration proceedings) to
collect or otherwise realize on all or any of the Collateral, or to enforce any
rights of the Borrower in respect of any of its Collateral; (iv) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings
relating to any or all of the Collateral; and (v) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with any
or all of the Collateral, and to do all other acts and things necessary or
appropriate to carry out the intent and purposes of this Agreement, as fully and
completely as though the Secured Party were the absolute owner of the Collateral
for all purposes.

 

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ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Secured Party, which representations
and warranties shall survive the execution and delivery of this Agreement until
the termination of this Agreement in accordance with Section 8.08, as follows:

 

Section 3.01 Title and Authority. The Borrower has (i) good, valid and
unassailable title to all tangible items owned by it and constituting any
portion of the Collateral with respect to which it has purported to grant the
security interest, and good, valid and unassailable rights in all other
Collateral with respect to which it has purported to grant the security
interest, and (ii) full power and authority to grant to the Secured Party the
security interest in such Collateral pursuant hereto and to execute, deliver and
perform its obligations in accordance with the terms of this Agreement, without
the consent or approval of any other Person other than any consent or approval
that has been obtained.

 

Section 3.02 Absence of Other Liens.

 

(a) There is no financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to cover
any interest of any kind of the Borrower in the Collateral, except for any
filings or recordings made by the Secured Party.

 

(b) The Borrower is, and as to any Collateral acquired by it from time to time
after the date hereof the Borrower will be, the owner of all of the Collateral,
free and clear of any Lien (other than the Lien granted to the Secured Party and
the Rhino Lien), and the security interest of the Borrower therein is and will
be superior and prior to any other security interest or other Lien (other than
the Rhino Lien with respect to the Rhino Pledged Shares).

 

Section 3.03 Validity of Security Interest. The security interest of the
Borrower constitutes a legal, valid and enforceable first priority security
interest in the Collateral, securing the payment and performance of the Secured
Obligations.

 

Section 3.04 Perfection of Security Interest under UCC.

 

(a) All notifications and other actions, including, without limitation, (i) all
deposits of certificates and instruments evidencing any Collateral (duly
endorsed or accompanied by appropriate instruments of transfer), (ii) all
notices to and acknowledgments of any Person, (iii) all acknowledgments and
agreements respecting the right of the Secured Party to obtain control with
respect to any Collateral, (iv) the Delivery of the Equity Interests, and (v)
all filings, registrations and recordings, which are (x) required by the terms
of this Agreement to have been given, made, obtained, done and accomplished, and
(y) necessary to create, preserve, protect and perfect the security interest
granted by the Borrower to the Secured Party hereby in respect of the
Collateral, have been given, made, obtained, done and accomplished.

 

(b) After giving effect to all such actions, the security interest granted by
the Borrower to the Secured Party pursuant to this Agreement in and to the
Collateral will be perfected to the maximum extent a security interest in the
Collateral can be perfected under the UCC of any applicable jurisdiction.

 

 - 6 - 

  

 

Section 3.05 Places of Business; Jurisdiction of Organization; Locations of
Collateral. The Borrower represents and warrants that (i) the principal place of
business of the Borrower, or its chief executive office, if it has more than one
place of business, is located at the address set forth in the introductory
paragraph of this Agreement, and (ii) the jurisdiction of formation or
organization of the Borrower is set forth in the introductory paragraph of this
Agreement.

 

Section 3.06 Collateral. Schedule 1 hereto sets forth a true and complete list
of all of the Collateral owned by the Borrower as of the Closing Date.

 

Section 3.07 Securities Accounts. As of the Closing Date, the Borrower has no
securities account to which Collateral has been credited.

 

Section 3.08 Status of Collateral. All of the Pledged Equity Interests have been
duly and validly issued and are fully paid and non-assessable (to the extent
such concepts are applicable). No Collateral is subject to any defense, offset
or counterclaim, nor have any of the foregoing been asserted or alleged against
the Borrower by any Person.

 

ARTICLE IV.

 

GENERAL COVENANTS

 

Section 4.01 No Other Liens; Defense of Title; Securities Accounts. The Borrower
will not make or grant, or suffer or permit to exist, any Lien on any of the
Collateral, other than the Lien in favor of the Secured Party and the Rhino
Lien. The Borrower, at its sole cost and expense, will take any and all actions
reasonably necessary and appropriate to defend title to the Collateral against
any and all Persons and to defend the validity, enforceability, perfection,
effectiveness and priority of the security interest of the Secured Party therein
against any other Lien. The Borrower will not have any securities accounts to
which Collateral has been credited other than a Controlled Securities Account.

 

Section 4.02 Further Assurances; Filings and Recordings.

 

(a) The Borrower, at its sole cost and expense, will duly execute, acknowledge
and deliver all such agreements, instruments and other documents and take all
such actions (including, without limitation, (i) physically pledging, if
possible, the Collateral with the Secured Party, (ii) obtaining Securities
Account Control Agreements in accordance with this Agreement, (iii) obtaining
from other Persons agreements evidencing the exclusive control and dominion of
the Secured Party over any of the Collateral, in instances where obtaining
control over such Collateral is the only or best method of perfection, (iv)
causing all Equity Interests to be Delivered to or for the benefit of the
Secured Party to the extent a Securities Account Control Agreement is not in
effect with respect to such Equity Interests, and (v) making filings, recordings
and registrations, as the Secured Party may from time to time instruct to better
assure, preserve, protect and perfect the security interest of the Secured Party
in the Collateral, and the rights and remedies of the Secured Party hereunder,
or otherwise to further effectuate the intent and purposes of this Agreement and
to carry out the terms hereof.

 

(b) The Borrower, at its sole cost and expense, will pay all taxes, fees and
charges and comply with all statutes and regulations applicable to such filing,
recording, registration and publishing and such re-filing, re-recording,
re-registration and re-publishing.

 

Section 4.03 Authorization to File Financing Statements. The Borrower
irrevocably authorizes the Secured Party at any time and from time to time to
file in any jurisdiction any initial financing statements and all amendments
thereto that (a) indicate the Collateral with any description satisfactory to
the Secured Party (in its sole discretion) and (b) contain any other information
required or permitted pursuant to the UCC for the sufficiency or filing office
acceptance of any financing statement or amendment.

 

 - 7 - 

  

 

Section 4.04 Maintenance of Records. The Borrower will keep and maintain at its
own cost and expense satisfactory and complete records of the Collateral.

 

Section 4.05 Legal Status. The Borrower agrees that (a) it will not change its
name, place of business or if more than one, chief executive office, or its
mailing address or organizational identification number if it has one, in each
case without providing the Secured Party at least thirty days’ prior written
notice thereof, (b) if the Borrower does not have an organizational
identification number and later obtains one, it will promptly notify the Secured
Party of such organizational identification number, and (c) it will not change
its type of organization, jurisdiction of organization or other legal structure
in each case unless it shall have provided the Secured Party at least thirty
days’ prior written notice thereof.

 

Section 4.06 Inspections and Verification. The Secured Party and such Persons as
the Secured Party may designate shall have the right, at the Borrower’s own cost
and expense, at any time or from time to time, to inspect the Collateral and all
books and records related thereto (and to make extracts and copies thereof) and
to verify under reasonable procedures the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Collateral.

 

Section 4.07 Protective Advances by the Secured Party. At its option, but
without being obligated to do so, the Secured Party may, upon prior notice to
the Borrower, after the occurrence and during the continuance of an Event of
Default, (i) pay and discharge past due taxes, assessments and governmental
charges, at any time levied on or with respect to any of the Collateral with
respect to which the Borrower has failed to pay and discharge, and/or (ii) pay
and discharge any claims of other creditors of the Borrower which are secured by
any Lien on any Collateral, other than the Lien in favor of the Secured Party,
provided, however, that nothing in this Section shall be construed as excusing
the Borrower from the performance of, or imposing any obligation on the Secured
Party to cure or perform, any covenants or other agreements of the Borrower with
respect to any of the foregoing matters as set forth herein or in any of the
other Loan Documents.

 

ARTICLE V.

 

SECURITIES ACCOUNTS

 

Section 5.01 Securities Accounts. The Borrower shall cause all securities
accounts in which any Collateral is deposited to be subject at all times to a
fully effective Securities Account Control Agreement, duly executed by the
Borrower, the Secured Party and the applicable Securities Intermediary.

 

ARTICLE VI.

 

COLLATERAL

 

Section 6.01 Delivery of Certificates and Instruments for Collateral.

 

(a) On or prior to the Closing Date, the Borrower shall pledge and deposit with
the Secured Party all certificates or instruments, if any, representing any of
the Collateral at the time owned by the Borrower and subject to the security
interest hereof, accompanied by undated transfer powers duly executed in blank
by the Borrower or such other instruments of transfer as are acceptable to the
Secured Party.

 

 - 8 - 

  

 

(b) If the Borrower shall acquire (by purchase, conversion, exchange, stock
dividend or otherwise) any additional Collateral, at any time or from time to
time after the date hereof which is or are intended to be subjected to the
security interest hereof and which is or are represented by certificates or
instruments, the Borrower shall forthwith pledge and deposit with the Secured
Party all such certificates, accompanied by undated transfer powers duly
executed in blank by the Borrower or such other instruments of transfer as are
acceptable to the Secured Party.

 

(c) Without limitation of any other provision of this Agreement, if any of the
Collateral (whether or not now owned or hereafter acquired) which is intended to
be subjected to the security interest hereof is (i) an uncertificated security
but hereafter becomes a certificated security, the Borrower shall deliver such
certificated securities to the Secured Party, accompanied by undated transfer
powers duly executed in blank, (ii) an uncertificated security, the Borrower
shall cause such uncertificated security to be subject to a Securities Account
Control Agreement or Delivered to or for the benefit of the Secured Party, or
(iii) held in a securities account that is not already subject to a Securities
Account Control Agreement, the Borrower shall promptly take all actions required
to make such securities account subject to a Securities Account Control
Agreement or Delivered to or for the benefit of the Secured Party. The Borrower
further agrees to take such actions as the Secured Party deems reasonably
necessary or desirable to effect the foregoing and to permit the Secured Party
to exercise any of its rights and remedies hereunder in respect thereof,
promptly upon the request of the Secured Party. If the Collateral is Delivered
to the Secured Party, such Delivery shall be subject to Section 6.03 herein.

 

Section 6.02 No Assumption of Liability. Nothing herein shall be construed to
make the Secured Party liable as a general partner, limited partner, member or
stockholder of any Issuer, and the Secured Party by virtue of this Agreement or
any actions taken as contemplated hereby (except as referred to in the following
sentence) shall not have any of the duties, obligations or liabilities of a
general partner, limited partner, member or stockholder of any Issuer. The
parties hereto expressly agree that, unless the Secured Party shall become the
absolute owner of an Equity Interest pursuant hereto, this Agreement shall not
be construed as creating a partnership or joint venture between the Secured
Party and/or the Borrower or any other Person. The Borrower, as the owner of all
of the membership interests of Rhino GP, shall cause Rhino GP to refrain from
treating the Secured Party as a member of Rhino GP unless and until the Secured
Party has taken title to the Equity Interests pursuant to the exercise of
remedies under Article VII of this Agreement.

 

Section 6.03 Registration of Collateral in the Name of the Secured Party.
Subject to the Rhino Lien with respect to the Rhino Pledged Shares only, the
Secured Party shall have the right, at any time in its discretion and without
notice to the Borrower, to transfer to or to register in the name of the Secured
Party or any of its nominees any or all of the Collateral, subject only to the
revocable voting and similar rights specified in this Article VI. In addition,
upon the occurrence of an Event of Default, the Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing any Collateral for certificates or instruments of smaller or larger
denominations. Any Collateral that is Delivered to the Secured Party shall be
held in the Secured Party’s name, and the Issuer thereof shall restrict any
other pledge or transfer of the Collateral except by the Secured Party in
accordance with this Agreement or unless agreed in writing by the Borrower and
the Secured Party. Upon payment in full of the Secured Obligations, at the
Borrower’s expense the Secured Party agrees to take all steps that are
reasonably requested by the Borrower to the extent reasonably necessary to
Deliver the Collateral to the Borrower, free and clear of any lien, claim or
encumbrance, subject only to the Rhino Lien with respect to the Rhino Pledged
Shares.

 

Section 6.04 Appointment of Sub-Agents; Endorsements; etc. The Secured Party
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the instruments and certificates evidencing any
of the Collateral, which may be held (in the sole discretion of the Secured
Party) in the name of the Borrower, endorsed or assigned in blank or in favor of
the Secured Party or any nominee or nominees of the Secured Party or a sub-agent
appointed by the Secured Party.

 

 - 9 - 

  

 

Section 6.05 Voting Rights. Unless and until an Event of Default shall have
occurred and be continuing, the Borrower shall be entitled to exercise all
voting rights attaching to any and all Collateral owned by it, and to give
consents, waivers or ratifications in respect thereof, provided that no vote
shall be cast or any consent, waiver or ratification given or any action taken
which would violate, result in breach of any covenant contained in or be
inconsistent with any of the terms of this Agreement or any other Loan Document,
or which would have the effect of impairing the position or interests of the
Secured Party therein. All such rights of the Borrower to vote and to give
consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing.

 

Section 6.06 Entitlement of the Borrower to Cash Dividends and Distributions.
The Borrower shall be entitled to receive all cash dividends or distributions
payable in respect of its Collateral, except as otherwise provided in this
Article VI.

 

Section 6.07 Entitlement of Administrative Agent to Dividends and Distributions.
The Secured Party shall be entitled to receive and to retain as part of the
Collateral:

 

(a) all cash dividends and distributions payable in respect of the Collateral at
any time when an Event of Default shall have occurred and be continuing; and

 

(b) regardless of whether or not an Event of Default shall have occurred and be
continuing at the time of payment or distribution thereof: (i) all cash
dividends and distributions in respect of the Collateral which are reasonably
determined by the Secured Party to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital; (ii) all
other or additional securities, partnership interests, membership interests or
property (other than cash to which the Borrower is entitled under Section 6.06)
paid or distributed by way of dividend (including, without limitation, any
payment in kind dividend) or otherwise in respect of the Collateral; (iii) all
other or additional securities, partnership interests, membership interests or
property (including cash) paid or distributed in respect of the Collateral by
way of stock split, spin-off, split up, reclassification, combination of shares
or similar rearrangement; and (iv) all other or additional securities,
partnership interests, membership interests or property (including cash) which
may be paid in respect of the Collateral by reason of any consolidation, merger,
exchange of stock, conveyance of assets, liquidation or similar corporate,
partnership or limited liability company reorganization.

 

Section 6.08 Application of Dividends and Distributions. If no Event of Default
shall have occurred and be continuing at such time, the Secured Party will, at
the request of the Borrower, apply to the payment or prepayment of any of the
Secured Obligations, any cash held by it as Collateral which is attributable to
dividends or distributions received by it and then held as part of the
Collateral pursuant to this Article VI. If an Event of Default shall have
occurred and be continuing, all dividends and distributions received by the
Secured Party and then held by it pursuant to this Article VI as part of the
Collateral will be applied as provided in Section 7.05 hereof.

 

Section 6.09 Turnover by the Borrower. All dividends, distributions or other
payments that are received by the Borrower contrary to the provisions of this
Agreement shall be received in trust for the benefit of the Secured Party, shall
be segregated from other property or funds of the Borrower and shall be
forthwith paid over to the Secured Party as Collateral in the same form as so
received (with any necessary endorsement).

 

 - 10 - 

  

 

Section 6.10 Sale of Pledged Equity Interests in Connection with Enforcement. If
at any time when the Secured Party shall determine to exercise its right to sell
all or any part of the Pledged Equity Interests pursuant to Section 7.01, such
Pledged Equity Interests or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Securities Act, the
Secured Party may, in its sole and absolute discretion and to the fullest extent
permitted by applicable law now or hereafter in effect, sell such Pledged Equity
Interests or part thereof by private sale in such manner and under such
circumstances as the Secured Party may deem necessary or advisable in order that
such sale may legally be effected without such registration, provided that at
least ten days’ notice of the time and place of any such sale shall be given to
the Borrower. Without limiting the generality of the foregoing, in any such
event the Secured Party, in its sole and absolute discretion, (a) may proceed to
make such private sale notwithstanding that a registration statement for the
purpose of registering such Pledged Equity Interests or part thereof shall have
been filed under such Securities Act, (b) may approach and negotiate with a
single possible purchaser to effect such sale and (c) may restrict such sale to
a purchaser who will represent and agree that such purchaser is purchasing for
its own account, for investment, and not with a view to the distribution or sale
of such Pledged Equity Interests or part thereof. In the event of any such sale,
the Secured Party shall incur no responsibility or liability to the Borrower for
selling all or any part of the Pledged Equity Interests at a price which the
Secured Party may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until the registration as aforesaid.

 

ARTICLE VII.

 

REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

 

Section 7.01 Remedies Generally. The Borrower agrees that, if any Event of
Default shall have occurred and be continuing, then and in every such case,
subject to any mandatory requirements of applicable law then in effect, the
Secured Party, in addition to any rights now or hereafter existing under
applicable law, shall have all rights as a secured creditor under the UCC in all
relevant jurisdictions and may exercise any or all of the following rights (all
of which the Borrower hereby agrees is commercially reasonable to the fullest
extent permitted under applicable law now or hereafter in effect):

 

(a) personally, or by agents’ attorneys or other authorized representatives,
immediately retake possession of the Collateral or any part thereof from the
Borrower or any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon the
Borrower’s or such other Person’s premises where any of the Collateral is
located and remove the same;

 

(b) sell, assign or otherwise liquidate, or direct the Borrower to sell, assign
or otherwise liquidate, any or all of the Collateral or any part thereof, and
take possession of the proceeds of any such sale or liquidation;

 

(c) issue a Notice of Exclusive Control with respect to any or all of the
Collateral Accounts and issue entitlement orders or instructions with respect
thereto;

 

(d) withdraw any or all securities and/or instruments in any Controlled
Securities Account for application to the Secured Obligations in accordance with
Section 7.05 hereof;

 

(e) pay and discharge taxes, Liens or claims on or against any of the
Collateral;

 

 - 11 - 

  

 

(f) pay, perform or satisfy, or cause to be paid, performed or satisfied, for
the benefit of the Borrower, any of the obligations, terms, covenants,
provisions or conditions to be paid, observed, performed or satisfied by the
Borrower under any contract, agreement or instrument relating to its Collateral,
all in accordance with the terms, covenants, provisions and conditions thereof,
as and to the extent that the Borrower fails or refuses to perform or satisfy
the same;

 

(g) enter into any extension of, or any other agreement in any way relating to,
any of the Collateral;

 

(h) make any compromise or settlement the Secured Party deems desirable or
necessary with respect to any of the Collateral; and/or

 

(i) take possession of the Collateral or any part thereof, by directing the
Borrower or any other Person in possession thereof in writing to deliver the
same to the Secured Party at any place or places designated by the Secured
Party, in which event the Borrower shall at its own expense.

 

Section 7.02 Disposition of the Collateral. Upon the occurrence and continuance
of an Event of Default, any Collateral repossessed by the Secured Party under or
pursuant to Section 7.01 and any other Collateral whether or not so repossessed
by the Secured Party, may be sold, assigned, leased or otherwise disposed of
under one or more contracts or as an entirety, and without the necessity of
gathering at the place of sale of the property to be sold, and in general in
such manner, at such time or times, at such place or places and on such terms as
the Secured Party may, in compliance with any mandatory requirements of
applicable law, determine to be commercially reasonable. Any of the Collateral
may be sold, leased or otherwise disposed of, in the condition in which the same
existed when taken by the Secured Party or after any overhaul or repair which
the Secured Party shall determine to be commercially reasonable. Except in the
case of any Collateral that is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, (i) in the case
of any such disposition which shall be a private sale or other private
proceedings permitted by such requirements, such sale shall be made upon not
less than ten days’ written notice to the Borrower specifying the time at which
such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the ten days after the giving
of such notice, to the right of the Borrower or any nominee of the Borrower to
acquire the Collateral involved at a price or for such other consideration at
least equal to the intended sale price or other consideration so specified, and
(ii) in the case of any such disposition which shall be a public sale permitted
by such requirements, such sale shall be made upon not less than ten days’
written notice to the Borrower specifying the time and place of such sale and,
in the absence of applicable requirements of law, shall be by public auction
(which may, at the Secured Party’s sole option, be subject to reserve), after
publication of notice of such auction not less than ten days prior thereto in
two newspapers in general circulation in the city where such Collateral is
located. To the extent permitted by any such requirement of law, the Secured
Party may bid for and become the purchaser (by bidding in Secured Obligations or
otherwise) of the Collateral or any item thereof offered for sale in accordance
with this Section without accountability to the Borrower (except to the extent
of surplus money received as provided in Section 7.05). Unless so obligated
under mandatory requirements of applicable law, the Secured Party shall not be
required to make disposition of the Collateral within a period of time which
does not permit the giving of notice to the Borrower as hereinabove specified.
The Secured Party need give the Borrower only such notice of disposition as the
Secured Party shall deem to be reasonably practicable in view of such mandatory
requirements of applicable law.

 

Section 7.03 Grant of License to Use Intellectual Property. For the purpose of
enabling the Secured Party to exercise rights and remedies under this Article
VII at such time as the Secured Party shall be lawfully entitled to exercise
such rights and remedies and for no other purpose, the Borrower hereby grants to
the Secured Party an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Borrower) to use, assign or
sublicense any of the Intellectual Property of the Borrower, now owned or
hereafter acquired by the Borrower, and wherever the same may be located,
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout thereof.

 

 - 12 - 

  

 

Section 7.04 Waiver of Claims. Except as otherwise provided in this Agreement,
THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE SECURED PARTY’S TAKING POSSESSION OR
THE SECURED PARTY’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT
LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH THE BORROWER WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and the
Borrower hereby further waives, to the extent permitted by law: (i) all damages
occasioned by such taking of possession except any damages which are the direct
result of the Secured Party’s gross negligence or willful misconduct; (ii) all
other requirements as to the time, place and terms of sale or other requirements
with respect to the enforcement of the Secured Party’s rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay, extension or
moratorium now or hereafter in force under any applicable law in order to
prevent or delay the enforcement of this Agreement or the absolute sale of the
Collateral or any portion thereof, and the Borrower, for itself and all who may
claim under it, insofar as it or they now or hereafter lawfully may, hereby
waives the benefit of all such laws to the fullest extent permitted by
applicable law now or hereafter in effect. Any sale of, or the grant of options
to purchase, or any other realization upon, any Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of the Borrower therein and thereto, and shall be a perpetual bar both at law
and in equity against the Borrower and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through and under the Borrower.

 

Section 7.05 Application of Proceeds. All Collateral and proceeds of Collateral
obtained and realized by the Secured Party in connection with the enforcement of
this Agreement pursuant to this Article VII shall be applied as follows:

 

(i) first, to the payment to the Secured Party, for application to the Secured
Obligations in such order as the Secured Party determines in its sole
discretion; and

 

(ii) second, to the extent remaining after the application pursuant to the
preceding clause (i) and following the termination of this Agreement, to the
Borrower or to whomever may be lawfully entitled to receive such payment.

 

Section 7.06 Remedies Cumulative. Each and every right, power and remedy hereby
specifically given to the Secured Party shall be in addition to every other
right, power and remedy specifically given under this Agreement or the other
Loan Documents or now or hereafter existing at law or in equity, or by statute,
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the Secured Party. All
such rights, powers and remedies shall be cumulative and the exercise or the
beginning of exercise of one shall not be deemed a waiver of the right to
exercise any other or others. No delay or omission of the Secured Party in the
exercise of any such right, power or remedy, or partial or single exercise
thereof, and no renewal or extension of any of the Secured Obligations, shall
impair or constitute a waiver of any such right, power or remedy or shall be
construed to be a waiver of any Event of Default or an acquiescence therein. No
notice to or demand on the Borrower in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Secured Party to any other or further action
in any circumstances without notice or demand. In the event that the Secured
Party shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit the Secured Party may recover
reasonable, actual expenses, including attorneys’ fees, and the amounts thereof
shall be included in such judgment.

 

 - 13 - 

  

 

Section 7.07 Discontinuance of Proceedings. In case the Secured Party shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Secured Party, then and in every such case the Borrower, the
Secured Party and each holder of any of the Secured Obligations shall be
restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Secured Party shall continue as if no
such proceeding had been instituted.

 

Section 7.08 Purchasers of Collateral. Upon any sale of any of the Collateral by
the Secured Party hereunder (whether by virtue of the power of sale herein
granted, pursuant to judicial process or otherwise), the receipt of the Secured
Party or the officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Secured Party or such officer or be answerable
in any way for the misapplication or nonapplication thereof.

 

ARTICLE VIII.

 

MISCELLANEOUS

 

Section 8.01 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be given as provided in
the Note.

 

Section 8.02 Entire Agreement. This Agreement, the Note, the Securities Account
Control Agreement and the other Loan Documents represent the final agreement
among the parties with respect to the subject matter hereof and thereof,
supersede any and all prior agreements and understandings, oral or written,
relating to the subject matter hereof and thereof, and may not be contradicted
by evidence of prior, contemporaneous or subsequent oral agreements among the
parties. There are no unwritten oral agreements among the parties.

 

Section 8.03 Obligations Absolute. The obligations of the Borrower under this
Agreement shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever,
other than indefeasible payment in full of, and complete performance of, all of
the Secured Obligations, including, without limitation:

 

(a) any renewal, extension, amendment or modification of, or addition or
supplement to, or deletion from other Loan Documents, or any other instrument or
agreement referred to therein, or any assignment or transfer of any thereof;

 

(b) any waiver, consent, extension, indulgence or other action or inaction under
or in respect of any such agreement or instrument or this Agreement except as
expressly provided in such renewal, extension, amendment, modification,
addition, supplement, assignment or transfer;

 

(c) any furnishing of any additional security to the Secured Party or its
assignee or any acceptance thereof or any release of any security by the Secured
Party or its assignee;

 

 - 14 - 

  

 

(d) any limitation on any Person’s liability or obligations under any such
instrument or agreement or any invalidity or unenforceability, in whole or in
part, of any such instrument or agreement or any term thereof;

 

(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Borrower or
any Subsidiary of the Borrower, or any action taken with respect to this
Agreement by any trustee or receiver, or by any court, in any such proceeding,
whether or not the Borrower shall have notice or knowledge of any of the
foregoing; or

 

(f) to the fullest extent permitted by applicable law now or hereafter in
effect, any other event or circumstance which, but for this provision, might
release or discharge a guarantor or other surety from its obligations as such.

 

Section 8.04 Successors and Assigns. This Agreement shall be binding upon the
Borrower and its successors and assigns and shall inure to the benefit of the
Secured Party and its successors and assigns, provided that the Borrower may not
transfer or assign any or all of its rights or obligations hereunder without the
written consent of the Secured Party. All agreements, statements,
representations and warranties made by the Borrower herein or in any certificate
or other instrument delivered by the Borrower or on its behalf under this
Agreement shall be considered to have been relied upon by the Secured Party and
shall survive the execution and delivery of this Agreement and the other Loan
Documents regardless of any investigation made by the Secured Party or on its
behalf.

 

Section 8.05 Headings Descriptive. The headings of the several Sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

 

Section 8.06 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

Section 8.07 Enforcement Expenses, etc. The Borrower hereby agrees to pay all
out-of-pocket costs and expenses of the Secured Party in connection with the
enforcement of this Agreement, the preservation of the Collateral, the
perfection of the security interest, and any amendment, waiver or consent
relating hereto.

 

Section 8.08 Termination. After the Secured Obligations have been paid in full,
this Agreement shall terminate, and the Secured Party, at the request and
expense of the Borrower, will execute and deliver to the Borrower a proper
instrument or instruments (including UCC termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to the Borrower (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Secured Party and as has not theretofore been sold or otherwise applied
or released pursuant to this Agreement.

 

Section 8.09 Other Creditors, etc. Not Third-Party Beneficiaries. No creditor of
the Borrower or any of its Affiliates, or other Person claiming by, through or
under the Borrower or any of its Affiliates, other than the Secured Party, and
their respective successors and assigns, shall be a beneficiary or third-party
beneficiary of this Agreement or otherwise shall derive any right or benefit
herefrom.

 

 - 15 - 

  

 

Section 8.10 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, including
via facsimile transmission or other electronic transmission capable of
authentication, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same agreement.
A set of counterparts executed by all the parties hereto shall be lodged with
the Borrower and the Secured Party.

 

Section 8.11 Amendments. No amendment or waiver of any provision of this
Agreement and no consent to any departure by the Borrower shall in any event be
effective unless the same shall be in writing and signed by the Secured Party
and the Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

Section 8.12 Separate Actions. A separate action may be brought and prosecuted
against the Borrower or any other guarantor or obligor whether or not any other
guarantor or obligor or the Borrower be joined in such action or actions.

 

Section 8.13 Full Recourse Obligations; Effect of Fraudulent Transfer Laws. It
is the desire and intent of the Borrower and the Secured Party that this
Agreement shall be enforced as a full recourse obligation of the Borrower to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If and to the extent that the
obligations of the Borrower under this Agreement would, in the absence of this
sentence, be adjudicated to be invalid or unenforceable because of any
applicable state or federal law relating to fraudulent conveyances or transfers,
then the amount of the Borrower liability hereunder in respect of the Secured
Obligations shall be deemed to be reduced ab initio to that maximum amount that
would be permitted without causing the Borrower’s obligations hereunder to be so
invalidated.

 

Section 8.14 Governing Law; Venue; Waiver of Jury Trial.

 

(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE BORROWER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

(c) THE BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND THE BORROWER HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.14 WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

 

[Remainder of page intentionally left blank]

 

 - 16 - 

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.

 

      ROYAL ENERGY RESOURCES, INC., as the Borrower                 By:        
Name:         Title:             Accepted by:               WESTON ENERGY LLC,
as the Secured Party                 By:         Name:         Title:        

 

[Signature page to Pledge and Security Agreement]

 

  

  

 

Acknowledgement:

 

The undersigned acknowledges having received a copy of this Agreement and
confirms that nothing contained therein shall result in a default by the
Borrower under the Rhino Pledge Agreement. Except as provided in the Rhino
Pledge Agreement, the undersigned agrees to restrict any other pledge or
transfer of the Collateral except by the Secured Party in accordance with this
Agreement or unless agreed in writing by the Borrower and the Secured Party.

 

RHINO RESOURCE PARTNERS LP         By: Rhino GP LLC, its general partner        
By:     Name:     Title:    

 

[Signature page to Pledge and Security Agreement]

 

  

  

 

Schedule 1

 

Collateral

 

Issuer and Type of
Organization  Certificate
Number  Number of Shares,
Units, Etc.   Percent of Equity
Interest Owned   Type of Equity Interest  Percent of Equity
Interest Pledged  Rhino GP LLC
Limited liability company  N/A   N/A    100%  LLC membership interests   100%
Rhino Resource Partners LP Limited partnership  N/A   6,637,678    *84.6% 
Common (unregistered)   100% Rhino Resource Partners LP Limited partnership 
N/A   39,234    *84.6%  Common (registered)   100%

Rhino Resource Partners LP

Limited partnership

  N/A   1,060,339    *84.6%  Subordinated   100%

 

*The common (unregistered), common (registered) and subordinated Equity
Interests in Rhino Resource Partners LP owned by the Borrower total 84.6% of the
total equity interests issued by Rhino Resource Partners LP. 1,333,334 Common
Units are subject to the Rhino Pledge Agreement.

 

  

  

 

 

 

PLEDGE AND SECURITY AGREEMENT

 

dated as of

September 30, 2016

 

by

 

ROYAL ENERGY RESOURCES, INC.,

as the Borrower,

 

for the benefit of

 

WESTON ENERGY LLC

 

 

 

  

  

 

Table of Contents

 

      Page         ARTICLE I. DEFINITIONS AND TERMS   1 Section 1.01 Defined
Terms   1 Section 1.02 Additional Defined Terms   1 Section 1.03 Terms Generally
  4         ARTICLE II. SECURITY INTEREST   5 Section 2.01 Grant of Security
Interest   5 Section 2.02 No Assumption of Liability   5 Section 2.03 Power of
Attorney   5         ARTICLE III. REPRESENTATIONS AND WARRANTIES   6 Section
3.01 Title and Authority   6 Section 3.02 Absence of Other Liens   6 Section
3.03 Validity of Security Interest   6 Section 3.04 Perfection of Security
Interest under UCC   6 Section 3.05 Places of Business; Jurisdiction of
Organization; Locations of Collateral   7 Section 3.06 Collateral   7 Section
3.07 Securities Accounts   7 Section 3.08 Status of Collateral   7        
ARTICLE IV. GENERAL COVENANTS   7 Section 4.01 No Other Liens; Defense of Title;
Securities Accounts   7 Section 4.02 Further Assurances; Filings and Recordings
  7 Section 4.03 Authorization to File Financing Statements   7 Section 4.04
Maintenance of Records   8 Section 4.05 Legal Status   8 Section 4.06
Inspections and Verification   8 Section 4.07 Protective Advances by the Secured
Party   8         ARTICLE V. SECURITIES ACCOUNTS   8 Section 5.01 Securities
Accounts   8         ARTICLE VI. COLLATERAL   8 Section 6.01 Delivery of
Certificates and Instruments for Collateral   8 Section 6.02 No Assumption of
Liability   9 Section 6.03 Registration of Collateral in the Name of the Secured
Party   9

 

 -i- 

  

 

Section 6.04 Appointment of Sub-Agents; Endorsements; etc.   9 Section 6.05
Voting Rights   10 Section 6.06 Entitlement of the Borrower to Cash Dividends
and Distributions   10 Section 6.07 Entitlement of Administrative Agent to
Dividends and Distributions   10 Section 6.08 Application of Dividends and
Distributions   10 Section 6.09 Turnover by the Borrower   10 Section 6.10 Sale
of Pledged Equity Interests in Connection with Enforcement   11         ARTICLE
VII. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT   11 Section 7.01 Remedies
Generally   11 Section 7.02 Disposition of the Collateral   12 Section 7.03
Grant of License to Use Intellectual Property   12 Section 7.04 Waiver of Claims
  13 Section 7.05 Application of Proceeds   13 Section 7.06 Remedies Cumulative
  13 Section 7.07 Discontinuance of Proceedings   14 Section 7.08 Purchasers of
Collateral   14         ARTICLE VIII. MISCELLANEOUS   14 Section 8.01 Notices  
14 Section 8.02 Entire Agreement   14 Section 8.03 Obligations Absolute   14
Section 8.04 Successors and Assigns   15 Section 8.05 Headings Descriptive   15
Section 8.06 Severability   15 Section 8.07 Enforcement Expenses, etc.   15
Section 8.08 Termination   15 Section 8.09 Other Creditors, etc. Not Third-Party
Beneficiaries   15 Section 8.10 Counterparts   16 Section 8.11 Amendments   16
Section 8.12 Separate Actions   16 Section 8.13 Full Recourse Obligations;
Effect of Fraudulent Transfer Laws   16 Section 8.14 Governing Law; Venue;
Waiver of Jury Trial   16

 

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