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        Exhibit 10.2      
      
        
      
      
        Execution Version      
    

GUARANTY AND COLLATERAL AGREEMENT

dated as of September 28, 2007

made by

REX ENERGY CORPORATION

and

EACH OF THE OTHER GRANTORS (AS DEFINED HEREIN)

in favor of

KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent

 

 

 

 
 

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TABLE OF CONTENTS
 

 
Page
Article I
Definitions
   
Section 1.01                                Definitions
1
Section 1.02                                Other Definitional Provisions
7
Section 1.03                                Rules of Interpretation
7
   
Article II
Guarantee
   
Section 2.01                                Guarantee
7
Section 2.02                                Right of Contribution
8
Section 2.03                                No Subrogation
8
Section 2.04                                Guaranty Amendments, Etc. with
respect to the Borrower
                                                         Obligations
8
Section 2.05                                Waivers
9
Section 2.06                                Guaranty Absolute and Unconditional
9
Section 2.07                                Reinstatement
11
Section 2.08                                Payments
11
   
Article III
Grant of Security Interest
   
Section 3.01                                Grant of Security Interest
11
Section 3.02                                Transfer of Pledged Securities
12
   
Article IV
Representations and Warranties
   
Section 4.01                                Representations in Credit Agreement
13
Section 4.02                                Title; No Other Liens
13
Section 4.03                                Perfected First Priority Liens
13
Section 4.04                                Grantor Information
13
Section 4.05                                Inventory and Equipment
14
Section 4.06                                Farm Products
14
Section 4.07                                Investment Property
14
Section 4.08                                Receivables
15
Section 4.09                                Intellectual Property
15
Section 4.10                                Commercial Tort Claims
15
Section 4.11                                Benefit to the Guarantors
16
   
Article V
Covenants
   
Section 5.01                                Covenants and Events of Default in
Credit Agreement
16
Section 5.02                                Delivery of Instruments,
Certificated Securities and Chattel Paper
16
Section 5.03                                Maintenance of Insurance
16
Section 5.04                                Payment of Obligations
16
Section 5.05                                Maintenance of Perfected Security
Interest; Further Documentation
16
Section 5.06                                Notices
17
Section 5.07                                Investment Property
17
Section 5.08                                Receivables
19
Section 5.09                                Intellectual Property
19
Section 5.10                                Commercial Tort Claims
21
   
Article VI
Remedial Provisions
   
Section 6.01                                Certain Matters Relating to
Receivables
21
Section 6.02                                Communications with Obligors;
Grantors Remain Liable
22
Section 6.03                                Pledged Securities
22
Section 6.04                                Proceeds to be Turned Over to
Administrative Agent
23
Section 6.05                                Application of Proceeds
24
Section 6.06                                Code and Other Remedies
24
Section 6.07                                Registration Rights
25
Section 6.08                                Waiver; Deficiency
26
Section 6.09                                Non-Judicial Enforcement
26
   
Article VII
The Administrative Agent
   
Section 7.01                                Administrative Agent’s Appointment
as Attorney-in-Fact, Etc.
26
Section 7.02                                Duty of Administrative Agent
28
Section 7.03                                Execution of Financing Statements
29
Section 7.04                                Authority of Administrative Agent
29
   
Article VIII
Subordination of Indebtedness
   
Section 8.01                                Subordination of All Grantor Claims
29
Section 8.02                                Claims in Bankruptcy
30
Section 8.03                                Payments Held in Trust
30
Section 8.04                                Liens Subordinate
30
Section 8.05                                Notation of Records
30
   
Article IX
Miscellaneous
   
Section 9.01                                No Waiver by Course of Conduct;
Cumulative Remedies
31
Section 9.02                                Notices
31
Section 9.03                                Enforcement Expenses; Indemnities
31
Section 9.04                                Amendments in Writing
32
Section 9.05                                Successors and Assigns
32
Section 9.06                                Survival; Revival; Reinstatement
32
Section 9.07                                Counterparts; Integration;
Effectiveness
33
Section 9.08                                Severability
33
Section 9.09                                Set-Off
33
Section 9.10                                Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial
34
Section 9.11                                Headings
35
Section 9.12                                Acknowledgments
35
Section 9.13                                Additional Grantors and Additional
Pledged Securities
36
Section 9.14                                Releases
36
Section 9.15                                Acceptance
37

 

 
 

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SCHEDULES:
 
1           Notice Addresses
2           Investment Property
3           Perfection Matters
4           Location of Jurisdiction of Organization and Chief Executive Office
5           Inventory and Equipment Locations
6           Intellectual Property
7           Receivables from Government Authorities

ANNEXES:
I            Form of Acknowledgment and Consent
II           Form of Assumption Agreement
III          Form of Supplement

 
 

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This GUARANTY AND COLLATERAL AGREEMENT, dated as of September 28, 2007, is made
by Rex Energy Corporation, a corporation duly formed and existing under the laws
of the State of Delaware (the “Borrower”), Rex Energy I, LLC, a limited
liability company duly formed and existing under the laws of the State of
Delaware (“Rex Energy I”), Rex Energy Operating Corp., a corporation duly formed
and existing under the laws of the State of Delaware (“Rex Energy Operating”),
Penn Tex Energy, Inc., a corporation duly formed and existing under the laws of
the State of Delaware (“Penn Tex Energy”), PennTex Resources Illinois, Inc., a
corporation duly formed and existing under the laws of the State of Delaware
(“PennTex Resources Illinois”), Rex Energy IV, LLC, a limited liability company
duly formed and existing under the laws of the State of Delaware (“Rex Energy
IV”) and PennTex Resources, L.P., a limited partnership duly formed and existing
under the laws of the State of Texas (“Penn Tex Resources”) (the Borrower, Rex
Energy I, Rex Energy Operating, Penn Tex Energy, Penn Tex Resources Illinois,
Rex Energy IV, Penn Tex Resources and any other Person that becomes a party
hereto from time to time after the date hereof, the “Grantors”), in favor of
KeyBank National Association, as administrative agent (in such capacity,
together with its successors in such capacity, the “Administrative Agent”) for
the banks and other financial institutions (the “Lenders”) from time to time
parties to the Credit Agreement dated as of September 28, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the Administrative Agent and the Lenders.
 
R E C I T A L S
 
A.           It is a condition precedent to the obligation of the Lenders to
make their respective loans to and extensions of credit on behalf of the
Borrower under the Credit Agreement that the Grantors shall have executed and
delivered this Agreement to the Administrative Agent for the ratable benefit of
the Lenders.
 
B.           Now, therefore, in consideration of the premises herein and to
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective loans to and
extensions of credit on behalf of the Borrower thereunder, each Grantor hereby
agrees with the Administrative Agent, for the ratable benefit of the Lenders, as
follows:
 
ARTICLE I
 
Definitions
 
Section 1.01                Definitions.
 
(a)           Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein have the meanings given to them in the Credit
Agreement, and all uncapitalized terms which are defined in the UCC (as defined
herein) on the date hereof are used herein as so defined.
 
(b)           The following terms are used herein as defined in the UCC on the
date hereof:  Accounts, Certificated Security, Chattel Paper, Commercial Tort
Claims, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures,
General Intangibles,  Instruments,
 

 
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Inventory, Letter-of-Credit Rights, Payment Intangibles, Proceeds, Supporting
Obligations, and Tangible Chattel Paper.
 
(c)           The following terms have the following meanings:
 
“Acknowledgment and Consent” means an Acknowledgement and Consent substantially
in the form attached hereto as Annex I.
 
“Agreement” means this Guaranty and Collateral Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
 
“Assumption Agreement” means an Assumption Agreement substantially in the form
attached hereto as Annex II.
 
“Bankruptcy Code” means Title 11, United States Code, as amended from time to
time.
 
“Borrower Obligations” means the collective reference to the unpaid principal of
and interest on the Loans and reimbursement obligations in respect of Letters of
Credit, the Indebtedness, and all other obligations and liabilities of the
Borrower and the other Grantors (including, without limitation, interest
accruing at the then applicable rate provided in the Credit Agreement after the
maturity of the Loans and LC Exposure and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the
Secured Parties, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Secured Documents, in each case, whether on
account of principal, interest, reimbursement obligations, payments in respect
of an early termination date, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Secured Parties that are required to be paid by the Borrower pursuant to the
terms of any of the Secured Documents).
 
“Collateral” has the meaning assigned such term in Section 3.01.
 
“Collateral Account” means any collateral account established by the
Administrative Agent as provided in Section 6.01 or Section 6.04.
 
“Copyright Licenses” means any written agreement naming any Grantor as licensor
or licensee, granting any right under any Copyright, including the grant of
rights to manufacture, distribute, exploit and sell materials derived from any
Copyright.
 
“Copyrights” means the collective reference to (a) all copyrights arising under
the laws of the United States, any other country or any political subdivision
thereof, whether registered or unregistered and whether published or unpublished
(including those listed in Schedule 6), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
and (b) the right to obtain all renewals thereof.
 

 
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“Deposit Account” has the meaning given such term in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including any demand, time,
savings, passbook or like account maintained with a depositary institution.
 
“Excluded Property” means any of the following property or assets of any
Grantor:
 
(a)           only to the extent such prohibition is permitted pursuant to the
Credit Agreement, any property or assets to the extent that such Grantor is
prohibited from granting a security interest in, pledge of, or charge, mortgage
or other Lien upon any such property or assets by reason of (i) an existing
negative pledge provision or (ii) applicable law or regulation to which such
Grantor is subject;
 
(b)           General Intangibles, Investment Property and all other Collateral
of a contractual nature which by their respective express terms (i) prohibit the
grant of any Lien, (ii) provides that any such grant shall constitute or result
in the unenforceability of any right, interest or benefit of such Grantor
therein, or in a breach or termination thereof, or a default thereunder, or
(iii) requires the consent of a third party thereto for a grant of a Lien
therein;
 
(c)           permits and licenses to the extent the grant of a Lien therein is
prohibited under applicable law or regulation or by their express terms, except
to the extent such prohibition is ineffective under the UCC;
 
(d)           any deposit accounts (i) exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of such
Grantor’s employees or (ii) exclusively holding deposits made by any purchasers
of Hydrocarbons in contemplation of the sale of such Hydrocarbons;
 
(e)           any Vehicles; and
 
(f)           34% of the Equity Interests in each direct Foreign Subsidiary of
such Grantor that is a “controlled foreign corporation” under the Code.
 
“Foreign Subsidiary” means any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
 
“Foreign Subsidiary Voting Stock” means the voting Equity Interests of any
Foreign Subsidiary.
 
“Grantor Claims” has the meaning assigned to such term in Section 8.01.
 
“Guarantor Obligations” means with respect to any Guarantor, the collective
reference to (a) the Borrower Obligations and (b) all obligations and
liabilities of such Guarantor which may arise under or in connection with any
Secured Document to which such Guarantor is a party (including, without
limitation, Article II of this Agreement), in each case, whether on account of
principal, interest, guarantee obligations, reimbursement obligations, payments
in respect of an early termination date, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to any Secured Party under any Secured Document).
 

 
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“Guarantors” means the collective reference to all Grantors other than the
Borrower.
 
“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
 
“Intercompany Note” means any promissory note evidencing loans made by any
Grantor to the Borrower or any of its Subsidiaries.
 
“Investment Property” means the collective reference to (a) all “investment
property” as such term is defined in Section 9.102(a)(49) of the UCC (other than
any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged
Securities”) and (b) whether or not constituting “investment property” as so
defined, all Pledged Notes and all Pledged Securities.
 
“Issuers” means the collective reference to each issuer of any Investment
Property.
 
“LLC” means, with respect to any Grantor, each limited liability company
described or referred to in Schedule 2 in which such Grantor has an interest.
 
“LLC Agreement” means each operating agreement relating to an LLC, as each
agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified from time to time.
 
“Obligations” means:  (a) in the case of the Borrower, the Borrower Obligations
and (b) in the case of each Guarantor, its Guarantor Obligations.
 
“Partnership” means, with respect to any Grantor, each partnership described or
referred to in Schedule 2 in which such Grantor has an interest.
 
“Partnership Agreement” means each partnership agreement governing a
Partnership, as each such agreement has heretofore been, and may hereafter be,
amended, restated, supplemented or otherwise modified.
 
“Patent License” means all agreements, whether written or oral, providing for
the grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any thereof referred to in Schedule 6.
 
“Patents” means the collective reference to (a) all letters patent of the United
States, any other country or any political subdivision thereof, all reissues and
extensions thereof and all goodwill associated therewith, including any of the
foregoing referred to in Schedule 6, (b) all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including any of the foregoing referred to in
Schedule 6 and (c) all rights to obtain any reissues or extensions of the
foregoing.
 

 
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“Pledged LLC Interests” means, with respect to any Grantor, all right, title and
interest of such Grantor as a member of all LLCs and all right, title and
interest of such Grantor in, to and under the LLC Agreements.
 
“Pledged Notes”  all promissory notes listed on Schedule 2, all Intercompany
Notes at any time issued to any Grantor and all other promissory notes issued to
or held by any Grantor (other than promissory notes issued in connection with
extensions of trade credit by any Grantor in the ordinary course of business).
 
“Pledged Partnership Interests” means, with respect to any Grantor, all right,
title and interest of such Grantor as a limited or general partner in all
Partnerships and all right, title and interest of such Grantor in, to and under
the Partnership Agreements.
 
“Pledged Securities” means: (a) the Equity Interests described or referred to in
Schedule 2 (as the same may be supplemented from time to time pursuant to a
Supplement), together with any other Equity Interests of any Person that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect;
provided that in no event shall more than 66% of the total outstanding Foreign
Subsidiary Voting Stock of any Foreign Subsidiary be required to be pledged
hereunder; including, but not limited to, all Pledged LLC Interests and Pledged
Partnership Interests related thereto; and (b) the certificates or instruments,
if any, representing (i) such Equity Interests, (ii) all dividends (cash, Equity
Interests or otherwise), cash, instruments, rights to subscribe, purchase or
sell and all other rights and Property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
securities, (iii) all replacements, additions to and substitutions for any of
the Property referred to in this definition, including, without limitation,
claims against third parties, (iv) the proceeds, interest, profits and other
income of or on any of the Property referred to in this definition, (v) all
security entitlements in respect of any of the foregoing, if any, and (vi) all
books and records relating to any of the Property referred to in this
definition.
 
“Proceeds” means all “proceeds” as such term is defined in the UCC on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Securities, collections thereon or distributions
or payments with respect thereto.
 
“Receivable” means any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including any
Account).
 
“Secured Documents” means the collective reference to the Credit Agreement, the
other Loan Documents, each Secured Swap Agreement and any other document made,
delivered or given in connection with any of the foregoing.
 
“Secured Parties” means the collective reference to the Administrative Agent,
the Lenders, and the Lenders and Affiliates of Lenders that are parties to
Secured Swap Agreements.  For the avoidance of doubt, (a) a Lender or an
Affiliate of a Lender that is a party to a Swap Agreement between it and the
Borrower or any or any Subsidiary ceases immediately and automatically to be a
Secured Party when such Swap Agreement ceases to be a Secured Swap Agreement,
and (b) a Person that is an Affiliate of a Lender when it became a party to a
Swap
 

 
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Agreement between it and the Borrower or any Subsidiary immediately and
automatically ceases to be a Secured Party when it no longer is an Affiliate of
a Lender, and in each case, it shall have no benefits, rights or other interests
under this Agreement, including the Liens and guarantees provided herein, or
then or thereafter be deemed a Secured Party hereunder for any purpose or
reference.
 
“Secured Swap Agreement” means any Swap Agreement between the Borrower or any of
its Subsidiaries and any Lender or any Affiliate of any Lender  (as long as and
solely for the period during which such Person is an Affiliate of a Lender)
while such Person (or, in the case of an Affiliate of a Lender, the Person so
affiliated therewith) is a Lender regardless of when such Swap Agreement was
entered into.  For the avoidance of doubt, a Swap Agreement immediately and
automatically ceases to be a Secured Swap Agreement if (a) the Person that is
the counterparty to the Borrower or one of its Subsidiaries under a Swap
Agreement ceases to be a Lender under the Credit Agreement (or, in the case of
an Affiliate of a Lender, the Person affiliated therewith ceases to be a Lender
under the Credit Agreement) or (b) all amounts owed under the Loan Documents are
paid, no Letters of Credit are outstanding and all Commitments are terminated.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Trademark License” means any agreement, whether written or oral, providing for
the grant by or to any Grantor of any right to use any Trademark.
 
“Trademarks” means (a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including any of the foregoing referred to in Schedule 6 and (b) the right to
obtain all renewals thereof.
 
“Supplement” means a Supplement substantially in the form attached hereto as
Annex III.
 
“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of Texas; provided, however, that, in the event that, by reason of
mandatory provisions of law, any of the attachment, perfection or priority of
the Administrative Agent’s security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of Texas, the term “UCC” shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection, the effect thereof or priority and for purposes of
definitions related to such provisions.
 
“Vehicles” means all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any state
and, in any event including, without limitation, the vehicles listed on Schedule
7 and all tires and other appurtenances to any of the foregoing.
 

 
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Section 1.02                Other Definitional Provisions.  Where the context
requires, terms relating to the Collateral or any part thereof, when used in
relation to a Grantor, refer to such Grantor’s Collateral or the relevant part
thereof.
 
Section 1.03                Rules of Interpretation.  Section 1.04 and
Section 1.05 of the Credit Agreement are hereby incorporated herein by reference
and shall apply to this Agreement, mutatismutandis.
 
ARTICLE II
Guarantee
 
Section 2.01                Guarantee.
 
(a)           Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Secured Parties and each of
their respective successors, indorsees, transferees and assigns, the prompt and
complete payment in cash when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.  This is a guarantee of
payment and not collection and the liability of each Guarantor is primary and
not secondary.
 
(b)           Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.02).
 
(c)           Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Article II or
affecting the rights and remedies of any Secured Party hereunder.
 
(d)           Each Guarantor agrees that if the maturity of the Borrower
Obligations is accelerated by bankruptcy or otherwise, such maturity shall also
be deemed accelerated for the purpose of this guarantee without demand or notice
to such Guarantor.  Unless released pursuant to Section 9.14, the guarantee of
each Guarantor contained in this Article II shall remain in full force and
effect until all the Borrower Obligations shall have been satisfied by payment
in full in cash, no Letter of Credit shall be outstanding and all of the
Commitments are terminated, notwithstanding that from time to time during the
term of the Credit Agreement, no Borrower Obligations may be outstanding.
 
(e)           No payment made by any Grantor, any other guarantor or any other
Person or received or collected by any Secured Party from the Borrower, any of
the Guarantors, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the
 

 
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Borrower Obligations are paid in full in cash, no Letter of Credit shall be
outstanding and all of the Commitments are terminated.
 
Section 2.02                Right of Contribution.  Each Guarantor hereby agrees
that to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek
and receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment.  Each Guarantor’s right of
contribution shall be subject to the terms and conditions of Section 2.03.  The
provisions of this Section 2.02 shall in no respect limit the obligations and
liabilities of any Guarantor to the Secured Parties, and each Guarantor shall
remain liable to the Secured Parties for the full amount guaranteed by such
Guarantor hereunder.
 
Section 2.03               No Subrogation.  Notwithstanding any payment made by
any Guarantor hereunder or any set-off or application of funds of any Guarantor
by any Secured Party, no Guarantor shall be entitled to exercise its rights to
be subrogated to any of the rights of any Secured Party against the Borrower or
any other Guarantor or any collateral security or guarantee or right of offset
held by any Secured Party for the payment of the Borrower Obligations, nor shall
any Guarantor seek any indemnity, exoneration, participation, contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Secured Parties
on account of the Borrower Obligations are irrevocably and indefeasibly paid in
full in cash, no Letter of Credit shall be outstanding and all of the
Commitments are terminated.  If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been irrevocably and indefeasibly paid in full in
cash, any Letter of Credit shall be outstanding or any of the Commitments are in
effect, such amount shall be held by such Guarantor in trust for the Secured
Parties, and shall, forthwith upon receipt by such Guarantor, be turned over to
the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations in accordance with Section 10.02(c) of
the Credit Agreement.
 
Section 2.04               Guaranty Amendments, Etc. with respect to the
Borrower Obligations.  Each Guarantor shall remain obligated hereunder, and such
Guarantor’s obligations hereunder shall not be released, discharged or otherwise
affected, notwithstanding that, without any reservation of rights against any
Guarantor and without notice to, demand upon or further assent by any Guarantor
(which notice, demand and assent requirements are hereby expressly waived by
such Guarantor):  (i) any demand for payment of any of the Borrower Obligations
made by any Secured Party may be rescinded by such Secured Party or otherwise
and any of the Borrower Obligations continued; (ii) the Borrower Obligations,
the liability of any other Person upon or for any part thereof or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by, or any indulgence
or forbearance in respect thereof granted by, any Secured Party; (iii) any
Secured Document may be amended, modified, supplemented or terminated, in whole
or in part, as the Secured Parties may deem advisable from time to time; (iv)
any collateral security, guarantee or right of offset at any time held by any
Secured Party for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released; (v) any additional guarantors,
makers or endorsers of the
 

 
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Borrower Obligations may from time to time be obligated on the Borrower
Obligations or any additional security or collateral for the payment and
performance of the Borrower Obligations may from time to time secure the
Borrower Obligations; or vi) any other event shall occur which constitutes a
defense or release of sureties generally.  No Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Article II or any Property subject thereto.
 
Section 2.05               Waivers.  Each Guarantor hereby waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by any Secured Party upon the
guarantee contained in this Article II or acceptance of the guarantee contained
in this Article II; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Article II and no notice of creation of the Borrower Obligations or any
extension of credit already or hereafter contracted by or extended to the
Borrower need be given to any Guarantor; and all dealings between the Borrower
and any of the Guarantors, on the one hand, and the Secured Parties, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Article II.  Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Borrower Obligations.
 
Section 2.06                Guaranty Absolute and Unconditional.
 
(a)           Each Guarantor understands and agrees that the guarantee contained
in this Article II is, and shall be construed as, a continuing, completed,
absolute and unconditional guarantee of payment, and each Guarantor hereby
waives any defense of a surety or guarantor or any other obligor on any
obligations arising in connection with or in respect of any of the following and
hereby agrees that its obligations hereunder shall not be discharged or
otherwise affected as a result of any of the following:
 
(i)           the invalidity or unenforceability of any Secured Document, any of
the Borrower Obligations or any other collateral security therefor or guarantee
or right of offset with respect thereto at any time or from time to time held by
any Secured Party;
 
(ii)          any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower or any other Person against any Secured Party;
 
(iii)         the insolvency, bankruptcy arrangement, reorganization,
adjustment, composition, liquidation, disability, dissolution or lack of power
of the Borrower or any other Guarantor or any other Person at any time liable
for the payment of all or part of the Obligations, including any discharge of,
or bar or stay against collecting, any Obligation (or any part of them or
interest therein) in or as a result of such proceeding;
 

 
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(iv)          any sale, lease or transfer of any or all of the assets of the
Borrower or any other Guarantor, or any changes in the shareholders of the
Borrower or any other Guarantor;
 
(v)           any change in the corporate existence (including its constitution,
laws, rules, regulations or power), structure or ownership of any Grantor or in
the relationship between the Borrower and any Grantor;
 
(vi)         the fact that any Collateral or Lien contemplated or intended to be
given, created or granted as security for the repayment of the Obligations shall
not be properly perfected or created, or shall prove to be unenforceable or
subordinate to any other Lien, it being recognized and agreed by each of the
Guarantors that it is not entering into this Agreement in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectability
or value of any of the Collateral for the Obligations;
 
(vii)        the absence of any attempt to collect the Obligations or any part
of them from any Grantor;
 
(viii)       (1) any Secured Party’s election, in any proceeding instituted
under chapter 11 of the Bankruptcy Code, of the application of
Section 1111(b)(2) of the Bankruptcy Code; (a) any borrowing or grant of a Lien
by the Borrower, as debtor-in-possession, or extension of credit, under
Section 364 of the Bankruptcy Code; (b) the disallowance, under Section 502 of
the Bankruptcy Code, of all or any portion of any Secured Party’s claim (or
claims) for repayment of the Obligations; (c) any use of cash collateral under
Section 363 of the Bankruptcy Code; (d) any agreement or stipulation as to the
provision of adequate protection in any bankruptcy proceeding; (e) the avoidance
of any Lien in favor of the Secured Parties or any of them for any reason; or
(f) failure by any Secured Party to file or enforce a claim against the Borrower
or its estate in any bankruptcy or insolvency case or proceeding; or
 
(ix)         any other circumstance or act whatsoever, including any action or
omission of the type described in Section 2.04 (with or without notice to or
knowledge of the Borrower or such Guarantor), which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee contained in this
Article II, in bankruptcy or in any other instance.
 
(b)           When making any demand hereunder or otherwise pursuing its rights
and remedies hereunder against any Guarantor, any Secured Party may, but shall
be under no obligation to, join or make a similar demand on or otherwise pursue
or exhaust such rights and remedies as it may have against the Borrower, any
other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect
thereto, and any failure by any Secured Party to make any such demand, to pursue
such other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of any
Secured Party against any Guarantor.  For
 

 
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the purposes hereof “demand” shall include the commencement and continuance of
any legal proceedings.
 
Section 2.07                Reinstatement.  The guarantee contained in this
Article II shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
is rescinded or must otherwise be restored or returned by any Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its Property, or otherwise,
all as though such payments had not been made.
 
Section 2.08               Payments.  Subject to Section 5.03 of the Credit
Agreement, each Guarantor hereby guarantees that payments hereunder will be paid
to the Administrative Agent, for the ratable benefit of the Secured Parties,
without set-off, deduction or counterclaim, in dollars, in immediately available
funds, at the offices of the Administrative Agent specified in Section 12.01 of
the Credit Agreement (or from time to time designated in accordance with the
terms thereof).
 
ARTICLE III
 
Grant of Security Interest
 
Section 3.01                Grant of Security Interest.  Each Grantor hereby
pledges, and collaterally assigns and transfers to the Administrative Agent, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a continuing security interest in, lien on and right of setoff
against, all of the following Property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest and whether now existing or
hereafter coming into existence (collectively, the “Collateral”), as security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:
 
(a)
  all Accounts;

 
(b)
  all Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel
Paper);

 
(c)
  all Commercial Tort Claims (including, without limitation, with respect to the
matters set forth on Schedule 3);

 
(d)
  all Deposit Accounts;

 
(e)
  all Documents;

 
(f)
  all Equipment;

 
(g)
  all Fixtures;

 
(h)
  all General Intangibles (including, without limitation, all rights in and
under Swap Agreements);

 

 
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(i)
  all Instruments;

 
(j)
  all Intellectual Property;

 
(k)
  all Inventory;

 
(l)
  all Investment Property;

 
(m)
  all Letter-of-Credit Rights;

 
(n)
   all other Property not otherwise described above (except for the Excluded
Property and any Property specifically excluded from any defined term used in
any clause of this Section);

 
(o)
  all books and records pertaining to the Collateral; and

 
(p)
  to the extent not otherwise included, all Proceeds, Supporting Obligations and
products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing;

 
provided, however, notwithstanding anything to the contrary contained herein or
in an other Secured Document, this Agreement shall not grant, effect or
constitute or evidence a grant of a security interest, collateral assignment or
transfer or any other type of Lien in Excluded Property.
 
Section 3.02               Transfer of Pledged Securities.  All certificates or
instruments representing or evidencing the Pledged Securities shall be delivered
to and held pursuant hereto by the Administrative Agent or a Person designated
by the Administrative Agent and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, and accompanied by any required transfer tax stamps to
effect the pledge of the Pledged Securities to the Administrative
Agent.  Notwithstanding the preceding sentence, at the Administrative Agent’s
discretion, all Pledged Securities must be delivered or transferred in such
manner as to permit the Administrative Agent to be a “protected purchaser” to
the extent of its security interest as provided in Section 8.303 of the UCC (if
the Administrative Agent otherwise qualifies as a protected purchaser).  During
the continuance of an Event of Default, the Administrative Agent shall have the
right, at any time in its discretion and without notice, to transfer to or to
register in the name of the Administrative Agent or any of its nominees any or
all of the Pledged Securities, subject only to the revocable rights of the
relevant Grantor specified in Section 6.03.  In addition, during the continuance
of an Event of Default, the Administrative Agent shall have the right at any
time to exchange certificates or instruments representing or evidencing Pledged
Securities for certificates or instruments of smaller or larger denominations.
 
ARTICLE IV
Representations and Warranties
 
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective loans to and
extensions of credit to the Borrower thereunder and to induce the Lenders (and
their Affiliates) to enter into Swap
 

 
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Agreements with the Borrower and its Subsidiaries, the Borrower and, solely with
respect to itself and as applicable, each other Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
 
Section 4.01                Representations in Credit Agreement.  In the case of
each Grantor other than the Borrower, the representations and warranties set
forth in Article VII of the Credit Agreement as they relate to such Grantor or
to the Loan Documents to which such Grantor is a party, each of which is hereby
incorporated be reference, are true and correct, and the Administrative Agent
and the Lenders shall be entitled to rely on each of them, provided that each
reference in each such representation and warranty to the Borrower’s knowledge
shall, for the purposes of this Section 4.01, be deemed to be a reference to
such Grantor’s knowledge.
 
Section 4.02                Title; No Other Liens.  Except for the security
interest granted to the Administrative Agent for the ratable benefit of the
Secured Parties pursuant to this Agreement and the other Liens permitted to
exist on the Collateral by the Credit Agreement, such Grantor owns each item of
the Collateral free and clear of any and all Liens or claims of others.  No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Credit
Agreement, and such as shall be terminated substantially contemporaneous with
the consummation of the Transactions.  For the avoidance of doubt, it is
understood and agreed that any Grantor may, as part of its business, grant
licenses to third parties to use Intellectual Property owned or developed by a
Grantor.  For purposes of this Agreement and the other Loan Documents, such
licensing activity shall not constitute a “Lien” on such Intellectual
Property.  Each of the Administrative Agent and each Lender understands that any
such licenses may be exclusive to the applicable licensees, and such exclusivity
provisions may limit the ability of the Administrative Agent to utilize, sell,
lease or transfer the related Intellectual Property or otherwise realize value
from such Intellectual Property pursuant hereto.
 
Section 4.03                Perfected First Priority Liens.  The security
interests granted pursuant to this Agreement b) upon completion of the filings
and other actions specified on Schedule 3 (which, in the case of all filings and
other documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for such Grantor’s Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and c) are prior to all
other Liens on the Collateral in existence on the date hereof except for
unrecorded Liens permitted by the Credit Agreement which have priority over the
Liens on the Collateral by operation of law.
 
Section 4.04                Grantor Information.  On the date hereof, the
correct legal name of such Grantor, all names and trade names that such Grantor
has used in the last five years, such Grantor’s jurisdiction of organization and
each jurisdiction of organization of such Grantor over the last five years, such
Grantor’s organizational number (if any), taxpayer identification number, and
the location(s) of such Grantor’s chief executive office or sole place of
business or principal residence, as the case may be, over the last five years
are specified on Schedule 4.  Such Grantor has furnished to the Administrative
Agent a certified charter, certificate of
 

 
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incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof.
 
Section 4.05                Inventory and Equipment.  On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5, other than Inventory or Equipment of an inconsequential
value or nature or that is in transit to a purchaser or to one or more of the
locations listed in Schedule 5.
 
Section 4.06                Farm Products.  None of the Collateral constitutes,
or is the Proceeds of, Farm Products.
 
Section 4.07                Investment Property.
 
(a)           The Pledged Securities required to be pledged hereunder and under
the Credit Agreement by such Grantor are listed in Schedule 2.  The shares of
Pledged Securities pledged by such Grantor hereunder constitute all the issued
and outstanding shares of all classes of the Equity Interests of each Issuer
owned by such Grantor which is a Domestic Subsidiary of such Grantor and 66% of
the issued and outstanding shares of all classes of the Equity Interests of each
Issuer owned by such Grantor which is a Foreign Subsidiary.  All the shares of
the Pledged Securities have been duly and validly issued and are fully paid and
nonassessable; and such Grantor is the record and beneficial owner of, and has
good and marketable title to, the Investment Property pledged by it hereunder,
free of any and all Liens or options in favor of, or claims of, any other
Person, except the security interest created by this Agreement, and has rights
in or the power to transfer the Investment Property in which a Lien is granted
by it hereunder, free and clear of any Lien.
 
(b)           There are no restrictions on transfer (that have not been waived
or otherwise consented to) in the LLC Agreement governing any Pledged LLC
Interest or the Partnership Agreement governing any Pledged Partnership Interest
or any other agreement relating thereto which would limit or restrict:  (1) the
grant of a security interest in the Pledged LLC Interests or the Pledged
Partnership Interests, (2) the perfection of such security interest or (3) the
exercise of remedies in respect of such perfected security interest in the
Pledged LLC Interests or the Pledged Partnership Interests, in each case, as
contemplated by this Agreement.  Upon the exercise of remedies in respect of the
Pledged LLC Interests or the Pledged Partnership Interests as provided for
herein and otherwise as required by then applicable law, a transferee or
assignee of a membership interest or a partnership interest, as the case may be,
of such LLC or Partnership, as the case may be, shall become a member or
partner, as the case may be, of such LLC or Partnership, as the case may be,
entitled to participate in the management thereof to the extent immediately
theretofore held by the assignor or transferor, as the case may be, and, upon
the transfer of the entire interest of such Grantor, such Grantor shall cease to
be a member or partner, as the case may be.
 
(c)           Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles
 

 
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(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing.
 
Section 4.08                Receivables.
 
(a)           No amount payable to such Grantor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Administrative Agent.
 
(b)           None of the obligors on any Receivables is a Governmental
Authority, except as disclosed on Schedule 7.
 
(c)           The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
 
Section 4.09                Intellectual Property.
 
(a)           Schedule 6 lists all Intellectual Property owned by such Grantor
in its own name on the date hereof which consists of Patents, patent
applications and registered copyrights.
 
(b)           On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe the intellectual property rights of any other Person.
 
(c)           Except as set forth in Schedule 6 (and any implied warranties,
resulting from product sales or services or implied licenses arising in the
ordinary course of such Grantor’s business), on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
 
(d)           No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor’s rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
 
(e)           No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof ii) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor’s ownership interest
therein, or iii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
 
Section 4.10                Commercial Tort Claims.
 
(a)           On the date hereof, except to the extent listed in Schedule 3, no
Grantor has rights in any Commercial Tort Claim with an asserted value in excess
of $1,000,000.
 
(b)           Upon the filing of a financing statement covering any Commercial
Tort Claim referred to in Section 5.10 against such Grantor in the jurisdiction
specified in Schedule 3, the security interest granted in such Commercial Tort
Claim will constitute a valid perfected security interest in favor of the
Administrative Agent, for the ratable benefit of the Secured
 

 
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Parties, as collateral security for such Grantor’s Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase such Collateral from such Grantor, which security
interest shall be prior to all other Liens on such Collateral except for
unrecorded liens permitted by the Credit Agreement which have priority over the
Liens on such Collateral by operation of law.
 
Section 4.11                Benefit to the Guarantors.  The Borrower is a member
of an affiliated group of companies that includes such Grantor, and the Borrower
and the other Grantors are engaged in related businesses.  Such Grantor may
reasonably be expected to benefit, directly or indirectly, from the
Transactions; and such Grantor has determined that this Agreement is necessary
and convenient to the conduct, promotion and attainment of the business of such
Grantor.
 
ARTICLE V
Covenants
 
Each Grantor covenants and agrees with the Administrative Agent and the Lenders
that, from and after the date of this Agreement until the Borrower Obligations
shall have been indefeasibly paid in full in cash, no Letter of Credit shall be
outstanding and all of the Commitments shall have terminated:
 
Section 5.01               Covenants and Events of Default in Credit
Agreement.  Such Grantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, by it so that no Default or Event of Default is caused by the failure to
take such action or to refrain from taking such action by such Grantor.
 
Section 5.02                Delivery of Instruments, Certificated Securities and
Chattel Paper.  If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated Security
or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall
be immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.  Notwithstanding the foregoing, the Borrower shall not be
required to deliver such Instrument, Certificated Security or Chattel Paper to
the Administrative Agent as set forth in the immediately preceding sentence if
the value of an Instrument, Certificated Security or Chattel Paper is less than
$50,000 or if the aggregate value of all such Instruments, Certificated
Securities and Chattel Paper is less than $200,000.
 
Section 5.03                Maintenance of Insurance.  Each Grantor agrees to
maintain insurance on the Collateral as set forth in Section 8.07 of the Credit
Agreement.
 
Section 5.04               Payment of Obligations.  Each Grantor agrees to
comply with the provisions of Section 8.04 of the Credit Agreement with respect
to its payment obligations in the same manner as the Borrower is required
thereunder.
 
Section 5.05                Maintenance of Perfected Security Interest; Further
Documentation.
 
(a)           Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in Section 4.03
 

 
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and shall defend such security interest against the claims and demands of all
Persons whomsoever, subject to the rights of such Grantor under the Loan
Documents to dispose of the Collateral.
 
(b)           Such Grantor or the Borrower will furnish to the Administrative
Agent and the Lenders from time to time statements and schedules further
identifying and describing the assets and property of such Grantor and such
other reports in connection therewith, in each case as the Administrative Agent
may reasonably request, all in reasonable detail.
 
(c)           At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) delivering certificated securities, (ii)
filing any financing or continuation statements under the UCC (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (iii) in the case of Investment Property, Deposit Accounts,
Letter-of-Credit Rights and any other relevant Collateral, taking any actions
necessary to enable the Administrative Agent to obtain “control” (within the
meaning of the applicable Uniform Commercial Code) with respect thereto.
 
Section 5.06                Notices.  Such Grantor or the Borrower will advise
the Administrative Agent, in reasonable detail, of:
 
(a)           any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral of such Grantor
which would reasonably be expected to have an adverse affect on the ability of
the Administrative Agent to exercise any of its remedies hereunder; and
 
(b)           of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
 
Section 5.07                Investment Property.
 
(a)           If such Grantor shall become entitled to receive or shall receive
any certificate (including, without limitation, any certificate representing a
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Equity Interests of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares of the Pledged Securities, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Secured Parties,
hold the same in trust for the Secured Parties, segregated from other Property
of such Grantor, and deliver the same forthwith to the Administrative Agent in
the exact form received, duly indorsed by such Grantor to the Administrative
Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as
 

 
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additional collateral security for the Obligations.  Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Investment
Property or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Administrative Agent, be delivered to the Administrative Agent to
be held by it hereunder as additional collateral security for the
Obligations.  If any sums of money or property so paid or distributed in respect
of the Investment Property shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Administrative
Agent, hold such money or property in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
 
(b)           Without the prior written consent of the Administrative Agent,
such Grantor will not (i) unless otherwise expressly permitted hereby or under
the other Loan Documents, vote to enable, or take any other action to permit,
any Issuer to issue any Equity Interests of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any Equity Interests of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Investment Property or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Investment Property or Proceeds thereof, or any interest therein,
except for the security interests created by this Agreement or (iv) enter into
any agreement or undertaking restricting the right or ability of such Grantor or
the Administrative Agent to sell, assign or transfer any of the Investment
Property or Proceeds thereof except as expressly permitted pursuant to Section
9.16 of the Credit Agreement.
 
(c)           In the case of each Grantor that is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.07(a) with respect to the Investment Property issued by it and (iii) the terms
of Section 6.03(c) and Section 6.07 shall apply to it, mutatismutandis, with
respect to all actions that may be required of it pursuant to Section 6.03(c) or
Section 6.07 with respect to the Investment Property issued by it.  In the case
of any Issuer that is not a Grantor hereunder, such Grantor shall promptly cause
such Issuer to execute and deliver to the Administrative Agent an Acknowledgment
and Consent.
 
(d)           In the case of each Grantor that is a partner in a Partnership,
such Grantor hereby consents to the extent required by the applicable
Partnership Agreement to the pledge by each other Grantor, pursuant to the terms
hereof, of the Pledged Partnership Interests in such Partnership and to the
transfer of such Pledged Partnership Interests to the Administrative Agent or
its nominee and to the substitution of the Administrative Agent or its nominee
as a substituted partner in such Partnership with all the rights, powers and
duties of a general partner or a limited partner, as the case may be.  In the
case of each Grantor that is a member of an LLC, such
 

 
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Grantor hereby consents to the extent required by the applicable LLC Agreement
to the pledge by each other Grantor, pursuant to the terms hereof, of the
Pledged LLC Interests in such LLC and to the transfer of such Pledged LLC
Interests to the Administrative Agent or its nominee and to the substitution of
the Administrative Agent or its nominee as a substituted member of the LLC with
all the rights, powers and duties of a member of such LLC.
 
(e)           Such Grantor shall not agree to any amendment of a Partnership
Agreement or an LLC Agreement that (i) in any way adversely affects the
perfection of the security interest of the Administrative Agent in the Pledged
Partnership Interests or Pledged LLC Interests pledged by such Grantor hereunder
or (ii) causes any Partnership Agreement or LLC Agreement to include an election
to treat the membership interests or partnership interests of such Grantor as a
security under Section 8-103 of the UCC.
 
(f)           With respect to Equity Interests in certificated form, such
Grantor shall furnish to the Administrative Agent such stock or equity powers
and other instruments as may be required by the Administrative Agent to assure
the transferability of the Investment Property when and as often as may be
reasonably requested by the Administrative Agent.
 
(g)           The Pledged Securities set forth on Schedule 2 will at all times
constitute not less than 100% of the Equity Interests of each Issuer which is a
Domestic Subsidiary and not less than 66% of the Equity Interests of each Issuer
which is a Foreign Subsidiary thereof owned by such Grantor.  Such Grantor will
not permit any Issuer of any of the Pledged Securities set forth on Schedule 2
to issue any new shares of any class of Equity Interests of such Issuer without
the prior written consent of the Administrative Agent.
 
Section 5.08                Receivables.
 
(a)           Other than in the ordinary course of business consistent with its
past practice, such Grantor will not (i) grant any extension of the time of
payment of any Receivable, (ii) compromise or settle any Receivable for less
than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Receivable, (iv) allow any credit or discount
whatsoever on any Receivable or (v) amend, supplement or modify any Receivable
in any manner that could adversely affect the value thereof.
 
(b)           Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
 
Section 5.09                Intellectual Property.
 
(a)           Such Grantor (either itself or through licensees) will (i)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force free
from any claim of abandonment for non-use, in each case if such Grantor deems
that such use is appropriate under the circumstances, (ii) maintain as in the
past the quality of products and services offered under such Trademark, (iii)
use such Trademark with the appropriate notice of registration and all other
notices and legends required of such Grantor by applicable Governmental
Requirements, (iv) not knowingly adopt or use any mark
 

 
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which is confusingly similar or a colorable imitation of such Trademark unless
the Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such mark pursuant to this Agreement and
(v) not (and not permit any licensee or sublicensee thereof to) knowingly do any
act or omit to do any act whereby such Trademark may become invalidated or
impaired in any way.
 
(b)           Such Grantor (either itself or through licensees) will not
knowingly do any act, or omit to do any act, whereby any material Patent may,
after giving immediately effect to such act or omission, become forfeited,
abandoned or dedicated to the public.
 
(c)           Such Grantor (either itself or through licensees) (i) will employ
each material Copyright, if such Grantor deems that such employment is
appropriate under the circumstances, and (ii) will not (and will not permit any
licensee or sublicensee thereof to) knowingly do any act or omit to do any act
whereby any material portion of the Copyrights may, after giving immediate
effect to such act or omission, become invalidated or otherwise impaired.  Such
Grantor will not (either itself or through licensees) knowingly, do any act
whereby any material portion of the Copyrights may fall into the public domain.
 
(d)           Such Grantor (either itself or through licensees) will not
knowingly use any material Intellectual Property to infringe the intellectual
property rights of any other Person.
 
(e)           Such Grantor or the Borrower will notify the Administrative Agent
and the Lenders as soon as reasonably practicable after it knows, or a
Responsible Officer has reason to know, that any application or registration
relating to any material Intellectual Property may become forfeited, abandoned
or dedicated to the public, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in any country)
regarding such Grantor’s ownership of, or the validity of, any material
Intellectual Property or such Grantor’s right to register the same or to own and
maintain the same.
 
(f)           Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent in the certificate it delivers pursuant to
Section 8.01(c) of the Credit Agreement which covers the quarterly period in
which such filing occurred.  Upon request of the Administrative Agent, such
Grantor shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Administrative Agent may reasonably
request to evidence the Administrative Agent’s and the Lenders’ security
interest in any Copyright, Patent or Trademark and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.
 
(g)           Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant
 

 
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registration) and to maintain each registration of the material Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.
 
(h)           In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
 
Section 5.10                Commercial Tort Claims.  If such Grantor shall
obtain an interest in any Commercial Tort Claim with an asserted value in excess
of $1,000,000, such Grantor shall within 30 days of obtaining such interest sign
and deliver documentation acceptable to the Administrative Agent that grants a
security interest under the terms and provisions of this Agreement in and to
such Commercial Tort Claim.
 

ARTICLE VI
Remedial Provisions
 
Section 6.01                Certain Matters Relating to Receivables.  At any
time after the occurrence and the continuation of an Event of Default:
 
(a)           The Administrative Agent shall have the right to make test
verifications of the Receivables in any manner and through any medium that it
reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications.  At any time and from time to time, upon the
Administrative Agent’s request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.
 
(b)           The Administrative Agent hereby authorizes each Grantor to collect
such Grantor’s Receivables, subject to the Administrative Agent’s direction and
control, and the Administrative Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of
Default.  If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.05, and (ii) until so
turned over, shall be held by such Grantor in trust for the Administrative Agent
and the Lenders, segregated from other funds of such Grantor.  Each such deposit
of Proceeds of
 

 
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Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
 
(c)           At the Administrative Agent’s request, each Grantor shall deliver
to the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
 
Section 6.02                Communications with Obligors; Grantors Remain
Liable.
 
(a)            The Administrative Agent at any time after the occurrence and
during the continuance of an Event of Default in its own name or in the name of
others may at any time communicate with obligors under the Receivables to verify
with them to the Administrative Agent’s satisfaction the existence, amount and
terms of any Receivables.
 
(b)           Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Administrative Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Administrative Agent.
 
(c)           Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto.  Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any Receivable (or any agreement giving rise thereto) or Contract by reason of
or arising out of this Agreement or the receipt by the Administrative Agent or
any Lender of any payment relating thereto, nor shall the Administrative Agent
or any Lender be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
 
Section 6.03                Pledged Securities.
 
(a)           Unless an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have given notice to the relevant Grantor of
the Administrative Agent’s intent to exercise its corresponding rights pursuant
to Section 6.03(b), each Grantor shall be permitted to receive all cash
dividends paid in respect of the Pledged Securities and all payments made in
respect of the Pledged Notes, in each case paid in the normal course of business
of the relevant Issuer and consistent with past practice, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate or
other organizational rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate or other organizational right
exercised or other action taken which, in the Administrative Agent’s reasonable
judgment, would impair the Collateral or which would be inconsistent with or
result
 

 
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in any violation of any provision of the Credit Agreement, this Agreement or any
other Loan Document.
 
(b)           If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, during the pendancy of such Event of Default,
(i) the Administrative Agent shall have the right to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Investment Property
and make application thereof to the Obligations in such order as the
Administrative Agent may determine, and (ii) any or all of the Investment
Property shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter and during
the pendancy of such Default exercise (a) all voting, corporate and other rights
pertaining to such Investment Property at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (b) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
other organizational structure of any Issuer, or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining
to such Investment Property, and in connection therewith, the right to deposit
and deliver any and all of the Investment Property with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
 
(c)           Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and is continuing and (b) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Administrative Agent.
 
Section 6.04                Proceeds to be Turned Over to Administrative
Agent.  In addition to the rights of the Administrative Agent and the Lenders
specified in Section 6.01 with respect to payments of Receivables, if an Event
of Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Grantor, and shall, forthwith upon receipt by such Grantor,
be turned over to the Administrative Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required).  All such Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in a Collateral Account maintained
under its sole dominion and control.  All such Proceeds while held by the
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Administrative Agent and the
 

 
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Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.05.
 
Section 6.05               Application of Proceeds.  At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Administrative
Agent’s election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Article II, in payment of the Obligations
in accordance with Section 10.02(c) of the Credit Agreement.
 
Section 6.06                Code and Other Remedies.
 
(a)           If an Event of Default shall occur and be continuing, the
Administrative Agent, on behalf of the Secured Parties, may exercise, in
addition to all other rights and remedies granted to them in this Agreement, the
other Loan Documents and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the UCC or any other applicable law or otherwise available at law or
equity.  Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of any Secured Party or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk.  Any
Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and
released.  Each Grantor further agrees, at the Administrative Agent’s request,
to assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere.  Any such sale or transfer by the
Administrative Agent either to itself or to any other Person shall be absolutely
free from any claim of right by any Grantor, including any equity or right of
redemption, stay or appraisal which any Grantor has or may have under any rule
of law, regulation or statute now existing or hereafter adopted (and each
Grantor hereby waives any rights it may have in respect thereof).  Upon any such
sale or transfer, the Administrative Agent shall have the right to deliver,
assign and transfer to the purchaser or transferee thereof the Collateral so
sold or transferred.  The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 6.06, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Secured Parties hereunder, including, without limitation, reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Obligations,
in accordance with Section 10.02(c) of the Credit Agreement, and only after such
application and after the payment by the Administrative Agent of any other
amount required by
 

 
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any provision of law, including, without limitation, Section 9-615(a)(3) of the
UCC, need the Administrative Agent account for the surplus, if any, to any
Grantor.  To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Secured Party arising out of the exercise by them of any rights hereunder
except to the extent caused by the gross negligence or willful misconduct of the
Administrative Agent or such Secured Party or their respective agents.  If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.
 
(b)           In the event that the Administrative Agent elects not to sell the
Collateral, the Administrative Agent retains its rights to dispose of or utilize
the Collateral or any part or parts thereof in any manner authorized or
permitted by law or in equity, and to apply the proceeds of the same towards
payment of the Obligations.  Each and every method of disposition of the
Collateral described in this Agreement shall constitute disposition in a
commercially reasonable manner.  Without limitation of the foregoing, any
disposition involving three (3) or more bidders that are “accredited investors”
(within the meaning of the Securities Act) shall constitute disposition in a
commercially reasonable manner.
 
(c)           The Administrative Agent may appoint any Person as agent to
perform any act or acts necessary or incident to any sale or transfer of the
Collateral.
 
Section 6.07                Registration Rights.
 
(a)           If the Administrative Agent shall determine to exercise its right
to sell any or all of the Pledged Securities pursuant to Section 6.06, and if in
the opinion of the Administrative Agent it is necessary or advisable to have the
Pledged Securities, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the relevant Grantor will use commercially
reasonable efforts to cause the Issuer thereof to (i) execute and deliver, and
cause the directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the reasonable opinion of the Administrative Agent, necessary or
advisable to register the Pledged Securities, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii) use its commercially
reasonable efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Securities, or that portion thereof
to be sold and (iii) use its commercially reasonable efforts to cause the Issuer
to make all amendments thereto and/or to the related prospectus which, in the
opinion of the Administrative Agent, are necessary or advisable to enable it to
realize upon such Collateral, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto.  Each Grantor agrees to use its commercially
reasonable efforts to cause such Issuer to comply with the provisions of the
securities or “Blue Sky” laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
 

 
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(b)           Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Securities, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, or  may determine that a public sale is
impracticable or not commercially reasonable, and, accordingly, may resort to
one or more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale
thereof.  Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner.  The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Securities for the period of time necessary to permit the Issuer thereof
to register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
 
(c)           Each Grantor agrees to use its commercially reasonable efforts to
do or cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Pledged Securities pursuant to this
Section 6.07 valid and binding and in compliance with any and all other
applicable Governmental Requirements.  Each Grantor further agrees that a breach
of any of the covenants contained in this Section 6.07 will cause irreparable
injury to the Secured Parties, that the Secured Parties have no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 6.07 shall be specifically enforceable
against such Grantor, and, to the maximum extent permitted by applicable law,
such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.
 
Section 6.08               Waiver; Deficiency.  To the maximum extent permitted
by applicable law, each Grantor waives and agrees not to assert any rights or
privileges which it may acquire under the UCC.  Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Secured Party to collect such deficiency.
 
Section 6.09               Non-Judicial Enforcement.  The Administrative Agent
may enforce its rights hereunder without prior judicial process or judicial
hearing, and to the extent permitted by law, each Grantor expressly waives any
and all legal rights which might otherwise require the Administrative Agent to
enforce its rights by judicial process.
 
ARTICLE VII
The Administrative Agent
 
Section 7.01                Administrative Agent’s Appointment as
Attorney-in-Fact, Etc.
 
(a)           Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of
 

 
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such Grantor and in the name of such Grantor or in its own name, for the purpose
of carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:
 
(i)           in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Receivable or Contract
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Receivable or Contract or with respect to any
other Collateral whenever payable;
 
(ii)          in the case of any Intellectual Property, execute and deliver, and
have recorded, any and all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent’s and the
Secured Parties’ security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;
 
(iii)         pay or discharge Taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement or any other Loan Document and pay all or any part of
the premiums therefor and the costs thereof;
 
(iv)         execute, in connection with any sale provided for in Section 6.06
or Section 6.07, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
 
(v)           (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Administrative Agent or as the Administrative Agent shall
direct; (B) ask or demand for, collect, and receive payment of and receipt for,
any and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) in the name of such Grantor, or in
its own name, or otherwise, commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (E) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (F) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem appropriate;
(G) assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains), throughout
the world for such term on terms, on such conditions, and in such manner, as the
Administrative Agent shall in its sole discretion determine; and (H) generally,
sell, transfer, pledge and make any
 

 
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agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the Secured Parties’ security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
 
Anything in this Section 7.01(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.01(a) unless an Event of Default
shall have occurred and be continuing.
 
(b)           If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
 
(c)           The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.01, together with interest
thereon at the post-default rate specified in Section 3.02(c) of the Credit
Agreement, but in no event to exceed the Highest Lawful Rate, from the date of
payment by the Administrative Agent to the date reimbursed by the relevant
Grantor, shall be payable by such Grantor to the Administrative Agent on demand.
 
(d)           Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof.  All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
 
Section 7.02               Duty of Administrative Agent.  The Administrative
Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar Property for its own account, and the Administrative
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which comparable secured parties accord
comparable collateral.  Neither the Administrative Agent, any Secured Party nor
any of their Related Parties shall be liable for failure to demand, collect or
realize upon any 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 any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.  The powers
conferred on the Administrative Agent and the Secured Parties hereunder are
solely to protect the Administrative Agent’s and the Secured Parties’ interests
in the Collateral and shall not impose any duty upon the Administrative Agent or
any Secured Party to exercise any such powers.  The Administrative Agent and the
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
Related Parties shall be responsible to any Grantor for any act or failure to
act hereunder, except for their own gross negligence or willful misconduct.  To
the fullest extent permitted by applicable law, the Administrative Agent shall
be under no
 

 
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duty whatsoever to make or give any presentment, notice of dishonor, protest,
demand for performance, notice of non-performance, notice of intent to
accelerate, notice of acceleration, or other notice or demand in connection with
any Collateral or the Obligations, or to take any steps necessary to preserve
any rights against any Grantor or other Person or ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not it has or is deemed to have
knowledge of such matters.  Each Grantor, to the extent permitted by applicable
law, waives any right of marshaling in respect of any and all Collateral, and
waives any right to require the Administrative Agent or any Secured Party to
proceed against any Grantor or other Person, exhaust any Collateral or enforce
any other remedy which the Administrative Agent or any Secured Party now has or
may hereafter have against any Grantor or other Person.
 
Section 7.03               Execution of Financing Statements.  Pursuant to the
UCC and any other applicable law, each Grantor authorizes the Administrative
Agent to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral without the signature of
such Grantor in such form and in such offices as the Administrative Agent
determines appropriate to perfect the security interests of the Administrative
Agent under this Agreement.  A photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any
jurisdiction.  Each Grantor authorizes the Administrative Agent to use the
collateral description “all personal property” or “all assets” in any such
financing statements.  Each Grantor hereby ratifies and authorizes the filing by
the Administrative Agent of any financing statement with respect to the
Collateral made prior to the date hereof.
 
Section 7.04               Authority of Administrative Agent.  Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantors, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
 
ARTICLE VIII
Subordination of Indebtedness
 
Section 8.01               Subordination of All Grantor Claims.  As used herein,
the term “Grantor Claims” shall mean all debts and obligations of the Borrower
or any other Grantor to any other Grantor, whether such debts and obligations
now exist or are hereafter incurred or arise, or whether the obligation of the
debtor thereon be direct, contingent, primary, secondary, several, joint and
several, or otherwise, and irrespective of whether such debts or obligations be
evidenced by note, contract, open account, or otherwise, and irrespective of the
Person or Persons in whose favor such debts or obligations may, at their
inception, have been, or may hereafter be created, or the manner in which they
have been or may hereafter be acquired by.
 

 
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After and during the continuation of an Event of Default, no Grantor shall
receive or collect, directly or indirectly, from any obligor in respect thereof
any amount upon the Grantor Claims.
 
Section 8.02               Claims in Bankruptcy.  In the event of receivership,
bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency
proceedings involving any Grantor, the Administrative Agent on behalf of the
Administrative Agent and the Secured Parties shall have the right to prove their
claim in any such proceeding, so as to establish their rights hereunder and
receive directly from the receiver, trustee or other court custodian, dividends
and payments which would otherwise be payable upon Grantor Claims.  Each Grantor
hereby assigns such dividends and payments to the Administrative Agent for the
benefit of the Administrative Agent and the Secured Parties for application
against the Borrower Obligations as provided under Section 10.02(c) of the
Credit Agreement.  Should any Agent or Secured Party receive, for application
upon the Obligations, any such dividend or payment which is otherwise payable to
any Grantor, and which, as between such Grantors, shall constitute a credit upon
the Grantor Claims, then upon payment in full in cash of the Borrower
Obligations, the expiration of all Letters of Credit outstanding under the
Credit Agreement and the termination of all of the Commitments, the intended
recipient shall become subrogated to the rights of the Administrative Agent and
the Secured Parties to the extent that such payments to the Administrative Agent
and the Secured Parties on the Grantor Claims have contributed toward the
liquidation of the Obligations, and such subrogation shall be with respect to
that proportion of the Obligations which would have been unpaid if the
Administrative Agent and the Secured Parties had not received dividends or
payments upon the Grantor Claims.
 
Section 8.03                Payments Held in Trust.  In the event that,
notwithstanding Section 8.01 and Section 8.02, any Grantor should receive any
funds, payments, claims or distributions which is prohibited by such Sections,
then it agrees: (a) to hold in trust for the Administrative Agent and the
Secured Parties an amount equal to the amount of all funds, payments, claims or
distributions so received and (b) that it shall have absolutely no dominion over
the amount of such funds, payments, claims or distributions except to pay them
promptly to the Administrative Agent, for the benefit of the Secured Parties;
and each Grantor covenants promptly to pay the same to the Administrative Agent.
 
Section 8.04               Liens Subordinate.  Each Grantor agrees that, until
the Borrower Obligations are paid in full in cash, no Letter of Credit shall be
outstanding and the termination of all of the Commitments, any Liens securing
payment of the Grantor Claims shall be and remain inferior and subordinate to
any Liens securing payment of the Obligations, regardless of whether such
encumbrances in favor of such Grantor, the Administrative Agent or any Secured
Party presently exist or are hereafter created or attach.  Without the prior
written consent of the Administrative Agent, no Grantor, during the period in
which any of the Borrower Obligations are outstanding or the Commitments are in
effect, shall (a) exercise or enforce any creditor’s right it may have against
any debtor in respect of the Grantor Claims or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor’s relief or
insolvency proceeding) to enforce any Lien held by it.
 

 
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Section 8.05                Notation of Records.  Upon the request of the
Administrative Agent, all promissory notes and all accounts receivable ledgers
or other evidence of the Grantor Claims accepted by or held by any Grantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Agreement.
 
ARTICLE IX
Miscellaneous
 
Section 9.01                No Waiver by Course of Conduct; Cumulative
Remedies.  Neither the Administrative Agent nor any Secured Party shall by any
act (except by a written instrument pursuant to Section 9.04), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default.  No failure
to exercise, nor any delay in exercising, on the part of the Administrative
Agent or any Secured Party, and no course of dealing with respect to, any right,
power or privilege hereunder, or any abandonment or discontinuance of steps to
enforce such right, power or privilege, shall operate as a waiver thereof.  No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  A waiver by the Administrative Agent or any Secured
Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent or such
Secured Party would otherwise have on any future occasion.  The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law or equity.
 
Section 9.02               Notices.  All notices and other communications
provided for herein shall be given in the manner and subject to the terms of
Section 12.01 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1.
 
Section 9.03                Enforcement Expenses; Indemnities.
 
(a)           Each Guarantor agrees to pay or reimburse each Secured Party and
the Administrative Agent for all its reasonable costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Article II or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the reasonable fees and disbursements of counsel to each Secured
Party and of counsel to the Administrative Agent.
 
(b)           Each Guarantor agrees to pay, and to save the Administrative Agent
and the Secured Parties harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all Other Taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
 
(c)           Each Guarantor agrees to pay, and to save the Administrative Agent
and the Secured Parties harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this
 

 
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Agreement to the extent the Borrower would be required to do so pursuant to
Section 12.03 of the Credit Agreement.
 
(d)           The agreements in this Section 9.03 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
 
Section 9.04                Amendments in Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 12.02 of the Credit Agreement.
 
Section 9.05                Successors and Assigns.  The provisions of this
Agreement shall be binding upon the Grantors and their successors and assigns
and shall inure to the benefit of the Administrative Agent and the Secured
Parties and their respective successors and permitted assigns; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent and
the Majority Lenders, and any such purported assignment, transfer or delegation
shall be null and void.
 
Section 9.06                Survival; Revival; Reinstatement.
 
(a)           All covenants, agreements, representations and warranties made by
any Grantor herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document to
which it is a party shall be considered to have been relied upon by the
Administrative Agent, the other Agents, the Issuing Bank and the Lenders and
shall survive the execution and delivery of this Agreement and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the other Agents, the Issuing Bank or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under the Credit Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated.  The provisions of Section 9.03 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement, any other Loan Document or any provision hereof or thereof.
 
(b)           To the extent that any payments on the Obligations or proceeds of
any Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Administrative Agent’s and the Secured Parties’ Liens, security interests,
rights, powers and remedies under this Agreement and each other Loan Document
shall continue in full force and effect.  In such event, each Loan Document
shall be automatically reinstated and the Borrower
 

 
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shall take such action as may be reasonably requested by the Administrative
Agent and the Secured Parties to effect such reinstatement.
 
Section 9.07                Counterparts; Integration; Effectiveness.
 
(a)           This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.
 
(b)           This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
thereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof and thereof.  THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS (OTHER THAN THE LETTERS OF CREDIT AND THE LETTER OF
CREDIT AGREEMENTS) REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
THERETO AND 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.
 
(c)           This Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto, the Lenders and their
respective successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement.
 
Section 9.08                Severability.  Any provision of this Agreement or
any other Loan Document held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof or thereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
 
Section 9.09                Set-Off.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, without notice to such Person or any other
Grantor, any such notice being expressly waived by each Grantor, to the fullest
extent permitted by law, to set off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness, claims or obligations (of
whatsoever kind, including, without limitations obligations under Swap
Agreements), in any currency, whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
Affiliate to or for the credit or the account of any Grantor against any of and
all the obligations and liabilities of the Grantor owed to such Lender now or
hereafter existing under this Agreement or any other Loan Document, irrespective
of whether or not such Lender shall have made any demand under this Agreement or
any other Loan Document and although such
 

 
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obligations may be unmatured.  The rights of each Lender under this Section 9.09
are in addition to other rights and remedies (including other rights of setoff)
which such Lender or its Affiliates may have.
 
Section 9.10                Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial.
 
(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES
FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
LOCATED.  CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN
REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY
TO THIS AGREEMENT.
 
(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF HARRIS COUNTY IN THE
STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF
TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY
ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, 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
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.  THIS SUBMISSION TO
JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING
JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.
 
(c)           EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE
ADDRESS SPECIFIED IN SECTION 12.01 OF THE CREDIT AGREEMENT OR SUCH OTHER ADDRESS
AS IS SPECIFIED PURSUANT TO SECTION 12.01 OF THE CREDIT AGREEMENT (OR ITS
ASSIGNMENT AND ASSUMPTION) OR SCHEDULE 1 HERETO, AS APPLICABLE, SUCH SERVICE TO
BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL
AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.
 
(d)           EACH PARTY HEREBY (1) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS
 

 
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AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (2)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (3) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE, OR
AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND (4) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 9.10.
 
Section 9.11                Headings.  Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
 
Section 9.12                Acknowledgments.  Each Grantor hereby acknowledges
that:
 
(a)           it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
 
(b)           neither the Administrative Agent nor any Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
 
(c)           no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.
 
(d)           Each of the parties hereto specifically agrees that it has a duty
to read this Agreement, the Security Instruments and the other Loan Documents
and agrees that it is charged with notice and knowledge of the terms of this
Agreement, the Security Instruments and the other Loan Documents; that it has in
fact read this Agreement, the Security Instruments and the other Loan Documents
and is fully informed and has full notice and knowledge of the terms, conditions
and effects thereof; that it has been represented by independent legal counsel
of its choice throughout the negotiations preceding its execution of this
Agreement and the Security Instruments; and has received the advice of its
attorney in entering into this Agreement and the Security Instruments; and that
it recognizes that certain of the terms of this Agreement and the Security
Instruments result in one party assuming the liability inherent in some aspects
of the transaction and relieving the other party of its responsibility for such
liability.  EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE
VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND
THE SECURITY INSTRUMENTS ON THE BASIS THAT THE
 

 
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PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
“CONSPICUOUS.”
 
Section 9.13                Additional Grantors and Additional Pledged
Securities.  Each Subsidiary of the Borrower that is required to become a party
to this Agreement pursuant to Section 8.14 of the Credit Agreement shall become
a party hereto as a Grantor for all purposes of this Agreement upon execution
and delivery by such Subsidiary of an Assumption Agreement and shall thereafter
have the same rights, benefits and obligations as a Grantor party hereto on the
date hereof.  Each Grantor that is required to pledge additional Equity
Interests pursuant to the Credit Agreement shall execute and deliver a
Supplement.
 
Section 9.14                Releases.
 
(a)           Release Upon Payment in Full.  The grant of the security interest
hereunder, all other grants of interests, set off and other Liens hereunder, and
all guarantees provided for herein, the security interest granted hereunder, all
other interest, set offs and other Liens granted hereunder, and all guarantees
provided for herein, and all Lien rights, powers and interests and guarantee
benefits with respect thereto shall automatically terminate and be null and void
immediately upon the date that the Borrower Obligations (other than Borrower
Obligations in respect of Secured Swap Agreements and Indebtedness consisting of
payment obligations that are provided under each Loan Document as surviving the
termination of any Loan Document or other transactions contemplated thereby, or
words of similar import) shall have been indefeasibly paid in full in cash, no
Letter of Credit shall be outstanding, and all of the Commitments shall have
terminated, and the Administrative Agent, at the written request and expense of
the Borrower, will promptly take all steps and actions requested by the Borrower
to evidence and more fully effect the foregoing termination, including the
release, reassignment and transfer, without recourse or warranty, of the
property theretofore constituting the Collateral to the Grantors and the
declaration of all such guarantees and this Agreement to be of no further force
or effect.
 
(b)           Partial Releases.  If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Grantor in a transaction permitted
by the Credit Agreement, then immediately upon the occurrence of any such
disposition, all Liens and other rights with respect thereto, shall
automatically terminate and be null and void, and the Administrative Agent, at
the request and sole expense of such Grantor, shall promptly execute and deliver
to such Grantor all releases or other documents deemed reasonably necessary or
desirable by the Borrower to evidence the release of the Liens created hereby on
such Collateral.  If all the Equity Interests of a Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement, then immediately upon the occurrence of such disposition, such
Guarantor automatically shall be released from its obligations hereunder, and
the Liens and other rights created hereunder in all property of such Guarantor
shall automatically terminate and be null and void; and at the request and sole
expense of the Borrower, the Administrative Agent shall promptly execute and
deliver to or at the request of the Borrower all releases and other documents
reasonable necessary or desirable to release such obligations, Liens and other
rights; provided that the Borrower shall have delivered to the Administrative
Agent, at least fifteen Business Days prior to the date of the requested
releases and documents, a written request of a Responsible Officer for release
identifying the relevant Guarantor and the terms of the sale or
 

 
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other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a certification by the Borrower
stating that such transaction is in compliance with the Credit Agreement and the
other Loan Documents.
 
(c)           Retention in Satisfaction.  Except as may be expressly applicable
pursuant to Section 9.620 of the UCC, no action taken or omission to act by the
Administrative Agent or the Secured Parties hereunder, including, without
limitation, any exercise of voting or consensual rights or any other action
taken or inaction, shall be deemed to constitute a retention of the Collateral
in satisfaction of the Obligations or otherwise to be in full satisfaction of
the Obligations, and the Obligations shall remain in full force and effect,
until the Administrative Agent and the Secured Parties shall have applied
payments (including, without limitation, collections from Collateral) towards
the Obligations in the full amount then outstanding or until such subsequent
time as is provided in Section 9.14(a).
 
Section 9.15                Acceptance.  Each Grantor hereby expressly waives
notice of acceptance of this Agreement, acceptance on the part of the
Administrative Agent and the Secured Parties being conclusively presumed by
their request for this Agreement and delivery of the same to the Administrative
Agent.
 
[Remainder of page intentionally left blank; signature page follows]
 

 
 

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IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and
Collateral Agreement to be duly executed and delivered as of the date first
above written.
 

 

BORROWER: REX ENERGY CORPORATION           
By:
/s/ Benjamin W. Hulburt
     
Benjamin W. Hulburt, Chief Executive Officer
 

           

GRANTORS: REX ENERGY I, LLC     REX ENERGY OPERATING CORP.     PENN TEX ENERGY,
INC.     PENNTEX RESOURCES ILLINOIS, INC.     REX ENERGY IV, LLC           
By:
/s/ Benjamin W. Hulburt
     
Benjamin W. Hulburt, Chief Executive Officer
 

 
 

  PENNTEX RESOURCES, L.P.           By:  Penn Tex Energy, Inc., its general
partner           
By:
/s/ Benjamin W. Hulburt
     
Benjamin W. Hulburt, Chief Executive Officer
 

 
 

 
 

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Acknowledged and Agreed to as
of the date hereof by:

ADMINISTRATIVE AGENT: KEYBANK NATIONAL ASSOCIATION,     as Administrative Agent
         
By:
/s/ Thomas Rajan
     
Thomas Rajan
      Director  

 
 

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SCHEDULE 1
NOTICE ADDRESSES OF GRANTORS

 
Grantor
Notice Address
   
Rex Energy I, LLC
Rex Energy I, LLC
c/o Rex Energy Corporation
1975 Waddle Road
State College, PA 16803
Attn: Thomas Stabley, Chief Financial Officer
Fax No. 814.278.7286
 
Rex Energy Operating Corp.
Rex Energy Operating Corp.
c/o Rex Energy Corporation
1975 Waddle Road
State College, PA 16803
Attn: Thomas Stabley, Chief Financial Officer
Fax No. 814.278.7286
 
Rex Energy IV, LLC
Rex Energy IV, LLC
c/o Rex Energy Corporation
1975 Waddle Road
State College, PA 16803
Attn: Thomas Stabley, Chief Financial Officer
Fax No. 814.278.7286
 
PennTex Resources Illinois, Inc.
PennTex Resources Illinois, Inc.
c/o Rex Energy Corporation
1975 Waddle Road
State College, PA 16803
Attn: Thomas Stabley, Chief Financial Officer
Fax No. 814.278.7286
 
Penn Tex Energy, Inc.
Penn Tex Energy, Inc.
c/o Rex Energy Corporation
1975 Waddle Road
State College, PA 16803
Attn: Thomas Stabley, Chief Financial Officer
Fax No. 814.278.7286
 
PennTex Resources, L.P.
PennTex Resources, L.P.
c/o Rex Energy Corporation
1975 Waddle Road
State College, PA 16803
Attn: Thomas Stabley, Chief Financial Officer
Fax No. 814.278.7286
 

 
 

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SCHEDULE 2
INVESTMENT PROPERTY

 
Description of Pledged Securities

 
Owner/Grantor
 
Issuer
Percentage
Owned
Percentage
Pledged
Class of
Stock or other Equity Interest
No. of
Shares
Certificate
No.
             
Rex Energy Corporation
Rex Energy I, LLC
100%
100%
Membership Interest
Not Applicable
Not Applicable
             
Rex Energy Corporation
Rex Energy Operating Corp.
100%
100%
Common Stock
100
3
             
Rex Energy Corporation
Penn Tex Energy, Inc.
100%
100%
Common Stock
100
2
             
Rex Energy Corporation
PennTex Resources, L.P.
99%
100%
Limited Partnership Interest
Not Applicable
Not Applicable
             
Rex Energy Corporation
PennTex Resources Illinois, Inc.
100%
100%
Common Stock
1,000
7
             
Rex Energy Corporation
Rex Energy IV, LLC
100%
100%
Membership Interest
Not Applicable
Not Applicable
             
Rex Energy I, LLC
Rex Energy Marketing, LLC
100%
100%
Membership Interest
Not Applicable
Not Applicable
             
Penn Tex Energy, Inc.
PennTex Resources, L.P.
1%
100%
General Partner Interest
Not Applicable
Not Applicable

Description of Pledged Notes
 
None.
 

 
 

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SCHEDULE 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS

 
Uniform Commercial Code Filings
 
1.
Filing of UCC-1 Financing Statements with respect to the Collateral with the
Secretary of State of the State of Delaware.

 
2.           Filing of UCC-1 Financing Statements with respect to the Collateral
with the Secretary ofState of the State of Texas.
 
Patent and Trademark Filings
 
1.
Filing of UCC-1 Financing Statements with respect to the trademarks of Rex
Energy Operating Corp. with the Secretary of State of the State of Delaware.

 
Actions with respect to Pledged Securities
 
1.
Delivery to the Administrative Agent of all Pledged Securities consisting of
certificated securities, in each case properly endorsed for transfer or in
blank.

 
Description of Commercial Tort Claims With An Asserted Value in Excess of
$1,000,000
 
None.
 

 
 

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SCHEDULE 4
 
JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
 
Borrower:
 
Legal Name/Address
Trade Names Used in Past 5 Years
Current Jurisdiction of Organization
Jurisdiction of Organizations in Past 5 Years
Organizational No.
Taxpayer Identification No.
Chief Executive Office or Sole Place of Business over the last 5 years
Rex Energy Corporation
1975 Waddle Road
State College, PA 16803
 
 
None
Delaware
Not Applicable
4313846
20-8814402
1975 Waddle Road
State College, PA 16803

Grantors:

Legal Name/Address
Trade Names Used in Past 5 Years
Current Jurisdiction of Organization
Jurisdiction of Organizations in Past 5 Years
Organizational No.
Taxpayer Identification No.
Chief Executive Office or Sole Place of Business over the last 5 years
Rex Energy I, LLC
1975 Waddle Road
State College, PA 16803
 
 
None
Delaware
Not Applicable
4335969
20-8909799
1975 Waddle Road
State College, PA 16803
Rex Energy Operating Corp.
1975 Waddle Road
State College, PA 16803
 
None
Delaware
Not Applicable
3865470
20-2120390
1975 Waddle Road
State College, PA 16803
 
1965 Waddle Road
State College, PA
16803
 
Rex Energy IV, LLC
1975 Waddle Road
State College, PA 16803
 
 
None
Delaware
Not Applicable
4219136
20-5549688
1975 Waddle Road
State College, PA 16803
 
Route 1, Box 197, Bridgeport, Illinois 62417
 
Highway 250, P.O. Box 318, Bridgeport, Illinois 62417
 
PennTex Resources Illinois, Inc.
1975 Waddle Road
State College, PA 16803
 
ERG Illinois, Inc.
Delaware
Not Applicable
3757111
20-0660609
1975 Waddle Road
State College, PA 16803
 
1965 Waddle Road
State College, PA
16803
 
1100 Louisiana, Suite 2650, Houston, Texas
77002
 
Penn Tex Energy, Inc.
1975 Waddle Road
State College, PA 16803
 
 
 
None
Delaware
Not Applicable
2822522
23-2933817
1975 Waddle Road
State College, PA 16803
 
1965 Waddle Road
State College, PA
16803
 
PennTex Resources, L.P.
1975 Waddle Road
State College, PA 16803
 
None
Texas
Not Applicable
10295910
23-2933816
1975 Waddle Road
State College, PA 16803
 
1965 Waddle Road
State College, PA
16803
 

 

 
 

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SCHEDULE 5
LOCATIONS OF INVENTORY AND EQUIPMENT

Grantor
Locations
Rex Energy I, LLC
1.  1975 Waddle Road, State College, Pennsylvania 16803
 
2.  400 Southpointe Blvd, Suite 410, Canonsburg, Pennsylvania 15317
 
3.  500 West Texas Avenue, Suite 940, Midland, Texas 79701
 
4.  Route 1, Box 197, Bridgeport, Illinois 62417
 
5.  6555 Griffin Road, New Harmony, Indiana 47631
 
   
Rex Energy Operating Corp.
1.  1975 Waddle Road, State College, Pennsylvania 16803
 
2.  400 Southpointe Blvd, Suite 410, Canonsburg, Pennsylvania 15317
 
3.  500 West Texas Avenue, Suite 940, Midland, Texas 79701
 
4.  Route 1, Box 197, Bridgeport, Illinois 62417
 
5.  6555 Griffin Road, New Harmony, Indiana 47631
 
   
Rex Energy IV, LLC
1.  1975 Waddle Road, State College, Pennsylvania 16803
 
2.  Route 1, Box 197, Bridgeport, Illinois 62417
 
 
   
PennTex Resources Illinois, Inc.
1.  1975 Waddle Road, State College, Pennsylvania 16803
 
2.  Route 1, Box 197, Bridgeport, Illinois 62417
 
 
   
Penn Tex Energy, Inc.
1.  1975 Waddle Road, State College, Pennsylvania 16803
 
   
PennTex Resources, L.P.
1.  1975 Waddle Road, State College, Pennsylvania 16803
 
2.  Route 1, Box 197, Bridgeport, Illinois 62417
 
 

 
 

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Schedule 6
INTELLECTUAL PROPERTY

 
Copyrights and Copyright Licenses
 
None.
 
Patents and Patent Licenses
 
None.
 
Trademarks and Trademark Licenses
 
Grantor
Trademark Name
Reg. No.
Date Registered
       
Rex Energy Operating Corp.
Rex Energy Trademark
3,132,973
August 22, 2006
       
Rex Energy Operating Corp.
Rex Energy and Lion Design Trademark
3,132,974
August 22, 2006

 
 

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Schedule 7
RECEIVABLES WITH GOVERNMENTAL AUTHORITY AS OBLIGOR

None.

 

 

 
 

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Annex I
 
ACKNOWLEDGMENT AND CONSENT
 
The undersigned hereby acknowledges receipt of a copy of the Guaranty and
Collateral Agreement dated as of September 28, 2007 (the “Guaranty and
Collateral Agreement”), made by the Grantors parties thereto for the benefit of
KeyBank National Association, as Administrative Agent.  The undersigned agrees
for the benefit of the Administrative Agent and the Secured Parties as follows:
 
1.           The undersigned will be bound by the terms of the Guaranty and
Collateral Agreement and will comply with such terms insofar as such terms are
applicable to the undersigned.
 
2.           The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.07(a) of
the Guaranty and Collateral Agreement.
 
3.           The terms of Section 6.03(c) and Section 6.07 of the Guaranty and
Collateral Agreement shall apply to it, mutatismutandis, with respect to all
actions that may be required of it pursuant to Section 6.03(c) and Section 6.07
of the Guaranty and Collateral Agreement.
 
[NAME OF ISSUER]

By: ______________________________________
Title:

Address for Notices:

Fax:                      

 

 

*
This consent is necessary only with respect to any Issuer which is not also a
Grantor.  This consent may be modified or eliminated with respect to any Issuer
that is not controlled by a Grantor.

 

 
 

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Annex II
 
Assumption Agreement
 

 
ASSUMPTION AGREEMENT, dated as of [                 ], 200[   ], made by
[                 ], a [                 ] (the “Additional Grantor”), in favor
of KeyBank National Association, as administrative agent (in such capacity, the
“Administrative Agent”) for the Lenders party to the Credit Agreement referred
to below.  All capitalized terms not defined herein shall have the meaning
ascribed to them in the Guaranty and Collateral Agreement referred to below.
 
W I T N E S S E T H:
 
WHEREAS, Rex Energy Corporation, a corporation duly formed and existing under
the laws of the State of [Delaware] (the “Borrower”), the Administrative Agent,
and certain financial institutions (the “Lenders”) have entered into that
certain Credit Agreement, dated as of September 28, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”);
 
WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its affiliates (other than the Additional Grantor) have entered into that
certain Guaranty and Collateral Agreement, dated as of September 28, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Guaranty and Collateral Agreement”) in favor of the Administrative Agent for
the ratable benefit of the Secured Parties;
 
WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guaranty and Collateral Agreement; and
 
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guaranty and Collateral
Agreement;
 
NOW, THEREFORE, IT IS AGREED:
 
1.           Guaranty and Collateral Agreement.  By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 9.13
of the Guaranty and Collateral Agreement, hereby becomes a party to the Guaranty
and Collateral Agreement as a Grantor thereunder with the same force and effect
as if originally named therein as a Grantor and, without limiting the generality
of the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor and a Guarantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guaranty and Collateral Agreement.  The Additional Grantor hereby represents and
warrants that, with respect to itself and as applicable, each of the
representations and warranties contained in Article IV of the Guaranty and
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.
 
2.           Governing Law.  This Assumption Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas.
 

 
 

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       3.           Miscellaneous.  This Assumption Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  Any provision of this Assumption Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
 
              IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
 
[ADDITIONAL GRANTOR]
 

By: _____________________________________
Name:
Title:

 

 

 
 

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Annex III
 
Supplement
 

 
SUPPLEMENT, dated as of [                 ], 200[   ], made by
[                 ], a [                 ] (the “Grantor”), in favor of KeyBank
National Association, as administrative agent (in such capacity, the
“Administrative Agent”) for the Lenders party to the Credit Agreement referred
to below.  All capitalized terms not defined herein shall have the meaning
ascribed to them in the Guaranty and Collateral Agreement referred to below.
 
W I T N E S S E T H:
 
WHEREAS, Rex Energy Corporation, a corporation duly formed and existing under
the laws of the State of [Delaware] (the “Borrower”), the Administrative Agent,
and certain financial institutions (the “Lenders”) have entered into that
certain Credit Agreement, dated as of September 28, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”);
 
WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Affiliates (including the Grantor) have entered into that certain Guaranty
and Collateral Agreement, dated as of September 28, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Guaranty and
Collateral Agreement”) in favor of the Administrative Agent for the ratable
benefit of the Secured Parties;
 
WHEREAS, the Credit Agreement requires the Grantor to pledge the Equity
Interests described in Schedule 2-S hereto; and
 
WHEREAS, the Grantor has agreed to execute and deliver this Supplement in order
to pledge such Equity Interests;
 
NOW, THEREFORE, IT IS AGREED:
 
1.           Guaranty and Collateral Agreement.  By executing and delivering
this Supplement, the information set forth in Schedule 2-S hereto is hereby
added to the information set forth in Schedule 2 to the Guaranty and Collateral
Agreement.  The Grantor hereby represents and warrants that, with respect to
itself and as applicable, each of the representations and warranties contained
in Article IV of the Guaranty and Collateral Agreement is true and correct on
and as the date hereof (after giving effect to this Supplement) as if made on
and as of such date.
 
2.           Governing Law.  This Supplement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
 
3.           Miscellaneous.  This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  Any provision of this
 

 
 

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Supplement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
 
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered as of the date first above written.
 
[GRANTOR]
 

By: _____________________________________
Name:
Title:

 
 

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