Exhibit 10.2

 

GUARANTY AND PLEDGE AGREEMENT

 

 

DATED AS OF

JUNE 15, 2005

 

 

MADE BY

 

 

WHITTIER ENERGY CORPORATION

AND

EACH OF THE OTHER OBLIGORS (AS DEFINED HEREIN)

 

 

IN FAVOR OF

 

 

BNP PARIBAS,

AS ADMINISTRATIVE AGENT

 

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TABLE OF CONTENTS

 

 

ARTICLE I Definitions

 

Section 1.01

Definitions

 

Section 1.02

Other Definitional Provisions

 

Section 1.03

Rules of Interpretation

 

ARTICLE II Guarantee

 

Section 2.01

Guarantee

 

Section 2.02

Right of Contribution

 

Section 2.03

No Subrogation

 

Section 2.04

Guaranty Amendments, Etc. with respect to the Borrower Obligations

 

Section 2.05

Waivers

 

Section 2.06

Guaranty Absolute and Unconditional

 

Section 2.07

Reinstatement

 

Section 2.08

Payments

 

ARTICLE III Grant of Security Interest

 

Section 3.01

Grant of Security Interest

 

Section 3.02

Transfer of Pledged Securities

 

ARTICLE IV Representations and Warranties

 

Section 4.01

Representations in Credit Agreement

 

Section 4.02

Title; No Other Liens

 

Section 4.03

Perfected First Priority Liens

 

Section 4.04

Obligor Information

 

Section 4.05

Pledged Securities

 

Section 4.06

Benefit to the Guarantor

 

Section 4.07

Solvency

 

ARTICLE V Covenants

 

Section 5.01

Maintenance of Perfected Security Interest; Further Documentation

 

Section 5.02

Changes in Locations, Name, Etc.

 

Section 5.03

Pledged Securities

 

ARTICLE VI Remedial Provisions

 

Section 6.01

Code and Other Remedies

 

Section 6.02

Pledged Securities

 

Section 6.03

Private Sales of Pledged Securities

 

Section 6.04

Waiver; Deficiency

 

Section 6.05

Non-Judicial Enforcement

 

ARTICLE VII The Administrative Agent

 

Section 7.01

Administrative Agent’s Appointment as Attorney-in-Fact, Etc

 

Section 7.02

Duty of Administrative Agent

 

Section 7.03 [a05-11145_1ex10d2.htm#Section7_03_090641]

Execution of Financing Statements [a05-11145_1ex10d2.htm#Section7_03_090641]

 

Section 7.04 [a05-11145_1ex10d2.htm#Section7_04_090644]

Authority of Administrative Agent [a05-11145_1ex10d2.htm#Section7_04_090644]

 

ARTICLE VIII Subordination of Indebtedness
[a05-11145_1ex10d2.htm#Articleviii_090646]

 

 

i

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Section 8.01 [a05-11145_1ex10d2.htm#Section8_01_090654]

Subordination of All Obligor Claims [a05-11145_1ex10d2.htm#Section8_01_090654]

 

Section 8.02 [a05-11145_1ex10d2.htm#Section8_02_090702]

Claims in Bankruptcy [a05-11145_1ex10d2.htm#Section8_02_090702]

 

Section 8.03 [a05-11145_1ex10d2.htm#Section8_03_090824]

Payments Held in Trust [a05-11145_1ex10d2.htm#Section8_03_090824]

 

Section 8.04 [a05-11145_1ex10d2.htm#Section8_04_090830]

Liens Subordinate [a05-11145_1ex10d2.htm#Section8_04_090830]

 

Section 8.05 [a05-11145_1ex10d2.htm#Section8_05_090836]

Notation of Records [a05-11145_1ex10d2.htm#Section8_05_090836]

 

ARTICLE IX Miscellaneous [a05-11145_1ex10d2.htm#Articleix_090838]

 

Section 9.01 [a05-11145_1ex10d2.htm#Section9_01_090843]

Waiver [a05-11145_1ex10d2.htm#Section9_01_090843]

 

Section 9.02 [a05-11145_1ex10d2.htm#Section9_02_090917]

Notices [a05-11145_1ex10d2.htm#Section9_02_090917]

 

Section 9.03 [a05-11145_1ex10d2.htm#Section9_03_090929]

Payment of Expenses, Indemnities, Etc [a05-11145_1ex10d2.htm#Section9_03_090929]

 

Section 9.04 [a05-11145_1ex10d2.htm#Section9_04_090947]

Amendments in Writing [a05-11145_1ex10d2.htm#Section9_04_090947]

 

Section 9.05 [a05-11145_1ex10d2.htm#Section9_05_090958]

Successors and Assigns [a05-11145_1ex10d2.htm#Section9_05_090958]

 

Section 9.06 [a05-11145_1ex10d2.htm#Section9_06_091010]

Survival; Revival; Reinstatement [a05-11145_1ex10d2.htm#Section9_06_091010]

 

Section 9.07 [a05-11145_1ex10d2.htm#Section9_07_091047]

Counterparts; Integration; Effectiveness
[a05-11145_1ex10d2.htm#Section9_07_091047]

 

Section 9.08 [a05-11145_1ex10d2.htm#Section9_08_091151]

Severability [a05-11145_1ex10d2.htm#Section9_08_091151]

 

Section 9.09 [a05-11145_1ex10d2.htm#Section9_09_091157]

Set-Off [a05-11145_1ex10d2.htm#Section9_09_091157]

 

Section 9.10 [a05-11145_1ex10d2.htm#Section9_10_091208]

Governing Law; Submission to Jurisdiction
[a05-11145_1ex10d2.htm#Section9_10_091208]

 

Section 9.11 [a05-11145_1ex10d2.htm#Section9_11_091248]

Headings [a05-11145_1ex10d2.htm#Section9_11_091248]

 

Section 9.12 [a05-11145_1ex10d2.htm#Section9_12_091255]

Acknowledgments [a05-11145_1ex10d2.htm#Section9_12_091255]

 

Section 9.13 [a05-11145_1ex10d2.htm#Section9_13_091314]

Additional Obligors and Pledgors [a05-11145_1ex10d2.htm#Section9_13_091314]

 

Section 9.14 [a05-11145_1ex10d2.htm#Section9_14_091320]

Releases [a05-11145_1ex10d2.htm#Section9_14_091320]

 

Section 9.15 [a05-11145_1ex10d2.htm#Section9_15_091431]

Acceptance [a05-11145_1ex10d2.htm#Section9_15_091431]

 

 

SCHEDULES:

 

1 [a05-11145_1ex10d2.htm#Schedule1_110633]

Notice Addresses of Obligors [a05-11145_1ex10d2.htm#Schedule1_110633]

 

2 [a05-11145_1ex10d2.htm#DescriptionOfPledgedSecurities_110639]

Description of Pledged Securities
[a05-11145_1ex10d2.htm#DescriptionOfPledgedSecurities_110639]

 

3 [a05-11145_1ex10d2.htm#FilingsAndOtherActions_110645]

Filings and Other Actions Required to Perfect Security Interests
[a05-11145_1ex10d2.htm#FilingsAndOtherActions_110645]

 

4 [a05-11145_1ex10d2.htm#LocationOfJurisdictionOfOrganizat_110650]

Location of Jurisdiction of Organization and Chief Executive Office
[a05-11145_1ex10d2.htm#LocationOfJurisdictionOfOrganizat_110650]

 

 

 

 

ANNEXES:

 

I [a05-11145_1ex10d2.htm#AnnexI_110703]

Form of Assumption Agreement [a05-11145_1ex10d2.htm#AnnexI_110703]

 

II [a05-11145_1ex10d2.htm#AnnexIi_110708]

Form of Supplement [a05-11145_1ex10d2.htm#AnnexIi_110708]

 

 

ii

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This GUARANTY AND PLEDGE AGREEMENT, dated as of June 15, 2005, is made by
WHITTIER ENERGY CORPORATION, a Nevada corporation (the “Borrower”), and each of
the signatories hereto (the Borrower and each of the signatories hereto,
together with any other Subsidiary of the Borrower that becomes a party hereto
from time to time after the date hereof, the “Obligors”), in favor of BNP
PARIBAS 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 of even date herewith (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, the Lenders, the
Administrative Agent, and the other Agents party thereto.

 

R E C I T A L S

 

A.                                   The Borrower has entered into that certain
Credit Agreement dated as of the date hereof among the Borrower, the Lenders,
the Administrative Agent for the Lenders, and the other Agents party thereto (as
the same may be from time to time amended, supplemented or restated, the “Credit
Agreement”).

 

B.                                     It is a condition precedent to the
obligation of the Lenders to make their respective extensions of credit to the
Borrower under the Credit Agreement that the Obligors shall have executed and
delivered this Agreement to the Administrative Agent for the ratable benefit of
the Lenders.

 

C.                                     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
extensions of credit to the Borrower thereunder, each Obligor 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 on the date hereof are used herein as so defined.

 

(b)                                 The following terms have the following
meanings:

 

“Agreement” means this Guaranty and Pledge 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 I.

 

“Bankruptcy Code” means title 11, United States Code, as amended from time to
time.

 

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“Borrower Obligations” means the collective reference to the payment and
performance of all Indebtedness and all obligations of the Borrower and its
Subsidiaries under the Guaranteed Documents, including, without limitation, the
unpaid principal of and interest on the Loans and the LC Exposure and all other
obligations and liabilities of the Borrower and its Subsidiaries (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 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 Guaranteed Creditors, 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
Guaranteed Documents, 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 Guaranteed Creditors that are required
to be paid by the Borrower pursuant to the terms of any Guaranteed Documents).

 

“Collateral” has the meaning assigned such term in Section 3.01.

 

“Guaranteed Creditors” means the collective reference to the Administrative
Agent, the Lenders and the Affiliates of Lenders that are parties to Guaranteed
Swap Agreements.

 

“Guaranteed Documents” means the collective reference to the Credit Agreement,
the other Loan Documents, each Guaranteed Swap Agreement and any other document
made, delivered or given in connection with any of the foregoing.

 

“Guaranteed Swap Agreement” means any Swap Agreement between the Borrower or any
of its Subsidiaries and any Lender or any Affiliate of any Lender while such
Person (or, in the case of an Affiliate of a Lender, the Person affiliated
therewith) is a Lender regardless of when such Swap Agreement was entered into. 
For the avoidance of doubt, a Swap Agreement ceases to be a Guaranteed Swap
Agreement if 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).

 

“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
Guaranteed Document to which such Guarantor is a party, 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 Guaranteed Creditor under any
Guaranteed Document).

 

“Guarantors” means the collective reference to each Obligor other than the
Borrower.

 

“Issuers” means the collective reference to each issuer of a Pledged Security.

 

“LLC” means, with respect to each Pledgor, each limited liability company
described or referred to in Schedule 2 in which such Pledgor has an interest.

 

2

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“LLC Agreement” means, with respect to each Pledgor, 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.

 

“Obligor Claims” has the meaning assigned to such term in Section 8.01.

 

“Partnership” means, with respect to each Pledgor, each partnership described or
referred to in Schedule 2 in which such Pledgor has an interest.

 

“Partnership Agreement” means, with respect to each Pledgor, each partnership
agreement governing a Partnership, as each such agreement has heretofore been,
and may hereafter be, amended, restated, supplemented or otherwise modified.

 

“Pledged LLC Interests” means, with respect to each Pledgor, all right, title
and interest of such Pledgor as a member of each LLC and all right, title and
interest of any Pledgor in, to and under each LLC Agreement.

 

“Pledged Partnership Interests” means, with respect to each Pledgor, all right,
title and interest of such Pledgor as a limited or general partner in all
Partnerships and all right, title and interest of any Pledgor 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); and (b) (i) the certificates or instruments, if any, representing
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.

 

“Pledgor” means any Obligor that now or hereafter pledges Pledged Securities
hereunder.

 

“Proceeds” means all “proceeds” as such term is defined in Section 9.102(64) of
the Uniform Commercial Code in effect in the State of Texas 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.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Supplement” means a Supplement substantially in the form attached hereto as
Annex II.

 

3

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“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 and the Guaranteed Creditors’ 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.

 

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 Pledgor, refer to such Pledgor’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, mutatis mutandis.

 

ARTICLE II
Guarantee

 

Section 2.01                                Guarantee.

 

(a)                                  Each of the Guarantors hereby jointly and
severally, unconditionally and irrevocably, guarantees to the Guaranteed
Creditors and each of their respective successors, indorsees, transferees and
assigns, the prompt and complete payment in cash and performance by the Borrower
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 Guaranteed
Creditor 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.  The guarantee 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.

 

4

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(e)                                  No payment made by any Obligor, any other
guarantor or any other Person or received or collected by any Guaranteed
Creditor 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 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 Guaranteed
Creditors, and each Guarantor shall remain liable to the Guaranteed Creditors
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 Guaranteed Creditor, no Guarantor shall be entitled to
be subrogated to any of the rights of any Guaranteed Creditor against the
Borrower or any other Guarantor or any collateral security or guarantee or right
of offset held by any Guaranteed Creditor for the payment of the Borrower
Obligations, nor shall any Guarantor seek or be entitled to 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 Guaranteed Creditors by the Borrower 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 Guaranteed Creditors, 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, whether matured or unmatured, 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), (a) any demand for payment of any of the
Borrower Obligations made by any Guaranteed Creditor may be rescinded by such
Guaranteed Creditor or otherwise and any of

 

5

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the Borrower Obligations continued; (b) 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 Guaranteed Creditor; (c) any
Guaranteed Document may be amended, modified, supplemented or terminated, in
whole or in part, as the Guaranteed Creditors may deem advisable from time to
time; (d) any collateral security, guarantee or right of offset at any time held
by any Guaranteed Creditor for the payment of the Borrower Obligations may be
sold, exchanged, waived, surrendered or released; (e) any additional guarantors,
makers or endorsers of the Borrower’s Obligations may from time to time be
obligated on the Borrower’s Obligations or any additional security or collateral
for the payment and performance of the Borrower’s Obligations may from time to
time secure the Borrower’s Obligations; or (f) any other event shall occur which
constitutes a defense or release of sureties generally.  No Guaranteed Creditor
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 Guaranteed
Creditor 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
Guaranteed Creditors, 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 Guaranteed 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 Guaranteed Creditor;

 

(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
Guaranteed Creditor;

 

6

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(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;

 

(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 Obligor or in the relationship between the Borrower and any
Obligor;

 

(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 Obligor;

 

(viii)                        (A) any Guaranteed Creditor’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; (B) 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; (C) the disallowance, under
Section 502 of the Bankruptcy Code, of all or any portion of any Guaranteed
Creditor’s claim (or claims) for repayment of the Obligations; (D) any use of
cash collateral under Section 363 of the Bankruptcy Code; (E) any agreement or
stipulation as to the provision of adequate protection in any bankruptcy
proceeding; (F) the avoidance of any Lien in favor of the Guaranteed Creditors
or any of them for any reason; or (G) failure by any Guaranteed Creditor 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
Guaranteed Creditor 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

 

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with respect thereto, and any failure by any Guaranteed Creditor 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 Guaranteed Creditor against any Guarantor.  For 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 Guaranteed Creditor 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.  Each Guarantor hereby
guarantees that payments hereunder will be paid to the Administrative Agent, for
the ratable benefit of the Guaranteed Creditors, 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.

 

ARTICLE III
Grant of Security Interest

 

Section 3.01                                Grant of Security Interest.  Each
Pledgor hereby pledges, assigns and transfers to the Administrative Agent, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Guaranteed Creditors, a security interest in all of the following Property now
owned or at any time hereafter acquired by such Pledgor or in which such Pledgor
now has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Pledgor’s Obligations:

 

(1)                                  all Pledged Securities;

 

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

 

(3)                                  to the extent not otherwise included, all
Proceeds 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.

 

Section 3.02                                Transfer of Pledged Securities.  To
the extent the Pledge Securities constitute “securities” under Article 8 of the
UCC, all certificates or instruments representing or evidencing such 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

 

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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
reasonable discretion, to the extent the Pledge Securities constitute
“securities” under Article 8 of the UCC, all such 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 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 extensions of
credit to the Borrower thereunder and to induce the Lenders (and their
Affiliates) to enter into Swap Agreements with the Borrower and its
Subsidiaries, each Obligor hereby represents and warrants to the Administrative
Agent and each Lender that:

 

Section 4.01                                Representations in Credit
Agreement.  In the case of each Guarantor, the representations and warranties
set forth in Article VII of the Credit Agreement as they relate to such
Guarantor or to the Loan Documents to which such Guarantor is a party are true
and correct in all material respects, 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 Guarantor’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 Guaranteed Creditors pursuant to this Agreement, such Pledgor is
the record and beneficial owner of its respective items of the Collateral free
and clear of any and all Liens and has rights in or the power to transfer each
item of the Collateral in which a Lien is granted by it hereunder, free and
clear of any Lien.  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 Guaranteed Creditors, pursuant to this Agreement or
the Security Instruments.

 

Section 4.03                                Perfected First Priority Liens.  The
security interests granted pursuant to this Agreement (a) upon the completion of
the filings and the other actions specified on Schedule 3 constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Guaranteed Creditors, as
collateral security for such Pledgor’s Obligations, enforceable in accordance
with the terms hereof against all creditors of such Pledgor and any Persons
purporting to purchase any Collateral from such Pledgor and (b) are prior to all
other Liens on the Collateral in existence on the date hereof.

 

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Section 4.04                                Obligor Information.  On the date
hereof, the correct legal name of such Obligor, all names and trade names that
such Obligor has used in the last five years, such Obligor’s jurisdiction of
organization and each jurisdiction of organization of such Obligor over the last
five years, organizational number, taxpayor identification number, and the
location(s) of such Obligor’s chief executive office or sole place of business
over the last five years are specified on Schedule 4.

 

Section 4.05                                Pledged Securities.

 

(a)                                  The Pledged Securities required to be
pledged hereunder and under the Credit Agreement by such Pledgor are listed in
Schedule 2.  The shares of Pledged Securities pledged by such Pledgor hereunder
constitute all the issued and outstanding shares of all classes of the Equity
Interests of each Issuer owned by such Pledgor.  All the shares of the Pledged
Securities have been duly and validly issued and are fully paid and
nonassessable; and such Pledgor is the record and beneficial owner of, and has
good title to, the Pledged Securities 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 Pledged Securities 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 and the Partnership Agreement governing any Pledged
Partnership Interest or any other agreement relating thereto which would limit
or restrict (i) the grant of a security interest in the Pledged LLC Interests
and the Pledged Partnership Interests, (ii) the perfection of such security
interest or (iii) the exercise of remedies in respect of such perfected security
interest in the Pledged LLC Interests and the Pledged Partnership Interests, in
each case, as contemplated by this Agreement.  Upon the exercise of remedies in
respect of the Pledged LLC Interests and the Pledged Partnership Interests, a
transferee or assignee of a membership interest or 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 and, upon the transfer
of the entire interest of such Pledgor, such Pledgor ceases to be a member or
partner, as the case may be.

 

Section 4.06                                Benefit to the Guarantor.  The
Borrower is a member of an affiliated group of companies that includes each
Guarantor, and the Borrower and the other Guarantors are engaged in related
businesses.  Each Guarantor is a Subsidiary of the Borrower and its guaranty and
surety obligations pursuant to this Agreement reasonably may be expected to
benefit, directly or indirectly, it; and it has determined that this Agreement
is necessary and convenient to the conduct, promotion and attainment of the
business of such Guarantor and the Borrower.

 

Section 4.07                                Solvency.  Each Obligor (a) is not
insolvent as of the date hereof and will not be rendered insolvent as a result
of this Agreement (after giving effect to Section 2.02), (b) is not engaged in
business or a transaction, or about to engage in a business or a transaction,
for which any Property remaining with it constitutes unreasonably small capital,
and (c) does not intend to incur, or believe it will incur, Debt that will be
beyond its ability to pay as such Debt matures.

 

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ARTICLE V
Covenants

 

Each Obligor 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 paid in full in cash, no Letter of Credit shall be outstanding
and all of the Commitments shall have terminated:

 

Section 5.01                                Covenants in Credit Agreement.  In
the case of each Guarantor, such Guarantor 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, so that no Default is caused by the failure to take
such action or to refrain from taking such action by such Guarantor or any of
its Subsidiaries.

 

Section 5.02                                Maintenance of Perfected Security
Interest; Further Documentation.  Each Pledgor agrees that:

 

(a)                                  it shall maintain the security interest
created by this Agreement as a perfected security interest having at least the
priority described in Section 4.03 and shall defend such security interest
against the claims and demands of all Persons whomsoever.

 

(b)                                 it will furnish to the Administrative Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral 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
Pledgor, it 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 deem necessary for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, the delivery of certificated
securities  and the filing of 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.

 

Section 5.03                                Changes in Locations, Name, Etc. 
Such Obligor recognizes that financing statements pertaining to the Collateral
have been or may be filed where such Obligor maintains any Collateral or is
organized.  Without limitation of Section 8.01(m) of the Credit Agreement or any
other covenant herein, such Obligor will not cause or permit any change in its
(a) corporate name or in any trade name used to identify it in the conduct of
its business or in the ownership of its Properties, (b) the location of its
chief executive office or principal place of business, (c) its identity or
corporate structure or in the jurisdiction in which it is incorporated or
formed, (d) its jurisdiction of organization or its organizational
identification number in such jurisdiction of organization or (e) its federal
taxpayer identification number, unless, in each case, such Obligor shall have
first (i) notified the Administrative Agent of such change at least thirty (30)
days prior to the effective date of such change, and (ii) taken all action
reasonably requested by the Administrative Agent for the purpose of maintaining
the perfection and priority of the

 

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Administrative Agent’s security interests under this Agreement.  In any notice
furnished pursuant to this Section 5.03, such Obligor will expressly state in a
conspicuous manner that the notice is required by this Agreement and contains
facts that may require additional filings of financing statements or other
notices for the purposes of continuing perfection of the Administrative Agent’s
security interest in the Collateral.  At the request of the Administrative
Agent, on or prior to the occurrence of such event, the Borrower will provide to
the Administrative Agent and the Lenders an opinion of counsel, in form and
substance reasonably satisfactory to the Administrative Agent, to the effect
that such event will not impair the validity of the security interests
hereunder, the perfection and priority thereof, the enforceability of the Loan
Documents, and such other matters as may be reasonably requested by the
Administrative Agent.

 

Section 5.04                                Pledged Securities.

 

(a)                                  If such Pledgor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock 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 Pledgor shall accept the same as the agent of
the Guaranteed Creditors, hold the same in trust for the Guaranteed Creditors,
segregated from other Property of such Pledgor, and deliver the same forthwith
to the Administrative Agent in the exact form received, duly indorsed by such
Pledgor to the Administrative Agent, if required, together with an undated stock
power covering such certificate duly executed in blank by such Pledgor and with,
if the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations.

 

(b)                                 Without the prior written consent of the
Administrative Agent, such Pledgor 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 Pledged Securities 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 Pledged Securities 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 Pledgor or the Administrative Agent to sell, assign or
transfer any of the Pledged Securities or Proceeds thereof.

 

(c)                                  In the case of each Pledgor that is an
Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Pledged Securities 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 5.04(a) with respect to the Pledged Securities issued by it
and (iii) the terms of Sections Section 6.02(a) and Section 6.03 shall apply to
it, mutatis mutandis, with respect to all actions

 

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that may be required of it pursuant to Section 6.02(d) or Section 6.03 with
respect to the Pledged Securities issued by it.

 

(d)                                 In the case of each Pledgor that is a
partner in a Partnership, such Pledgor hereby consents to the extent required by
the applicable Partnership Agreement to the pledge by each other Pledgor,
pursuant to the terms hereof, of the Pledged Partnership Interests in such
Partnership and, after the occurrence and during the continuance of an Event of
Default, 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 Pledgor member of an LLC, such
Pledgor hereby consents to the extent required by the applicable LLC Agreement
to the pledge by each other Pledgor, pursuant to the terms hereof, of the
Pledged LLC Interests in such LLC and, after the occurrence and during the
continuance of an Event of Default, 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 the LLC in question.

 

(e)                                  Such Pledgor shall not agree to any
amendment of a Partnership Agreement or LLC Agreement that 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
Pledgor hereunder, including any amendment electing to treat the membership
interest or partnership interest of such Pledgor as a security under
Section 8-103 of the UCC.

 

(f)                                    Each Pledgor shall furnish to the
Administrative Agent such stock powers and other instruments as may be required
by the Administrative Agent to assure the transferability of the Pledged
Securities when and as often as may be reasonably requested by the
Administrative Agent.

 

(g)                                 The Pledged Securities will at all times
constitute not less than 100% of the Equity Interests of the Issuer thereof
owned by any Pledgor.  Each Pledgor will not permit any Issuer of any of the
Pledged Securities to issue any new shares of any class of Equity Interests of
such Issuer without the prior written consent of the Administrative Agent.

 

ARTICLE VI
Remedial Provisions

 

Section 6.01                                Code and Other Remedies.

 

(a)                                  Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent, on behalf of the
Guaranteed Creditors, 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

 

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notice of any kind (except any notice required by law referred to below) to or
upon any Pledgor 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 Guaranteed Creditor 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 Guaranteed
Creditor 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 Pledgor, which right or equity is hereby waived and released. 
If applicable to any particular item of Collateral, each Pledgor 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 Pledgor’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 Pledgor,
including any equity or right of redemption, stay or appraisal which Pledgor has
or may have under any rule of law, regulation or statute now existing or
hereafter adopted (and such Pledgor 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 6.01, 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 Guaranteed Creditors 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 any provision of law,
including, without limitation, Section 9.615 of the UCC, need the Administrative
Agent account for the surplus, if any, to any Pledgor.  To the extent permitted
by applicable law, each Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Guaranteed Creditor 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
Guaranteed Creditor 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.

 

(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.

 

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Section 6.02                                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 Pledgor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.02(c), each Pledgor shall be
permitted to receive all cash dividends paid in respect of the Pledged
Securities paid in the normal course of business of the relevant Issuer (other
than liquidating or distributing dividends), to the extent permitted in the
Credit Agreement.  Any sums paid upon or in respect of any Pledged Securities
upon the liquidation or dissolution of any issuer of any Pledged Securities, any
distribution of capital made on or in respect of any Pledged Securities or any
property distributed upon or with respect to any Pledged Securities pursuant to
the recapitalization or reclassification of the capital of any issuer of Pledged
Collateral or pursuant to the reorganization thereof 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 sum of money or
property so paid or distributed in respect of any Pledged Securities shall be
received by such Pledgor, such Pledgor 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, segregated from other funds of such Pledgor,
as additional security for the Obligations.

 

(b)                                 Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Pledgor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.02(c), each Pledgor shall be entitled
to exercise all voting, consent and corporate, partnership or limited liability
rights with respect to the Pledged Securities; provided, however, that no vote
shall be cast, consent given or right exercised or other action taken by such
Pledgor that would impair the Collateral, be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document or, without the prior consent of the Administrative Agent and the
Lenders, enable or permit any issuer of Pledged Collateral to issue any Equity
Interest or to issue any other securities convertible into or granting the right
to purchase or exchange for any Stock of any issuer of Pledged Collateral other
than as permitted by the Credit Agreement.

 

(c)                                  Upon the occurrence and during the
continuance of an Event of Default, upon notice by the Administrative Agent of
its intent to exercise such rights to the relevant Pledgor or Pledgors, (i) the
Administrative Agent shall have the right to receive any and all cash dividends,
payments, Property or other Proceeds paid in respect of the Pledged Securities
and make application thereof to the Borrower Obligations in accordance with
Section 10.02(c) of the Credit Agreement, and (ii) any or all of the Pledged
Securities shall be registered in the name of the Administrative Agent or its
nominee, and (iii) the Administrative Agent or its nominee may exercise (A) all
voting, consent, corporate, partnership or limited liability and other rights
pertaining to such Pledged Securities at any meeting of shareholders, partners
or members (or other equivalent body), as the case may be, 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 Pledged Securities as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Securities upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in

 

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the organizational structure of any Issuer, or upon the exercise by any Pledgor
or the Administrative Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities 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 Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

 

(d)                                 Upon the occurrence and during the
continuance of an Event of Default, in order to permit the Administrative Agent
to exercise the voting and other consensual rights that it may be entitled to
exercise pursuant hereto and to receive all dividends and other distributions
that it may be entitled to receive hereunder, (i) each Pledgor shall promptly
execute and deliver (or cause to be executed and delivered) to the
Administrative Agent all such proxies, dividend payment orders and other
instruments as the Administrative Agent may from time to time reasonably request
and (ii) without limiting the effect of clause (i) above, such Pledgor hereby
grants to the Administrative Agent an irrevocable proxy to vote all or any part
of the Pledged Securities and to exercise all other rights, powers, privileges
and remedies to which a holder of the Pledged Securities would be entitled
(including giving or withholding written consents of shareholders, partners or
members, as the case may be, calling special meetings of shareholders, partners
or members, as the case may be, and voting at such meetings), which proxy shall
be effective, automatically and without the necessity of any action (including
any transfer of any Pledged Securities on the record books of the Issuer
thereof) by any other Person (including the Issuer of such Pledged Collateral or
any officer or agent thereof).

 

(e)                                  Each Pledgor hereby authorizes and
instructs each Issuer of any Pledged Securities pledged by such Pledgor
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 Pledgor, and
each Pledgor 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 Pledged Securities directly to the Administrative
Agent.

 

(f)                                    Upon the occurrence and during the
continuance of an Event of Default, if the Issuer of any Pledged Securities is
the subject of bankruptcy, insolvency, receivership, custodianship or other
proceedings under the supervision of any Governmental Authority, then all rights
of the Pledgor in respect thereof to exercise the voting and other consensual
rights which such Pledgor would otherwise be entitled to exercise with respect
to the Pledged Securities issued by such Issuer shall cease, and all such rights
shall thereupon become vested in the Administrative Agent who shall thereupon
have the sole right to exercise such voting and other consensual rights, but the
Administrative Agent shall have no duty to exercise any such voting or other
consensual rights and shall not be responsible for any failure to do so or delay
in so doing.

 

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Section 6.03                                Private Sales of Pledged Securities.

 

(a)                                  Each Pledgor 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 Pledgor 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.

 

(b)                                 Each Pledgor agrees to use commercially
reasonable efforts to do or cause to be done all such other acts as may
reasonably be necessary to make such sale or sales of all or any portion of the
Pledged Securities pursuant to this Section 6.03 valid and binding and in
compliance with any and all other applicable Governmental Requirements.  Each
Pledgor further agrees that a breach of any of the covenants contained in this
Section 6.03 will cause irreparable injury to the Guaranteed Creditors, that the
Guaranteed Creditors have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this
Section 6.03 shall be specifically enforceable against such Pledgor, and such
Pledgor 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 or is continuing under the Credit Agreement.

 

Section 6.04                                Waiver; Deficiency.  Each Pledgor
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 Guaranteed Creditor to collect such deficiency.

 

Section 6.05                                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 Pledgor
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 Pledgor 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 such Pledgor and in
the name of such Pledgor or in its own name, for the purpose of carrying out

 

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the terms of this Agreement, to take any and all reasonably appropriate action
and to execute any and all documents and instruments which may be reasonably
necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Pledgor hereby gives the
Administrative Agent the power and right, on behalf of such Pledgor, without
notice to or assent by such Pledgor, to do any or all of the following:

 

(i)                                     in the name of such Pledgor or its own
name, or otherwise, take possession of and indorse and collect any check, draft,
note, acceptance or other instrument for the payment of moneys due with respect
to any 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 such moneys due with respect to any
other Collateral whenever payable;

 

(ii)                                  unless being disputed under Section 8.04
of the Credit Agreement, 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;

 

(iii)                               execute, in connection with any sale
provided for in Section 6.01 or Section 6.03, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the Collateral; and

 

(iv)                              (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) 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; (D) defend
any suit, action or proceeding brought against such Pledgor with respect to any
Collateral; (E) 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; and (F) generally, sell, transfer,
pledge and make any 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 Pledgor’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 Guaranteed
Creditors’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Pledgor 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 Obligor fails to perform or comply
with any of its agreements contained herein within the applicable grace periods,
the Administrative Agent, at its option, but

 

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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 a rate per annum equal to 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 Obligor, shall be payable by such
Obligor to the Administrative Agent on demand.

 

(d)                                 Each Obligor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue and in compliance
hereof.  All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated.

 

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 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 Guaranteed Creditor 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 Pledgor 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 Guaranteed Creditors hereunder are
solely to protect the Administrative Agent’s and the Guaranteed Creditors’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Guaranteed Creditor to exercise any such powers. 
The Administrative Agent and the Guaranteed Creditors 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 Obligor 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 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 Pledgor 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 Obligor, 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 Guaranteed Creditor to proceed
against any Obligor or other Person, exhaust any Collateral or enforce any other
remedy which the Administrative Agent or any Guaranteed Creditor now has or may
hereafter have against any Obligor or other Person.

 

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Section 7.03           Execution of Financing Statements.  Pursuant to the UCC
and any other applicable law, each Pledgor 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
Pledgor in such form and in such offices as the Administrative Agent reasonably
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.

 

Section 7.04           Authority of Administrative Agent.  Each Obligor
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 Guaranteed Creditors, 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 Obligors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Guaranteed Creditors with full and valid authority so to act or refrain from
acting, and no Obligor 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 Obligor Claims.  As used herein, the
term “Obligor Claims” shall mean all debts and obligations of the Borrower or
any other Obligor to any other Obligor, 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.  After the occurrence and during the
continuation of an Event of Default, no Obligor shall receive or collect,
directly or indirectly, from any other obligor in respect thereof any amount
upon the Obligor Claims.

 

Section 8.02           Claims in Bankruptcy.  In the event of receivership,
bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency
proceedings involving any Obligor, the Administrative Agent on behalf of the
Administrative Agent and the Guaranteed Creditors shall have the right to prove
their claim in any proceeding, so as to establish their rights hereunder and
receive directly from the receiver, trustee or other court custodian, dividends
and payments which would otherwise be payable upon Obligor Claims.  Each Obligor
hereby assigns such dividends and payments to the Administrative Agent for the
benefit of the Administrative Agent and the Guaranteed Creditors for application
against the Borrower Obligations as provided under Section 10.02(c) of the
Credit Agreement.  Should any Agent or Guaranteed Creditor receive, for
application upon the Obligations, any such dividend or payment which is
otherwise payable to any Obligor, and which, as between such Obligors, shall
constitute a credit upon the

 

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Obligor 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 Guaranteed
Creditors to the extent that such payments to the Administrative Agent and the
Guaranteed Creditors on the Obligor 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 Guaranteed Creditors had not received dividends or
payments upon the Obligor Claims.

 

Section 8.03           Payments Held in Trust.  In the event that,
notwithstanding Section 8.01 and Section 8.02, any Obligor 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
Guaranteed Creditors 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
Guaranteed Creditors; and each Obligor covenants promptly to pay the same to the
Administrative Agent.

 

Section 8.04           Liens Subordinate.  Each Obligor 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 Obligor 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 Obligor, the Administrative Agent or any
Guaranteed Creditor presently exist or are hereafter created or attach.  Without
the prior written consent of the Administrative Agent, no Obligor, 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 Obligor 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 securing payment of the Obligor
Claims held by it.

 

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 Obligor Claims accepted by or held by any Obligor 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           Waiver.  No failure on the part of the Administrative
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, privilege or remedy or any
abandonment or discontinuance of steps to enforce such right, power, privilege
or remedy under this Agreement or any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power,
privilege or remedy under this Agreement or any other Loan Document preclude or
be construed as a waiver of any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy.

 

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The remedies provided herein are cumulative and not exclusive of any 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           Payment of Expenses, Indemnities, Etc.

 

(a)           Each Guarantor agrees to pay or reimburse each Guaranteed Creditor
and the Administrative Agent for all out-of-pocket expenses incurred by such
Person, including the reasonable fees, charges and disbursements of any counsel
for the Administrative Agent or any Guaranteed Creditor, in connection with the
enforcement or protection of its rights in connection with this Agreement or any
other Loan Document, including, without limitation, all 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.

 

(b)           Each Guarantor agrees to pay, and to save the Administrative Agent
and the Guaranteed Creditors 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 Guaranteed Creditors 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
Agreement to the extent the Borrower would be required to do so pursuant to
Section 12.03 of the Credit Agreement.

 

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 Obligors and their successors and assigns and shall
inure to the benefit of the Administrative Agent and the Guaranteed Creditors
and their respective successors and assigns; provided that except as set forth
in Section 9.11 of the Credit Agreement, no Obligor 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 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 Obligor herein and in the certificates or other instruments delivered in
connection with or

 

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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 under any Loan Document, 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 Guarantor 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 Guarantor 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 Guaranteed Creditors’
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
shall take such action as may be reasonably requested by the Administrative
Agent and the Guaranteed Creditors 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
CREIDT AGREEMENTS) REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPERANEOUS 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

 

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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 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, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations (of whatsoever
kind, including, without limitations obligations under Swap Agreements) at any
time owing by such Lender or Affiliate to or for the credit or the account of
any Obligor against any of and all the obligations of the Obligor 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 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.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN THE COURTS OF 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 OF THE PARTIES 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

 

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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 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 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 OR 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
OTHER 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 Obligor 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 Guaranteed Creditor has
any fiduciary relationship with or duty to any Obligor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Obligors, on the one hand, and the Administrative Agent
and Guaranteed Creditors, 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
Guaranteed Creditors or among the Obligors and the Guaranteed Creditors.

 

25

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(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 PARTY HAD NO NOTICE OR KNOWLEDGE
OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

 

Section 9.13           Additional Obligors and Pledgors.  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 an Obligor 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
an Obligor party hereto on the date hereof.  Each Guarantor that is required to
pledge Equity Interests of its Subsidiaries shall execute and deliver a
Supplement, if such Equity Interests were not previously pledged.

 

Section 9.14           Releases.

 

(a)           Release Upon Payment in Full.  The grant of a security interest
hereunder and all rights, powers and remedies in connection herewith shall
remain in full force and effect until the Administrative Agent has
(i) retransferred and delivered all Collateral in its possession to the
Pledgors, and (ii) executed a written release or termination statement and
reassigned to the Pledgors without recourse or warranty any remaining Collateral
and all rights conveyed hereby.  Upon the complete payment of the Borrower
Obligations, the termination of all of the Commitments and the compliance by the
Obligors with all covenants and agreements hereof, the Administrative Agent, at
the expense of the Borrower, will promptly release, reassign and transfer the
Collateral to the Pledgors and declare 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 Pledgor in a transaction permitted
by the Credit Agreement, then the Administrative Agent, at the request and sole
expense of such Pledgor, shall promptly execute and deliver to such Pledgor all
releases or other documents reasonably necessary or desirable for the release of
the Liens created hereby on such Collateral and the Equity Interests of the
Issuer thereof.  At the request and sole expense of the Borrower, a Guarantor
shall be released from its obligations hereunder in the event that all the
Equity Interests of such Guarantor shall be sold, transferred or otherwise
disposed of in a transaction permitted by the Credit Agreement; provided that
the Borrower shall have delivered to the Administrative Agent,

 

26

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at least ten Business Days prior to the date of the proposed release, a written
request of a Responsible Officer of the Borrower for release identifying the
relevant Guarantor and the terms of the sale or 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 Guaranteed Creditors 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 Guaranteed Creditors 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 Obligor hereby expressly waives notice
of acceptance of this Agreement, acceptance on the part of the Administrative
Agent and the Guaranteed Creditors 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]

 

27

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

 

BORROWER:

WHITTIER ENERGY CORPORATION

 

 

 

By:

 

/s/ Michael B. Young

 

 

Name:

Michael B. Young

 

Title:

Chief Financial Officer

 

 

 

 

GUARANTORS:

WHITTIER ENERGY COMPANY

 

 

 

By:

 

/s/ Michael B. Young

 

 

Name:

Michael B. Young

 

Title:

Chief Financial Officer

 

 

 

 

 

WHITTIER OPERATING, INC.

 

 

 

By:

 

/s/ Michael B. Young

 

 

Name:

Michael B. Young

 

Title:

Chief Financial Officer

 

 

 

 

 

OLYMPIC RESOURCES (ARIZONA)
LTD.

 

 

 

By:

 

/s/ Michael B. Young

 

 

Name:

Michael B. Young

 

Title:

Chief Financial Officer

 

 

 

 

 

RIMCO PRODUCTION COMPANY,
INC.

 

 

 

By:

 

/s/ Michael B. Young

 

 

Name:

Michael B. Young

 

Title:

Chief Financial Officer

 

 

 

 

 

VAQUERO GAS COMPANY,
INCORPORATED

 

 

 

By:

 

/s/ Michael B. Young

 

 

Name:

Michael B. Young

 

Title:

Chief Financial Officer

 

Signature Page – Guaranty and Pledge Agreement

 

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RIMCO ENERGY, INC.

 

 

 

By:

 

/s/ Michael B. Young

 

 

Name:

Michael B. Young

 

Title:

Chief Financial Officer

 

2

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Acknowledged and Agreed to as

of the date hereof by:

 

ADMINISTRATIVE AGENT:

BNP PARIBAS

 

 

 

 

 

By:

 

/s/ David Dodd

 

 

Name:

David Dodd

 

Title:

Director

 

 

 

By:

 

/s/ Betsy Jocher

 

 

Name:

Betsy Jocher

 

Title:

Vice President

 

Signature Page – Guaranty and Pledge Agreement

 

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Schedule 1

 

NOTICE ADDRESSES OF OBLIGORS

 

Whittier Energy Corporation

333 Clay Street, Suite 1100

Houston, Texas 77002

 

Whittier Energy Company

333 Clay Street, Suite 1100

Houston, Texas 77002

 

Olympic Resources (Arizona) Ltd.

333 Clay Street, Suite 1100

Houston, Texas 77002

 

RIMCO Production Company, Inc.

333 Clay Street, Suite 1100

Houston, Texas 77002

 

Vaquero Gas Company, Incorporated

333 Clay Street, Suite 1100

Houston, Texas 77002

 

Whittier Operating, Inc.

333 Clay Street, Suite 1100

Houston, Texas 77002

 

RIMCO Energy, Inc.

333 Clay Street, Suite 1100

Houston, Texas 77002

 

1

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Schedule 2

 

DESCRIPTION OF PLEDGED SECURITIES

 

Pledged Securities:

 

Owner

 

Issuer

 

Percentage
Owned

 

Percentage
Pledged

 

Class of
Stock or
other
Equity
Interest

 

No. of
Shares

 

Certificate
No.

 

Whittier Energy Corporation

 

Whittier Energy Company

 

100%

 

100%

 

Common

 

1,000

 

1

 

Whittier Energy Company

 

Whittier Operating, Inc.

 

100%

 

100%

 

Common

 

100,000

 

148

 

Whittier Energy Corporation

 

RIMCO Production Company Inc.

 

100%

 

100%

 

Common

 

1,000

 

C-1

 

RIMCO Production Company Inc.

 

Vaquero Gas Company, Inc.

 

100%

 

100%

 

Common

 

819,252

 

10

 

RIMCO Production Company, Inc.

 

RIMCO Energy, Inc.

 

100%

 

100%

 

Common

 

960

 

6

 

 

1

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Schedule 3

 

FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS

 

1.                                       Filing of UCC-1 Financing Statements
with respect to the Collateral of the Borrower with the Secretary of State of
the State of Nevada and with respect to the Collateral of RIMCO Production
Company, Inc. with the Secretary of State of the State of Delaware.

 

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

 

1

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Schedule 4

 

LOCATION OF JURISDICTION OF ORGANIZATION

AND CHIEF EXECUTIVE OFFICE

 

Legal name of the Borrower:  Whittier Energy Corporation

Address:  333 Clay Street, Suite 1100, Houston, Texas 77002

All names and trade names that the Borrower has used in the last five years: 
Olympic Resources, Ltd., a Wyoming corporation, which corporation was merged
into Whittier Energy Corporation on 12.23.03

Jurisdictions of organization over the last five years:  Nevada; qualified to do
business in the states of Texas and Nevada

Current jurisdiction of organization:  Nevada; registered agent office in the
State of Nevada is 202 South Minnesota Street, Carson City, Nevada 89703; and
qualified to do business in the state of Texas

Organizational number:  C28115-2003

Taxpayer identification number:  20-0539412

Location of chief executive office or sole place of business over the last five
years:

333 Clay Street, Suite 1100, Houston, Texas 77002

 

Legal name of the Obligor:  Whittier Energy Company

Address:  333 Clay Street, Suite 1100, Houston, Texas 77002

All names and trade names that the Borrower has used in the last five years: 
WEC Acquisition, Inc., a Wyoming corporation, which corporation was merged into
Whittier Energy Company on 09.10.03

Jurisdictions of organization over the last five years:  Nevada; ; registered
agent office in the state of Nevada is 202 South Minnesota Street, Carson City,
Nevada 89703, and qualified to do business in the state of California

Current jurisdiction of organization:  Nevada

Organizational number:  C11607-1991

Taxpayer identification number:  95-4367452

Location of chief executive office or sole place of business over the last five
years:

P.O. Box 7770 El Camino Real, Carlsbad, California 92009

 

Legal name of the Obligor:  Olympic Resources (Arizona) Ltd.

Address:  333 Clay Street, Suite 1100, Houston, Texas 77002

All names and trade names that the Borrower has used in the last five years:  No
others

Jurisdictions of organization over the last five years:  Arizona; registered
agent office in the state of Arizona is 815 N. 1st, Suite 4, Phoenix, Arizona,
and qualified to do business in the state of California

Current jurisdiction of organization:  Arizona

Organizational number:  0787302-0

Taxpayer identification number:  98-0188488

Location of chief executive office or sole place of business over the last five
years:

2325 East Broadway Boulevard, Suite 200, Tucson, Arizona 85716-5303

 

1

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Legal name of the Obligor:  RIMCO Production Company, Inc.

Address:  333 Clay Street, Suite 1100, Houston, Texas 77002

All names and trade names that the Borrower has used in the last five years: 
Boston Oil & Gas U.S. Inc. a Delaware corporation, RIMCO Associates, Inc., a
Connecticut corporation, which corporations were merged into RIMCO Production
Company, Inc. on 03.30.01, and RIMCO Partners, L.P. II, a Delaware limited
partnership, RIMCO Partners, L.P. III, a Delaware limited partnership, and RIMCO
Partners, L.P. IV, a Delaware limited partnership, which limited partnerships
were merged into RIMCO Production Company, Inc. on 03.30.01

Jurisdictions of organization over the last five years:  Delaware; registered
agent office in the state of Delaware is 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808, and qualified to do business in the states of Texas,
Mississippi, Louisiana and Alabama

Current jurisdiction of organization:  Delaware

Organizational number:  2163479

Taxpayer identification number:  06-1239350

Location of chief executive office or sole place of business over the last five
years:

600 Travis, Suite 7050, Houston, Texas 77002

 

Legal name of the Obligor:  Vaquero Gas Company, Incorporated

Address:  333 Clay Street, Suite 1100, Houston, Texas 77002

All names and trade names that the Borrower has used in the last five years:  No
others

Jurisdictions of organization over the last five years:  Texas; registered agent
office is 600 Travis, Suite 7050, Houston, Texas 77002, and qualified to do
business in the states of New Mexico and Louisiana

Current jurisdiction of organization:  Texas

Organizational number:  122165300

Taxpayer identification number:  17-603600556

Location of chief executive office or sole place of business over the last five
years:

600 Travis, Suite 7050, Houston, Texas 77002

 

Legal name of the Obligor:  Whittier Operating, Inc.

Address:  333 Clay Street, Suite 1100, Houston, Texas 77002

All names and trade names that the Borrower has used in the last five years:  No
others

Jurisdictions of organization over the last five years:  Texas; registered agent
office is 800 Brazos, Suite 1100, Austin, Texas 78701, and qualified to do
business in the state of Louisiana

Current jurisdiction of organization:  Texas

Organizational number:  800065850

Taxpayer identification number:  10-205683559

Location of chief executive office or sole place of business over the last five
years:

333 Clay Street, Suite 1100, Houston, Texas 77002

 

2

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Legal name of the Borrower:  RIMCO Energy, Inc.

Address:  333 Clay Street, Suite 1100, Houston, Texas 77002

All names and trade names that the Borrower has used in the last five years:  No
others

Jurisdictions of organization over the last five years:  Texas; registered agent
office in the state of Texas is 600 Travis, Suite 6875, Houston, Texas 77002

Current jurisdiction of organization:  Texas

Organizational number:  131300800

Taxpayer identification number:  30-117237914

Location of chief executive office or sole place of business over the last five
years:

600 Travis, Suite 7050, Houston, Texas 77002

 

3

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ACKNOWLEDGMENT AND CONSENT

 

The undersigned hereby acknowledges receipt of a copy of the Guaranty and Pledge
Agreement dated as of June 15, 2005 (the “Guaranty and Pledge Agreement”), made
by the Obligors parties thereto for the benefit of BNP PARIBAS, as
Administrative Agent.  The undersigned agrees for the benefit of the
Administrative Agent and the Guaranteed Creditors as follows:

 

1.             The undersigned will be bound by the terms of the Guaranty and
Pledge Agreement and will comply with such terms insofar as such terms are
applicable to the undersigned.

 

2.             The terms of Section 6.01(a) and Section 6.03 of the Guaranty and
Pledge Agreement shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.02(a) or Section 6.03
of the Guaranty and Pledge Agreement.

 

 

[NAME OF ISSUER]

 

 

 

By:

 

 

 

Title:

 

 

 

Address for Notices:

 

 

 

 

 

 

 

 

 

 

Fax:

 

 

 

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

 

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Annex I

 

Assumption Agreement

 

ASSUMPTION AGREEMENT, dated as of [                 ], 200[   ], made by
[                 ], a [                 ] (the “Additional Obligor”), in favor
of BNP PARIBAS, as administrative agent (in such capacity, the “Administrative
Agent”) for the Guaranteed Creditors (used herein as defined in the Guaranty and
Pledge Agreement referred to below).  All capitalized terms not defined herein
shall have the meaning ascribed to them in the Credit Agreement referred to
below.

 

W I T N E S S E T H:

 

WHEREAS, Whittier Energy Corporation, a Nevada corporation (the “Borrower”), the
Administrative Agent, and certain financial institutions have entered into that
certain Credit Agreement, dated as of June 15, 2005 (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 Obligor) have entered into an Guaranty
and Pledge Agreement, dated as of June 15, 2005 (as amended, restated,
supplemented or otherwise modified from time to time, the “Guaranty and Pledge
Agreement”) in favor of the Administrative Agent for the benefit of the
Guaranteed Creditors;

 

WHEREAS, the Credit Agreement requires the Additional Obligor to become a party
to the Guaranty and Pledge Agreement; and

 

WHEREAS, the Additional Obligor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guaranty and Pledge
Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1.             Guaranty and Pledge Agreement.  By executing and delivering this
Assumption Agreement, the Additional Obligor, as provided in Section 9.13 of the
Guaranty and Pledge Agreement, hereby becomes a party to the Guaranty and Pledge
Agreement as an Obligor thereunder with the same force and effect as if
originally named therein as an Obligor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of an
Obligor thereunder and expressly grants to the Administrative Agent, for the
benefit of the Guaranteed Creditors, a security interest in all Collateral owned
by such Additional Obligor to secure all of such Additional Obligor’s
obligations and liabilities thereunder.  The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules 1 through 4 to
the Guaranty and Pledge Agreement.  The Additional Obligor hereby represents and
warrants that each of the representations and warranties contained in ARTICLE IV
of the Guaranty and Pledge 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.

 

1

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2.             Governing Law.  This Assumption Agreement shall be governed by,
and construed in accordance with, the laws of the State of Texas.

 

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

 

 

[ADDITIONAL OBLIGOR]

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

2

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

 

Annex II

 

Supplement

 

SUPPLEMENT, dated as of [                 ], 200[   ], made by
[                 ], a [                 ] (the “Additional Pledgor”), in favor
of BNP PARIBAS, as administrative agent (in such capacity, the “Administrative
Agent”) for the Guaranteed Creditors (used herein as defined in the Guaranty and
Pledge Agreement referred to below).  All capitalized terms not defined herein
shall have the meaning ascribed to them in such Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, Whittier Energy Corporation, a Nevada corporation (the “Borrower”), the
Administrative Agent, and certain financial institutions have entered into an
Credit Agreement, dated as of June 15, 2005 (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 Pledgor) have entered into an Guaranty
and Pledge Agreement, dated as of June 15, 2005 (as amended, restated,
supplemented or otherwise modified from time to time, the “Guaranty and Pledge
Agreement”) in favor of the Administrative Agent for the benefit of the
Guaranteed Creditors;

 

WHEREAS, the Credit Agreement requires the Additional Pledgor to pledge the
Equity Interests described hereto on Schedule 2-S; and

 

WHEREAS, the Additional Pledgor has agreed to execute and deliver this
Supplement in order to pledge such Equity Interests;

 

NOW, THEREFORE, IT IS AGREED:

 

1.             Guaranty and Pledge Agreement.  By executing and delivering this
Supplement, the Additional Pledgor, as provided in Section 9.13 of the Guaranty
and Pledge Agreement, hereby becomes a party to the Guaranty and Pledge
Agreement as an Obligor thereunder with the same force and effect as if
originally named as an Obligor therein, and without limiting the generality of
the foregoing, hereby pledges and grants a security interest in (a) the
securities described or referred to in Schedule 2-S and (b) (i) the certificates
or instruments, if any, representing such securities, (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, (vi) all books
and records relating to any of the Property referred to in this definition and
(vii) all proceeds of any of the foregoing (collectively, the “Collateral”). 
Upon execution of this Supplement, such

 

1

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securities will constitute “Pledged Securities” for purposes of the Guaranty and
Pledge Agreement with the same force and effect as if originally listed on
Schedule 2 thereto and, without limiting the generality of the foregoing, the
Additional Pledgor hereby expressly assumes all obligations and liabilities of a
Pledgor thereunder and expressly grants to the Administrative Agent, for the
benefit of the Guaranteed Creditors, a security interest in all Collateral owned
by such Additional Pledgor to secure all of such its obligations and liabilities
thereunder.  The information set forth in Schedule 2-S hereto is hereby added to
the information set forth in Schedule 2 to the Guaranty and Pledge Agreement. 
The Additional Pledgor hereby represents and warrants that each of the
representations and warranties contained in ARTICLE IV of the Guaranty and
Pledge 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.

 

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

 

 

[ADDITIONAL PLEDGOR]

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

2

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