Exhibit 10.2

Execution Version

 

 

 

AMENDED AND RESTATED GUARANTY AND COLLATERAL AGREEMENT

dated as of April 28, 2017

made by

REX ENERGY CORPORATION

and

EACH OF THE OTHER GRANTORS (AS DEFINED HEREIN)

in favor of

ANGELO, GORDON ENERGY SERVICER, LLC,

as Collateral Agent

 

 

 

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TABLE OF CONTENTS

 

         Page   ARTICLE I    DEFINITIONS   

Section 1.01

  Definitions      2  

Section 1.02

  Other Definitional Provisions      6  

Section 1.03

  Rules of Interpretation      6   ARTICLE II    GUARANTEE   

Section 2.01

  Guarantee      6  

Section 2.02

  Right of Contribution      7  

Section 2.03

  No Subrogation      7  

Section 2.04

  Guaranty Amendments, Etc.      7  

Section 2.05

  Waivers      8  

Section 2.06

  Guaranty Absolute and Unconditional      8  

Section 2.07

  Reinstatement      10  

Section 2.08

  Payments      10   ARTICLE III    GRANT OF SECURITY INTEREST   

Section 3.01

  Grant of Security Interest      10  

Section 3.02

  Transfer of Pledged Securities      12   ARTICLE IV    REPRESENTATIONS AND
WARRANTIES   

Section 4.01

  Representations in Credit Agreement      12  

Section 4.02

  Title; No Other Liens      12  

Section 4.03

  Perfected First Priority Liens      13  

Section 4.04

  Grantor Information      13  

Section 4.05

  Inventory and Equipment      13  

Section 4.06

  Farm Products      13  

Section 4.07

  Investment Property      13  

Section 4.08

  Receivables      14  

Section 4.09

  Commercial Tort Claims      14  

Section 4.10

  Benefit to the Guarantors      15  

 

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TABLE OF CONTENTS

(Continued)

 

         Page   ARTICLE V    COVENANTS   

Section 5.01

  Delivery of Instruments, Certificated Securities and Chattel Paper      15  

Section 5.02

  Maintenance of Insurance      15  

Section 5.03

  Payment of Obligations      15  

Section 5.04

  Maintenance of Perfected Security Interest; Further Documentation      15  

Section 5.05

  Investment Property      16  

Section 5.06

  Receivables      18  

Section 5.07

  Commercial Tort Claims      18   ARTICLE VI    REMEDIAL PROVISIONS   

Section 6.01

  Certain Matters Relating to Receivables      18  

Section 6.02

  Communications with Obligors; Grantors Remain Liable      19  

Section 6.03

  Pledged Securities      20  

Section 6.04

  Proceeds to be Turned Over to Collateral Agent      21  

Section 6.05

  Application of Proceeds      21  

Section 6.06

  Code and Other Remedies      21  

Section 6.07

  Registration Rights      23  

Section 6.08

  Deficiency      24  

Section 6.09

  Non-Judicial Enforcement      24   ARTICLE VII    THE COLLATERAL AGENT   

Section 7.01

  Collateral Agent’s Appointment as Attorney-in-Fact, Etc.      24  

Section 7.02

  Duty of Collateral Agent      25  

Section 7.03

  Execution of Financing Statements      26  

Section 7.04

  Authority of Collateral Agent      26   ARTICLE VIII    SUBORDINATION OF
INDEBTEDNESS   

Section 8.01

  Subordination of All Grantor Claims      27  

Section 8.02

  Claims in Bankruptcy      27  

Section 8.03

  Payments Held in Trust      27  

Section 8.04

  Liens Subordinate      27  

Section 8.05

  Notation of Records      28  

 

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TABLE OF CONTENTS

(Continued)

 

         Page   ARTICLE IX    MISCELLANEOUS   

Section 9.01

  No Waiver by Course of Conduct; Cumulative Remedies      28  

Section 9.02

  Notices      28  

Section 9.03

  Enforcement Expenses; Indemnities      28  

Section 9.04

  Amendments in Writing      29  

Section 9.05

  Successors and Assigns      29  

Section 9.06

  Survival; Revival; Reinstatement      29  

Section 9.07

  Counterparts; Integration; Effectiveness      30  

Section 9.08

  Severability      30  

Section 9.09

  Set-Off      30  

Section 9.10

  Governing Law; Submission to Jurisdiction; Waiver of Jury Trial      31  

Section 9.11

  Headings      32  

Section 9.12

  Acknowledgments      32  

Section 9.13

  Additional Grantors and Additional Pledged Securities      33  

Section 9.14

  Releases      33  

Section 9.15

  Acceptance      34  

Section 9.16

  Keepwell      34  

Section 9.17

  Original Guaranty and Collateral Agreement      34  

Section 9.18

  Swap Intercreditor Agreement      35  

 

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TABLE OF CONTENTS

(Continued)

 

SCHEDULES: 1    Notice Addresses 2    Investment Property 3    Perfection
Matters 4    Location of Jurisdiction of Organization and Chief Executive Office
5    Inventory and Equipment Locations 6    Receivables from Government
Authorities ANNEXES: I    Form of Acknowledgment and Consent II    Form of
Assumption Agreement III    Form of Supplement

 

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This AMENDED AND RESTATED GUARANTY AND COLLATERAL AGREEMENT, dated as of
April 28, 2017, is made by Rex Energy Corporation, a corporation duly formed and
existing under the laws of the State of Delaware (the “Borrower”), Rex Energy I,
LLC, a limited liability company duly formed and existing under the laws of the
State of Delaware (“Rex Energy I”), Rex Energy Operating Corp., a corporation
duly formed and existing under the laws of the State of Delaware (“Rex Energy
Operating”), PennTex Resources Illinois, Inc., a corporation duly formed and
existing under the laws of the State of Delaware (“PennTex Resources Illinois”),
Rex Energy IV, LLC, a limited liability company duly formed and existing under
the laws of the State of Delaware (“Rex Energy IV”), R.E. Gas Development, LLC,
a limited liability company formed and existing under the laws of the state of
Delaware (“R.E. Gas”) (the Borrower, Rex Energy I, Rex Energy Operating, PennTex
Resources Illinois, Rex Energy IV, R.E. Gas and any other Person that becomes a
party hereto from time to time after the date hereof as a grantor pursuant to
Section 9.13, the “Grantors”), in favor of Angelo, Gordon Energy Servicer, LLC,
as collateral agent (in such capacity, together with its successors and assigns
in such capacity, the “Collateral Agent”) for the benefit of the Secured Parties
(such capitalized term and other capitalized terms used in this Agreement as
hereinafter defined).

R E C I T A L S

A. The Borrower, Royal Bank of Canada, as administrative agent and certain
lenders party thereto entered into that certain Amended and Restated Credit
Agreement dated as of March 27, 2013 (as heretofore amended, modified or
supplemented, the “Original Credit Agreement”).

B. The grantors party thereto entered into that certain Amended and Restated
Guaranty and Collateral Agreement, dated as of March 27, 2013, to guarantee and
secure the “Indebtedness” under the Original Credit Agreement (as heretofore
amended, modified or supplemented, the “Original Guaranty and Collateral
Agreement”).

C. On even date herewith, the Borrower, Angelo, Gordon Energy Servicer, LLC, as
administrative agent (in such capacity, “Administrative Agent”) and as
Collateral Agent, and the banks and financial institutions (the “Lenders”) party
to that certain Term Loan Credit Agreement dated April 28, 2017 (as amended,
restated, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) are amending and restating the Original Credit
Agreement by executing and delivering the Credit Agreement, pursuant to which,
upon the terms and conditions stated therein, the Lenders have agreed to make
further loans and other extensions of credit to the Borrower.

D. The Loan Parties have entered or may enter from time to time into Secured
Swap Agreements in accordance with, and subject to the terms and conditions of,
the Swap Intercreditor Agreement, in each case secured on a first priority basis
by a Lien on the Collateral pursuant to the terms of this Agreement and the
other Security Instruments, subject to the Swap Intercreditor Agreement and the
Junior Lien Intercreditor Agreement.

E. It is a condition precedent to the obligations of the Lenders to make their
respective extensions of credit to the Borrower under the Credit Agreement and
to the Secured Swap Parties to make their respective extensions of credit to the
Borrower or Guarantors (as

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defined in the Credit Agreement) under the Credit Agreement that the parties
hereto amend and restate the Original Guaranty and Collateral Agreement on the
terms and conditions stated herein.

F. Now, therefore, in consideration of the premises herein and to induce the
Secured Parties to enter into the Secured Documents and to induce the Secured
Parties to make their respective extensions of credit on behalf of the Borrower
or other Loan Parties thereunder, each Grantor hereby agrees with the Collateral
Agent, for the benefit of the Secured Parties, as follows:

ARTICLE I

Definitions

Section 1.01 Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein have the meanings given to them in the Credit Agreement, and all
uncapitalized terms which are defined in the UCC (as defined herein) on the date
hereof are used herein as so defined.

(b) The following terms are used herein as defined in the UCC on the date
hereof: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General
Intangibles, Instruments, Inventory, Letter-of-Credit Rights, Payment
Intangibles, Proceeds, Supporting Obligations, and Tangible Chattel Paper.

(c) The following terms have the following meanings:

“Acknowledgment and Consent” means an Acknowledgment and Consent substantially
in the form attached hereto as Annex I.

“Agreement” means this Amended and Restated Guaranty and Collateral Agreement,
as the same may be amended, restated, amended and restated, supplemented or
otherwise modified from time to time.

“Assumption Agreement” means an Assumption Agreement substantially in the form
attached hereto as Annex II.

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

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

“Collateral Account” means any collateral account established by the Collateral
Agent as provided in Section 6.01 or Section 6.04.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

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“Deposit Account” has the meaning given such term in the UCC of any applicable
jurisdiction and, in any event, including any demand, time, savings, passbook or
like account maintained with a depositary institution.

“Discharge of Secured Obligations” means, subject to Section 9.06(b), the
occurrence of (a) the Discharge of Loan Obligations (as defined in the Swap
Intercreditor Agreement) and (b) the occurrence of the Discharge of Swap
Obligations (as defined in the Swap Intercreditor Agreement).

“Event of Default” has the meaning assigned such term in the Swap Intercreditor
Agreement.

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

“Excluded Swap Obligations” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the guarantee of such Guarantor or the grant
of such security interest becomes effective with respect to such Swap
Obligation. If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such guarantee or security
interest is or becomes illegal.

“Foreign Subsidiary Voting Stock” means the voting Equity Interests of any
Foreign Subsidiary.

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

“Guaranteed Obligations” has the meaning assigned to such term in Section
2.01(a).

“Guarantors” means the collective reference to all Grantors other than the
Borrower.

“Intercompany Note” means any promissory note evidencing loans made by any
Grantor to the Borrower or any of its Subsidiaries.

“Invalidated Payment” has the meaning assigned to such term in Section 9.06(b).

“Investment Property” means the collective reference to (a) all “investment
property” as such term is defined in Section 9-102(a)(49) of the UCC (other than
any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged
Securities”) and (b) whether or not constituting “investment property” as so
defined, all Pledged Notes and all Pledged Securities included in the
Collateral.

“Issuers” means the collective reference to each issuer of any Investment
Property.

 

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“Lien” has the meaning given such term in the Swap Intercreditor Agreement.

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

“LLC Agreement” means each operating agreement relating to an LLC, as each
agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified from time to time.

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

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

“Pledged LLC Interests” means, with respect to any Grantor, all right, title and
interest of such Grantor as a member of all LLCs and all right, title and
interest of such Grantor in, to and under the LLC Agreements; provided that the
term Pledged LLC Interests shall not include any Excluded Collateral.

“Pledged Notes” means all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).

“Pledged Partnership Interests” means, with respect to any Grantor, all right,
title and interest of such Grantor as a limited or general partner in all
Partnerships and all right, title and interest of such Grantor in, to and under
the Partnership Agreements; provided that the term Pledged Partnership Interests
shall not include any Excluded Collateral.

“Pledged Securities” means: (a) the Equity Interests described or referred to in
Schedule 2 (as the same may be supplemented from time to time pursuant to a
Supplement), together with any other Equity Interests of any Person that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect;
provided that in no event shall more than 66% of the total outstanding Foreign
Subsidiary Voting Stock of any Foreign Subsidiary be required to be pledged
hereunder; including, but not limited to, all Pledged LLC Interests and Pledged
Partnership Interests related thereto; and (b) the certificates or instruments,
if any, representing (i) such Equity Interests, (ii) all dividends (cash, Equity
Interests or otherwise), cash, instruments, rights to subscribe, purchase or
sell and all other rights and Property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
securities, (iii) all replacements, additions to and substitutions for any of
the Property referred to in this definition, including 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; provided that the term
Pledged Securities shall not include any Excluded Collateral.

 

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“Proceeds” means all “proceeds” as such term is defined in the UCC on the date
hereof and, in any event, shall include all dividends or other income from the
Pledged Securities, collections thereon or distributions or payments with
respect thereto.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including cash, securities,
accounts and contract rights.

“Qualified ECP Guarantor” means, in respect of any Swap Obligations, each
Grantor that has total assets exceeding $10,000,000 at the time the relevant
guarantee or grant of the relevant security interest becomes effective with
respect to such Swap Obligations or such other person as constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Receivable” means any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including any
Account).

“Secured Documents” means the Principal Agreements (as defined in the Swap
Intercreditor Agreement) and any other document made, delivered or given in
connection with any of the foregoing.

“Secured Obligations” has the meaning assigned to the term “Total Obligations”
in the Swap Intercreditor Agreement.

“Secured Parties” has the meaning given such term in the Swap Intercreditor
Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

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

“Swap Intercreditor Agreement” has the meaning given such term in the Credit
Agreement.

“Swap Obligations” has the meaning given such term in the Swap Intercreditor
Agreement.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York; provided, however, that, if by reason of mandatory provisions
of law, any of the attachment, perfection or priority of the Collateral Agent’s
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, 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.

 

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“Vehicles” means all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any state
and all tires and other appurtenances to any of the foregoing.

Section 1.02 Other Definitional Provisions. Where the context requires, terms
relating to the Collateral or any part thereof, when used in relation to a
Grantor, refer to such Grantor’s Collateral or the relevant part thereof.

Section 1.03 Rules of Interpretation. Section 1.03 and Section 1.04 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 Collateral Agent, for the benefit of the Secured
Parties and each of their respective successors, indorsees, transferees and
assigns, the prompt and complete payment in cash when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations, other than
Excluded Swap Obligations (collectively, the “Guaranteed 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 Secured Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Secured 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 Guaranteed Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Article II or affecting the
rights and remedies of any Secured Party hereunder.

(d) Each Guarantor agrees that if the maturity of the Guaranteed Obligations is
accelerated by bankruptcy or otherwise, such maturity shall also be deemed
accelerated for the purpose of this guarantee without demand or notice to such
Guarantor. Unless released pursuant to Section 9.14, the guarantee of each
Guarantor contained in this Article II shall remain in full force and effect
until the Discharge of Secured Obligations shall have occurred.

(e) No payment made by any Grantor, any other guarantor or any other Person or
received or collected by any Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Guaranteed 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

 

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any payment made by such Guarantor in respect of the Guaranteed Obligations or
any payment received or collected from such Guarantor in respect of the
Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the
maximum liability of such Guarantor hereunder until the Discharge of Secured
Obligations shall have occurred.

Section 2.02 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 2.03. The provisions of
this Section 2.02 shall in no respect limit the obligations and liabilities of
any Guarantor to the Secured Parties, and each Guarantor shall remain liable to
the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

Section 2.03 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by any Secured
Party, no Guarantor shall be entitled to exercise its rights to be subrogated to
any of the rights of any Secured Party against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by any
Secured Party for the payment of the Guaranteed Obligations, nor shall any
Guarantor seek any indemnity, exoneration, participation, contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until the Discharge of Secured Obligations
shall have occurred. If any amount shall be paid to any Guarantor on account of
such subrogation rights at any time prior to the Discharge of Secured
Obligations, such amount shall be held by such Guarantor in trust for the
Secured Parties, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required), to be applied
against the Guaranteed Obligations in accordance with Section 5(c) of the Swap
Intercreditor Agreement (or, if the Swap Intercreditor Agreement has terminated
in accordance with its terms, Section 10.02(c) of the Credit Agreement).

Section 2.04 Guaranty Amendments, Etc.With respect to the Guaranteed
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 Guaranteed Obligations
made by any Secured Party may be rescinded by such Secured Party or otherwise
and any of the Guaranteed Obligations continued; (b) the Guaranteed Obligations,
the liability of any other Person upon or for any part thereof or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by, or any indulgence
or forbearance in respect thereof granted by, any Secured Party; (c) any Secured
Document may be amended, modified, supplemented or terminated, in whole or in
part, as the Secured Parties may deem advisable from time to time; (d) any
collateral security, guarantee or right of offset at any time held by any
Secured Party for the payment of the Guaranteed Obligations may be sold,
exchanged, waived, surrendered or released; (e) any additional

 

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guarantors, makers or endorsers of the Guaranteed Obligations may from time to
time be obligated on the Guaranteed Obligations or any additional security or
collateral for the payment and performance of the Guaranteed Obligations may
from time to time secure the Guaranteed Obligations; or (f) any other event
shall occur which constitutes a defense or release of sureties generally (other
than a defense of payment or performance). No Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Secured 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 Guaranteed Obligations and
notice of or proof of reliance by any Secured Party upon the guarantee contained
in this Article II or acceptance of the guarantee contained in this Article II;
the Guaranteed 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 Guaranteed Obligations or any extension of credit
already or hereafter contracted by or extended to the Borrower need be given to
any Guarantor; and all dealings between the Borrower and any of the Guarantors,
on the one hand, and the Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Article II. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Guaranteed
Obligations.

Section 2.06 Guaranty Absolute and Unconditional.

(a) Each Guarantor understands and agrees that the guarantee contained in this
Article II is, and shall be construed as, a continuing, completed, absolute and
unconditional guarantee of payment, and each Guarantor hereby waives any defense
of a surety or guarantor or any other obligor on any obligations arising in
connection with or in respect of any of the following and hereby agrees that its
obligations hereunder shall not be discharged or otherwise affected as a result
of any of the following:

(i) the invalidity or unenforceability of any Secured Document, any of the
Guaranteed Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
any Secured Party;

(ii) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against any Secured Party;

(iii) the insolvency, bankruptcy arrangement, reorganization, adjustment,
composition, liquidation, disability, dissolution or lack of power of the
Borrower or any other Guarantor or any other Person at any time liable for the
payment of all or part of the Guaranteed Obligations, including any discharge
of, or bar or stay against collecting, any Guaranteed Obligation (or any part of
them or interest therein) in or as a result of such proceeding;

 

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(iv) any sale, lease or transfer of any or all of the assets of the Borrower or
any other Guarantor, or any changes in the shareholders of the Borrower or any
other Guarantor;

(v) any change in the corporate existence (including its constitution, laws,
rules, regulations or power), structure or ownership of any Grantor or in the
relationship between the Borrower and any Grantor;

(vi) the fact that any Collateral or Lien contemplated or intended to be given,
created or granted as security for the repayment of the Guaranteed 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 Guaranteed Obligations;

(vii) the absence of any attempt to collect the Guaranteed Obligations or any
part of them from any Grantor;

(viii) (A) any Secured Party’s election, in any proceeding instituted under
chapter 11 of the Bankruptcy Code, of the application of Section 1111(b)(2) of
the Bankruptcy Code; (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 Secured Party’s claim (or claims) for repayment of
the Guaranteed 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 Secured Parties or any of them for any reason; or (G) failure by
any Secured Party to file or enforce a claim against the Borrower or its estate
in any bankruptcy or insolvency case or proceeding; or

(ix) any other circumstance or act whatsoever, including any action or omission
of the type described in Section 2.04 (with or without notice to or knowledge of
the Borrower or such Guarantor), which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Guaranteed
Obligations, or of such Guarantor under the guarantee contained in this Article
II, in bankruptcy or in any other instance (other than a defense of payment or
performance).

(b) When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, any Secured Party may, but shall be
under no obligation to, join or make a similar demand on or otherwise pursue or
exhaust such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Guaranteed Obligations or any right of offset with respect thereto, and
any failure by any Secured Party to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any

 

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obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of any
Secured Party against any Guarantor. For 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 Guaranteed Obligations is rescinded
or must otherwise be restored or returned by any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its Property, or otherwise,
all as though such payments had not been made.

Section 2.08 Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Collateral Agent, for the benefit of the Secured Parties, in
accordance with the terms and conditions of the Swap Intercreditor Agreement,
without set-off, deduction or counterclaim, in dollars, in immediately available
funds, at the offices of the Collateral Agent.

ARTICLE III

Grant of Security Interest

Section 3.01 Grant of Security Interest. Each Grantor hereby pledges to the
Collateral Agent, and hereby grants to the Collateral Agent, for the benefit of
the Secured Parties, a continuing security interest in, lien on and right of
setoff against, all of the following Property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest and whether now existing or
hereafter coming into existence (collectively, the “Collateral”), as security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of such Grantor’s Secured
Obligations:

(a) all Accounts;

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

(c) all Commercial Tort Claims (including with respect to the matters set forth
on Schedule 3);

(d) all Deposit Accounts;

(e) all Documents;

(f) all Equipment;

(g) all Fixtures;

(h) all General Intangibles (including all rights in and under Swap Agreements);

 

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(i) all Instruments;

(j) all intellectual property;

(k) all Inventory;

(l) all Investment Property;

(m) all Letter-of-Credit Rights (whether or not the letter of credit is
evidenced by a writing);

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

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

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

provided, however, notwithstanding anything to the contrary contained herein,
“Collateral” shall not include, and this Agreement shall not constitute a grant
of a security interest in: (a) any property to the extent that such grant of a
security interest is prohibited by any applicable law or regulation of a
Governmental Authority to which such Grantor or its property is subject, or
constitutes a breach or default under or results in the termination of or
requires any consent not obtained under, any license or contract evidencing or
giving rise to such property, except to the extent that the term in such law,
regulation, license or contract providing for such prohibition, breach, default
or termination or requiring such consent is ineffective under Section 9-406,
9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of
any relevant jurisdiction or any other applicable law (including the United
States Bankruptcy Code) or principles of equity; provided, however, that such
security interest shall attach immediately at such time as such prohibition,
breach, default or termination is no longer applicable or is waived, and to the
extent severable, shall attach immediately to any portion of the Collateral that
does not result in such consequences; (b) Excluded Deposit Accounts, the
Pre-Funded ACH Funds (as defined in each Blocked Account Agreement entered into
on the date hereof between any Loan Party and Manufacturers and Traders Trust
Company), and, to the extent not Deposit Accounts, certificates of deposit in an
aggregate amount not to exceed $125,000 pledged to secure the Loan Parties’
obligations in respect of their corporate credit card program; (c) any Vehicles;
(d) 34% of the Foreign Subsidiary Voting Stock in each direct Foreign Subsidiary
of such Grantor that is a “controlled foreign corporation” under the Code; or
(e) Equity Interests in each of RW Gathering, LLC and Charlie Brown Air II, LLC
so long as such entity is not a wholly-owned subsidiary of a Grantor (clauses
(a) through (e) collectively, “Excluded Collateral”). For the avoidance of
doubt, notwithstanding clauses (a), (b), (c), (d) and (e) of the preceding
sentence, “Collateral” shall include (and therefore, the following shall not
constitute Excluded Collateral) (i) all Equity Interests in Subsidiaries of the
Borrower (other than the Equity Interests described in clauses (d) and (e) to
the extent set forth therein) and (ii) the right to any distributions (whether
periodic or in liquidation or dissolution) with respect to any Equity Interests,
including limited partnership interests or limited liability company member
interests.

 

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Section 3.02 Transfer of Pledged Securities. All certificates or instruments
representing or evidencing the Pledged Securities shall be delivered to and held
pursuant hereto by the Collateral Agent or a Person designated by the Collateral
Agent and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank, and
accompanied by any required transfer tax stamps to effect the pledge of the
Pledged Securities to the Collateral Agent. Notwithstanding the preceding
sentence, at the Collateral Agent’s discretion, all Pledged Securities must be
delivered or transferred in such manner as to permit the Collateral Agent to be
a “protected purchaser” to the extent of its security interest as provided in
Section 8-303 of the UCC (if the Collateral Agent otherwise qualifies as a
protected purchaser). During the continuance of an Event of Default, the
Collateral 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 Collateral Agent or any
of its nominees any or all of the Pledged Securities, subject only to the
revocable rights of the relevant Grantor specified in Section 6.03. In addition,
during the continuance of an Event of Default, the Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing Pledged Securities for certificates or instruments of smaller or
larger denominations.

ARTICLE IV

Representations and Warranties

To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective loans to and
extensions of credit to the Borrower thereunder, to induce the Issuing Bank to
issue Letters of Credit and to induce the Secured Swap Parties to enter into
Secured Swap Agreements with the Borrower and its Subsidiaries, the Borrower
and, solely with respect to itself and as applicable, each other Grantor hereby
represents and warrants, on and as of the date hereof and each date to the
extent required by Sections 2.05, 6.01 and 6.02 of the Credit Agreement (in each
case, except to the extent any such representations and warranties are expressly
limited to an earlier date in which case, such representations and warranties
shall continue to be true and correct as of such specified earlier date), to the
Collateral Agent that:

Section 4.01 Representations in Credit Agreement. In the case of each Grantor
other than the Borrower, the representations and warranties set forth in Article
VII of the Credit Agreement as they relate to such Grantor or to the Loan
Documents to which such Grantor is a party, each of which is hereby incorporated
by reference, are true and correct, and the Administrative Agent, the Collateral
Agent, the Lenders and the Issuing Bank shall be entitled to rely on each of
them, provided that each reference in each such representation and warranty to
the Borrower’s knowledge shall, for the purposes of this Section 4.01, be deemed
to be a reference to such Grantor’s knowledge.

Section 4.02 Title; No Other Liens. Except for the security interest granted to
the Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by the Credit
Agreement, such Grantor owns each item of the Collateral free and clear of any
and all Liens or claims of others. For the avoidance of

 

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doubt, it is understood and agreed that any Grantor may, as part of its
business, grant licenses to third parties to use intellectual property owned or
developed by a Grantor. For purposes of this Agreement and the other Secured
Documents, such licensing activity shall not constitute a “Lien” on such
intellectual property. Each of the Collateral Agent and each other Secured Party
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Collateral Agent to
utilize, sell, lease or transfer the related intellectual property or otherwise
realize value from such intellectual property pursuant hereto.

Section 4.03 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Collateral Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral which may be perfected by filing or such
other action in favor of the Collateral Agent, for the benefit of the Secured
Parties, as collateral security for such Grantor’s Secured Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
and (b) are prior to all other Liens on the Collateral in existence on the date
hereof except for Liens permitted pursuant to Section 9.03 of the Credit
Agreement.

Section 4.04 Grantor Information. On the date hereof, the correct legal name of
such Grantor, all names and trade names that such Grantor has used in the last
five years, such Grantor’s jurisdiction of organization and each jurisdiction of
organization of such Grantor over the last five years, such Grantor’s
organizational number (if any), taxpayer identification number, and the
location(s) of such Grantor’s chief executive office or sole place of business
or principal residence, as the case may be, over the last five years are
specified on Schedule 4. Such Grantor has furnished to the Collateral Agent a
certified charter, certificate of incorporation or other organization document
and long-form good standing certificate as of a date which is recent to the date
hereof.

Section 4.05 Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5, other than Inventory or Equipment of an immaterial value or nature or that is
out for repair, purchased but not yet delivered, or in transit to a purchaser or
to one or more of the locations listed in Schedule 5.

Section 4.06 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

Section 4.07 Investment Property.

(a) As of the date hereof, the Pledged Securities required to be pledged
hereunder and under the Credit Agreement by such Grantor are listed in Schedule
2. The shares of Pledged Securities pledged by such Grantor hereunder constitute
all the issued and outstanding shares of all classes of the Equity Interests of
each Issuer owned by such Grantor which is a Domestic Subsidiary of such Grantor
and 66% of the issued and outstanding shares of all classes of the Equity
Interests of each Issuer owned by such Grantor which is a Foreign

 

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Subsidiary. All the shares of the Pledged Securities have been duly and validly
issued and are fully paid and nonassessable; and such Grantor is the record and
beneficial owner of, and has good and marketable title to, the Investment
Property pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other Person, except the security interest created by this
Agreement, and has rights in or the power to transfer the Investment Property in
which a Lien is granted by it hereunder, free and clear of any Lien.

(b) There are no restrictions on transfer (that have not been waived or
otherwise consented to) in the LLC Agreement governing any Pledged LLC Interest
or the Partnership Agreement governing any Pledged Partnership Interest or any
other agreement relating thereto which would limit or restrict: (i) the grant of
a security interest in the Pledged LLC Interests or 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 or the Pledged Partnership Interests, in each case, as contemplated by
this Agreement. Upon the exercise of remedies in respect of the Pledged LLC
Interests or the Pledged Partnership Interests as provided for herein and
otherwise as required by then applicable law, a transferee or assignee of a
membership interest or a partnership interest, as the case may be, of such LLC
or Partnership, as the case may be, shall become a member or partner, as the
case may be, of such LLC or Partnership, as the case may be, entitled to
participate in the management thereof to the extent immediately theretofore held
by the assignor or transferor, as the case may be, and, upon the transfer of the
entire interest of such Grantor, such Grantor shall cease to be a member or
partner, as the case may be.

(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

Section 4.08 Receivables.

(a) No amount payable to such Grantor under or in connection with any Receivable
is evidenced by any Instrument or Chattel Paper in an amount in excess of
$50,000 which has not been delivered to the Collateral Agent in accordance with
the terms of Section 5.01.

(b) On the date hereof, none of the obligors on any Receivables is a
Governmental Authority, except as disclosed on Schedule 6.

(c) The amounts represented by such Grantor to the Lenders from time to time as
owing to such Grantor in respect of the Receivables will at such times be
accurate.

Section 4.09 Commercial Tort Claims.

(a) On the date hereof, except to the extent listed in Schedule 3, no Grantor
has rights in any Commercial Tort Claim with an asserted value in excess of
$1,000,000.

 

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(b) Upon the filing of a financing statement covering any Commercial Tort Claim
referred to in Section 5.07 against such Grantor in the jurisdiction specified
in Schedule 3 hereto, the security interest granted in such Commercial Tort
Claim will constitute a valid perfected security interest in favor of the
Collateral Agent, for the benefit of the Secured Parties, as collateral security
for such Grantor’s Secured Obligations, enforceable in accordance with the terms
hereof against all creditors of such Grantor and any Persons purporting to
purchase such Collateral from such Grantor, which security interest shall be
prior to all other Liens on such Collateral except for unrecorded liens
permitted by the Credit Agreement which have priority over the Liens on such
Collateral by operation of law.

Section 4.10 Benefit to the Guarantors. The Borrower is a member of an
affiliated group of companies that includes such Grantor, and the Borrower and
the other Grantors are engaged in related businesses. Such Grantor may
reasonably be expected to benefit, directly or indirectly, from the
Transactions; and such Grantor has determined that this Agreement is necessary
and convenient to the conduct, promotion and attainment of the business of such
Grantor.

ARTICLE V

Covenants

Each Grantor covenants and agrees with the Collateral Agent that, from and after
the date of this Agreement until Discharge of Secured Obligations shall have
occurred:

Section 5.01 Delivery of Instruments, Certificated Securities and Chattel Paper.
If any amount payable under or in connection with any of the Collateral shall be
or become evidenced by any Instrument, Certificated Security or Chattel Paper,
such Instrument, Certificated Security or Chattel Paper shall be promptly
delivered to the Collateral Agent, duly indorsed in a manner reasonably
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement. Notwithstanding the foregoing, the Borrower shall not be required to
deliver such Instrument, Certificated Security or Chattel Paper to the
Collateral Agent as set forth in the immediately preceding sentence if the value
of an Instrument, Certificated Security or Chattel Paper is less than $50,000 or
if the aggregate value of all such Instruments, Certificated Securities and
Chattel Paper is less than $200,000.

Section 5.02 Maintenance of Insurance. Each Grantor agrees to maintain insurance
on the Collateral as set forth in Section 8.07 of the Credit Agreement (as in
effect on the date hereof, without giving effect to any amendments,
modifications, waivers, terminations or repayments thereof).

Section 5.03 Payment of Obligations. Each Grantor agrees to comply with the
provisions of Section 8.04 of the Credit Agreement with respect to its payment
obligations in the same manner as the Borrower is required thereunder (as in
effect on the date hereof, without giving effect to any amendments,
modifications, waivers, terminations or repayments thereof).

Section 5.04 Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.03

 

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and shall defend such security interest against the claims and demands of all
Persons whomsoever, subject to the rights of such Grantor under the Secured
Documents to dispose of the Collateral.

(b) Such Grantor or the Borrower will furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the assets
and property of such Grantor and such other reports in connection therewith, in
each case as the Collateral Agent may reasonably request, all in reasonable
detail.

(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
reasonably requests for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including
(i) delivering certificated securities, (ii) filing any financing or
continuation statements under the UCC (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby and (iii) in
the case of Investment Property, Deposit Accounts, Letter-of-Credit Rights and
any other relevant Collateral, taking any actions necessary to enable the
Collateral Agent to obtain “control” (within the meaning of the applicable UCC)
with respect thereto.

Section 5.05 Investment Property.

(a) If such Grantor shall become entitled to receive or shall receive any
certificate (including any certificate representing a dividend or a distribution
in connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Equity Interests of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Securities, or otherwise in respect thereof, such Grantor shall accept
the same as the agent of the Secured Parties, hold the same in trust for the
Secured Parties, segregated from other Property of such Grantor, and deliver the
same forthwith to the Collateral Agent in the exact form received, duly indorsed
by such Grantor to the Collateral Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Collateral Agent so requests, signature guaranteed, to be held by
the Collateral Agent, subject to the terms hereof, as additional collateral
security for the Secured Obligations (except, in each case, to the extent
Excluded Collateral). Any sums paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer shall, unless (only
so long as no Event of Default exists) otherwise subject to a perfected security
interest in favor of the Collateral Agent, be paid over to the Collateral Agent
to be held by it hereunder as additional collateral security for the Secured
Obligations, and in case any distribution of capital shall be made on or in
respect of the Investment Property or any property shall be distributed upon or
with respect to the Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Collateral Agent, be delivered to
the Collateral Agent to be held by it hereunder as additional collateral
security for the Secured Obligations (except, in each case, to the extent
Excluded Collateral). If any sums of money or property so paid or distributed in
respect of the Investment Property (that is Collateral) shall be

 

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received by such Grantor, such Grantor shall, unless (only so long as no Event
of Default exists) otherwise subject to a perfected security interest in favor
of the Collateral Agent, until such money or property is paid or delivered to
the Collateral Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Secured Obligations.

(b) Without the prior written consent of the Collateral Agent, such Grantor will
not (i) unless otherwise expressly permitted hereby or under the other Loan
Documents, vote to enable, or take any other action to permit, any Issuer to
issue any Equity Interests of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any Equity
Interests of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Investment
Property or Proceeds thereof (except pursuant to a transaction expressly
permitted, or if not directly addressed therein, not prohibited, by the Credit
Agreement or the Swap Intercreditor Agreement), (iii) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Investment Property or Proceeds thereof, or any interest therein,
except for the security interests created by this Agreement and security
interests expressly permitted pursuant to Section 9.03 of the Credit Agreement;
or (iv) enter into any agreement or undertaking restricting the right or ability
of such Grantor or the Collateral Agent to sell, assign or transfer any of the
Investment Property or Proceeds thereof except as expressly permitted pursuant
to Section 9.16 of the Credit Agreement.

(c) In the case of each Grantor that is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Collateral Agent promptly in writing
of the occurrence of any of the events described in Section 5.05(a) with respect
to the Investment Property issued by it and (iii) the terms of Section 6.03(c)
and Section 6.07 shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.03(c) or Section 6.07
with respect to the Investment Property issued by it. In the case of any Issuer
that is not a Grantor hereunder, such Grantor shall promptly cause such Issuer
to execute and deliver to the Collateral Agent an Acknowledgment and Consent.

(d) In the case of each Grantor that is a partner in a Partnership, such Grantor
hereby consents to the extent required by the applicable Partnership Agreement
to the pledge by each other Grantor, pursuant to the terms hereof, of the
Pledged Partnership Interests in such Partnership and to the transfer of such
Pledged Partnership Interests to the Collateral Agent or its nominee and to the
substitution of the Collateral Agent or its nominee as a substituted partner in
such Partnership with all the rights, powers and duties of a general partner or
a limited partner, as the case may be. In the case of each Grantor that is a
member of an LLC, such Grantor hereby consents to the extent required by the
applicable LLC Agreement to the pledge by each other Grantor, pursuant to the
terms hereof, of the Pledged LLC Interests in such LLC and to the transfer of
such Pledged LLC Interests to the Collateral Agent or its nominee and to the
substitution of the Collateral Agent or its nominee as a substituted member of
the LLC with all the rights, powers and duties of a member of such LLC.

 

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(e) Without the prior written consent of the Collateral Agent, such Grantor
shall not agree to any amendment of a Partnership Agreement or an LLC Agreement
that (i) in any way adversely affects the perfection of the security interest of
the Collateral Agent in the Pledged Partnership Interests or Pledged LLC
Interests pledged by such Grantor hereunder or (ii) causes any Partnership
Agreement or LLC Agreement to include an election to treat the membership
interests or partnership interests of such Grantor as a security under
Section 8-103 of the UCC.

(f) With respect to Equity Interests in certificated form, such Grantor shall
furnish to the Collateral Agent such stock or equity powers and other
instruments as may be required by the Collateral Agent to assure the
transferability of the Investment Property when and as often as may be
reasonably requested by the Collateral Agent.

(g) The Pledged Securities set forth on Schedule 2 will at all times constitute
not less than 100% of the Equity Interests of each Issuer which is a Domestic
Subsidiary and not less than 66% of the Equity Interests of each Issuer which is
a Foreign Subsidiary thereof, in each case, owned by such Grantor. Such Grantor
will not permit any Issuer of any of the Pledged Securities set forth on
Schedule 2 to issue any new shares of any class of Equity Interests of such
Issuer to any party other than such Grantor (unless such issuance is made on a
pro rata basis to such Grantor) without the prior written consent of the
Collateral Agent (not to be unreasonably withheld, delayed or conditioned).

Section 5.06 Receivables.

(a) Other than in the ordinary course of business consistent with its past
practice or, so long as no Event of Default exists, as is appropriate in the
good faith business judgment of the applicable Grantor, such Grantor will not
(i) grant any extension of the time of payment of any Receivable,
(ii) compromise or settle any Receivable for less than the full amount thereof,
(iii) release, wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable or
(v) amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.

(b) Such Grantor will deliver to the Collateral Agent a copy of each material
written demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables.

Section 5.07 Commercial Tort Claims. If such Grantor shall obtain an interest in
any Commercial Tort Claim with an asserted value in excess of $1,000,000, such
Grantor shall within 30 days of obtaining such interest sign and deliver
documentation acceptable to the Collateral Agent that grants a security interest
under the terms and provisions of this Agreement in and to such Commercial Tort
Claim.

ARTICLE VI

Remedial Provisions

Section 6.01 Certain Matters Relating to Receivables. At any time during the
occurrence and continuation of an Event of Default:

(a) The Collateral Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Collateral Agent may require in connection with such test verifications. At
any time and from time to time, upon the Collateral Agent’s request and at the
expense of the relevant Grantor, such Grantor shall cause its independent public
accountants or others reasonably satisfactory to the Collateral Agent to furnish
to the Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.

 

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(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor’s Receivables, subject to the Collateral Agent’s direction and control,
and the Collateral Agent may curtail or terminate said authority at any time
during the occurrence and continuance of an Event of Default. If required by the
Collateral Agent at any time during the occurrence and continuance of an Event
of Default, any payments of Receivables, when collected by any Grantor,
(i) shall be forthwith (and, in any event, within two Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Secured Parties only as provided in
Section 6.05, and (ii) until so turned over, shall be held by such Grantor in
trust for the Collateral Agent and the Secured Parties, segregated from other
funds of such Grantor. Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.

(c) At the Collateral Agent’s request, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Receivables, including
all original orders, invoices and shipping receipts.

Section 6.02 Communications with Obligors; Grantors Remain Liable.

(a) The Collateral Agent at any time during the occurrence and continuance of an
Event of Default in its own name or in the name of others may at any time
communicate with obligors under the Receivables to verify with them to the
Collateral Agent’s satisfaction the existence, amount and terms of any
Receivables.

(b) Upon the request of the Collateral Agent at any time during the occurrence
and continuance of an Event of Default, each Grantor shall notify obligors on
the Receivables that the Receivables have been assigned to the Collateral Agent
for the benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Collateral Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise thereto. Neither the Collateral
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) or Contract by reason of or
arising out of this Agreement or the receipt by the Collateral Agent or any
Secured Party of any payment relating thereto, nor shall the Collateral Agent or
any Secured

 

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Party be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

Section 6.03 Pledged Securities.

(a) Unless an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have given notice to the relevant Grantor of the
Collateral Agent’s intent to exercise its corresponding rights pursuant to
Section 6.03(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Pledged Securities and all payments made in respect of
the Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted in
the Credit Agreement, and to exercise all voting and corporate or other
organizational rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate or other organizational right
exercised or other action taken which, in the Collateral Agent’s reasonable
judgment, would impair the Collateral or which would be inconsistent with or
result in any violation of any provision of the Credit Agreement, this Agreement
or any other Secured Document.

(b) If an Event of Default shall occur and be continuing and the Collateral
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, during the pendancy of such Event of Default, (i) the
Collateral Agent shall have the right to receive any and all cash dividends,
payments or other Proceeds paid in respect of the Investment Property and make
application thereof to the Secured Obligations in accordance with Section 5(c)
of the Swap Intercreditor Agreement (or, if the Swap Intercreditor Agreement has
terminated in accordance with its terms, Section 10.02(c) of the Credit
Agreement), and (ii) any or all of the Investment Property shall be registered
in the name of the Collateral Agent or its nominee, and the Collateral Agent or
its nominee may during the pendancy of such Event of Default exercise (A) all
voting, corporate and other rights pertaining to such Investment Property at any
meeting of shareholders of the relevant Issuer or Issuers or otherwise and
(B) any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Investment Property as if it
were the absolute owner thereof (including the right to exchange at its
discretion any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate or other organizational structure of any Issuer, or upon the
exercise by any Grantor or the Collateral Agent of any right, privilege or
option pertaining to such Investment Property, and in connection therewith, the
right to deposit and deliver any and all of the Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it, but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.

(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment
Property pledged by such Grantor hereunder to (i) comply with any instruction

 

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received by it from the Collateral Agent in writing that (A) states that an
Event of Default has occurred and is continuing and (B) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent.

Section 6.04 Proceeds to be Turned Over to Collateral Agent. In addition to the
rights of the Collateral Agent and the Secured Parties specified in Section 6.01
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, subject to the Swap Intercreditor Agreement, all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by such Grantor in trust for the Collateral Agent and the Secured
Parties, segregated from other funds of such Grantor, and shall, if the
Collateral Agent so requests, forthwith upon receipt by such Grantor, be turned
over to the Collateral Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Collateral Agent, if required). All such
Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Collateral Account maintained under its sole dominion and
control. All such Proceeds while held by the Collateral Agent in a Collateral
Account (or by such Grantor in trust for the Collateral Agent and the Secured
Parties) shall continue to be held as collateral security for all the Secured
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.05.

Section 6.05 Application of Proceeds. If an Event of Default shall have occurred
and be continuing, at any time at the Collateral Agent’s election in accordance
with the terms and conditions of the Swap Intercreditor Agreement, the
Collateral Agent may apply all or any part of Proceeds constituting Collateral,
whether or not held in any Collateral Account, and any proceeds of the guarantee
set forth in Article II, in payment of the Secured Obligations in accordance
with Section 5(c) of the Swap Intercreditor Agreement (or, if the Swap
Intercreditor Agreement has terminated in accordance with its terms, Section
10.02(c) of the Credit Agreement).

Section 6.06 Code and Other Remedies.

(a) If an Event of Default shall occur and be continuing, the Collateral Agent,
on behalf of the Secured Parties, may exercise, in addition to all other rights
and remedies granted to the Collateral Agent or the Secured Parties in this
Agreement, the other Secured Documents and in any other instrument or agreement
securing, evidencing or relating to the Secured 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 Collateral Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker’s board or office of any Secured Party or

 

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elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Any Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the
Collateral Agent’s request, to assemble the Collateral and make it available to
the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor’s premises or elsewhere. Any such sale or
transfer by the Collateral Agent either to itself or to any other Person shall
be absolutely free from any claim of right by any Grantor, including any equity
or right of redemption, stay or appraisal which any Grantor has or may have
under any rule of law, regulation or statute now existing or hereafter adopted
(and each Grantor hereby waives any rights it may have in respect thereof). Upon
any such sale or transfer, the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser or transferee thereof the Collateral so
sold or transferred. The Collateral Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.06, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Collateral Agent and the Secured Parties
hereunder, including reasonable attorneys’ fees and disbursements, to the
payment in whole or in part of the Secured Obligations, in accordance with
Section 5(c) of the Swap Intercreditor Agreement (or, if the Swap Intercreditor
Agreement has terminated in accordance with its terms, Section 10.02(c) of the
Credit Agreement), and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law, including
Section 9-615(a)(3) of the UCC, need the Collateral Agent account for the
surplus, if any, to any Grantor. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against the
Collateral Agent or any Secured Party arising out of the exercise by them of any
rights hereunder except to the extent caused by the gross negligence, willful
misconduct or material breach of agreement of the Collateral Agent or such
Secured Party or their respective agents. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

(b) If the Collateral Agent elects not to sell the Collateral, the Collateral
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 Secured Obligations. Each
and every method of disposition of the Collateral described in this Agreement
shall constitute a commercially reasonable method of disposition. Without
limitation of the foregoing, any disposition involving three (3) or more bidders
that are “accredited investors” (within the meaning of the Securities Act) shall
constitute disposition in a commercially reasonable manner.

(c) The Collateral 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 6.07 Registration Rights.

(a) If the Collateral Agent shall determine to exercise its right to sell any or
all of the Pledged Securities pursuant to Section 6.06, and if in the opinion of
the Collateral Agent it is necessary or advisable to have the Pledged
Securities, or that portion thereof to be sold, registered under the provisions
of the Securities Act, the relevant Grantor will use commercially reasonable
efforts to cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the reasonable opinion of the Collateral Agent, necessary or advisable to
register the Pledged Securities, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its commercially reasonable efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of the Pledged Securities, or that portion thereof to be sold and
(iii) use its commercially reasonable efforts to cause the Issuer to make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Collateral Agent, are necessary or advisable to enable it to realize upon such
Collateral, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto. Each Grantor agrees to use its commercially reasonable efforts to cause
such Issuer to comply with the provisions of the securities or “Blue Sky” laws
of any and all jurisdictions which the Collateral Agent shall designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.

(b) Each Grantor recognizes that the Collateral Agent may be unable to effect a
public sale of any or all the Pledged Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, or may determine that a public sale is impracticable or not
commercially reasonable, and, accordingly, may resort to one or more private
sales thereof to a restricted group of purchasers which will be obliged to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

(c) Each Grantor agrees to use its commercially reasonable efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Securities pursuant to this
Section 6.07 valid and binding and in compliance with any and all other
applicable Governmental Requirements. Each Grantor further agrees that a breach
of any of the covenants contained in this Section 6.07 will cause irreparable
injury to the Secured Parties, that the Secured Parties have no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 6.07 shall be specifically enforceable
against such Grantor, and, to the maximum extent permitted by applicable law,
such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.

 

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Section 6.08 Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Secured Obligations and the fees and disbursements of any attorneys
employed by the Collateral Agent or any other Secured Party to collect such
deficiency.

Section 6.09 Non-Judicial Enforcement. The Collateral Agent may enforce its
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law, each Grantor expressly waives any and all legal rights
which might otherwise require the Collateral Agent to enforce its rights by
judicial process.

ARTICLE VII

The Collateral Agent

Section 7.01 Collateral Agent’s Appointment as Attorney-in-Fact, Etc.

(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral
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 Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:

(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Receivable or Contract or
with respect to any other Collateral and file any claim or take any other action
or proceeding in any court of law or equity or otherwise deemed appropriate by
the Collateral Agent for the purpose of collecting any and all such moneys due
under any Receivable or Contract or with respect to any other Collateral
whenever payable;

(ii) in the case of any intellectual property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Collateral Agent may request to evidence the Collateral Agent’s and the other
Secured Parties’ security interest in such intellectual property and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;

(iii) pay or discharge Taxes and Liens levied or placed on or threatened against
the Collateral, effect any repairs or any insurance called for by the terms of
this Agreement or any other Secured Document and pay all or any part of the
premiums therefor and the costs thereof;

(iv) execute, in connection with any sale provided for in Section 6.06 or
Section 6.07, any indorsements, assignments or other instruments of conveyance
or transfer with respect to the Collateral; and

 

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(v) (A) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Collateral Agent or as the Collateral Agent shall direct; (B) ask or demand
for, collect, and receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of or arising out
of any Collateral; (C) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (D) in the name of such Grantor, or in its own name, or
otherwise, commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any Collateral;
(E) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (F) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Collateral Agent may deem appropriate; and (G) 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 Collateral Agent
were the absolute owner thereof for all purposes, and do, at the Collateral
Agent’s option and such Grantor’s expense, at any time, or from time to time,
all acts and things which the Collateral Agent deems necessary to protect,
preserve or realize upon the Collateral and the Collateral Agent’s and the other
Secured Parties’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 7.01(a) to the contrary notwithstanding, the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.01(a) unless an Event of Default shall have
occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) The expenses of the Collateral Agent incurred in connection with actions
undertaken as provided in this Section 7.01, together with interest thereon at
the post-default rate specified in Section 3.02(b) of the Credit Agreement, but
in no event to exceed the Highest Lawful Rate, from the date of payment by the
Collateral Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Collateral Agent on demand.

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

Section 7.02 Duty of Collateral Agent. The Collateral 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 Collateral Agent deals with similar Property
for its own account, and the Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which comparable secured parties accord comparable collateral. Neither the
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Party nor any of their Related Parties shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Collateral Agent and the other Secured Parties hereunder are
solely to protect the Collateral Agent’s and the other Secured Parties’
interests in the Collateral and shall not impose any duty upon the Collateral
Agent or any other Secured Party to exercise any such powers. The Collateral
Agent and the other Secured Parties shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their Related Parties shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct. To the fullest extent permitted by applicable law, the
Collateral 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 Secured
Obligations, or to take any steps necessary to preserve any rights against any
Grantor or other Person or ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not it has or is deemed to have knowledge of such
matters. Each Grantor, to the extent permitted by applicable law, waives any
right of marshaling in respect of any and all Collateral, and waives any right
to require the Collateral Agent or any other Secured Party to proceed against
any Grantor or other Person, exhaust any Collateral or enforce any other remedy
which the Collateral Agent or any other Secured Party now has or may hereafter
have against any Grantor or other Person.

Section 7.03 Execution of Financing Statements. Pursuant to the UCC and any
other applicable law, each Grantor authorizes the Collateral Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Collateral Agent determines appropriate
to perfect the security interests of the Collateral Agent under this Agreement.
A photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction. Each Grantor authorizes the Collateral
Agent to use the collateral description “all personal property” or “all assets”
in any such financing statements. Each Grantor hereby ratifies and authorizes
the filing by the Collateral Agent of any financing statement with respect to
the Collateral made prior to the date hereof.

Section 7.04 Authority of Collateral Agent. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral 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 Collateral Agent and the other
Secured Parties, be governed by the Credit Agreement and the Swap Intercreditor
Agreement, but, as between the Collateral Agent and the Grantors, the Collateral
Agent shall be conclusively presumed to be acting as agent for the other Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.

 

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ARTICLE VIII

Subordination of Indebtedness

Section 8.01 Subordination of All Grantor Claims. As used herein, the term
“Grantor Claims” shall mean all debts and obligations of the Borrower or any
other Grantor to any other Grantor, whether such debts and obligations now exist
or are hereafter incurred or arise, or whether the obligation of the debtor
thereon be direct, contingent, primary, secondary, several, joint and several,
or otherwise, and irrespective of whether such debts or obligations be evidenced
by note, contract, open account, or otherwise, and irrespective of the Person or
Persons in whose favor such debts or obligations may, at their inception, have
been, or may hereafter be created, or the manner in which they have been or may
hereafter be acquired by. During the continuation of an Event of Default, no
Grantor shall receive or collect, directly or indirectly, from any obligor in
respect thereof any amount upon the Grantor Claims.

Section 8.02 Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
with respect to any Grantor, the Collateral Agent on behalf of the Collateral
Agent and the other Secured Parties shall have the right to prove their claim in
any such proceeding, so as to establish their rights hereunder and receive
directly from the receiver, trustee or other court custodian, dividends and
payments which would otherwise be payable upon Grantor Claims. Each Grantor
hereby assigns such dividends and payments to the Collateral Agent for the
benefit of the Collateral Agent and the other Secured Parties for application
against the Secured Obligations as provided under Section 5(c) of the Swap
Intercreditor Agreement (or, if the Swap Intercreditor Agreement has terminated
in accordance with its terms, Section 10.02(c) of the Credit Agreement). Should
the Collateral Agent or any other Secured Party receive, for application upon
the Secured Obligations, any such dividend or payment which is otherwise payable
to any Grantor, and which, as between such Grantors, shall constitute a credit
upon the Grantor Claims, then upon the occurrence of the Discharge of Secured
Obligations, the intended recipient shall become subrogated to the rights of the
Collateral Agent and the other Secured Parties to the extent that such payments
to the Collateral Agent and the other Secured Parties on the Grantor Claims have
contributed toward the liquidation of the Secured Obligations, and such
subrogation shall be with respect to that proportion of the Secured Obligations
which would have been unpaid if the Collateral Agent and the other Secured
Parties had not received dividends or payments upon the Grantor Claims.

Section 8.03 Payments Held in Trust. If, notwithstanding Section 8.01 and
Section 8.02, any Grantor should receive any funds, payments, claims or
distributions which is prohibited by such Sections, then it agrees: (a) to hold
in trust for the Collateral Agent for the benefit of the Secured Parties an
amount equal to the amount of all funds, payments, claims or distributions so
received and (b) that it shall have absolutely no dominion over the amount of
such funds, payments, claims or distributions except to pay them promptly to the
Collateral Agent, for the benefit of the Secured Parties; and each Grantor
covenants promptly to pay the same to the Collateral Agent.

Section 8.04 Liens Subordinate. Each Grantor agrees that, until the Discharge of
Secured Obligations shall have occurred, any Liens securing payment of the
Grantor Claims shall be and remain inferior and subordinate to any Liens
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Obligations, regardless of whether such encumbrances in favor of such Grantor,
the Collateral Agent or any other Secured Party presently exist or are hereafter
created or attach. Without the prior written consent of the Collateral Agent, no
Grantor, prior to the Discharge of Secured Obligations, shall (a) exercise or
enforce any creditor’s right it may have against any debtor in respect of the
Grantor Claims or (b) foreclose, repossess, sequester or otherwise take steps or
institute any action or proceeding (judicial or otherwise, including the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any Lien held by it in
respect of the Grantor Claims.

Section 8.05 Notation of Records. Upon the request of the Collateral Agent, all
promissory notes and all accounts receivable ledgers or other evidence of the
Grantor Claims accepted by or held by any Grantor shall contain a specific
written notice thereon that the indebtedness evidenced thereby is subordinated
under the terms of this Agreement.

ARTICLE IX

Miscellaneous

Section 9.01 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Collateral Agent nor any other Secured Party shall by any act (except by a
written instrument pursuant to Section 9.04), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default, potential event of default (however defined), or
Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent or any other Secured Party, and no course of
dealing with respect to, any right, power or privilege hereunder, or any
abandonment or discontinuance of steps to enforce such right, power or
privilege, shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Collateral Agent or such other Secured Party would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law or equity.

Section 9.02 Notices. All notices and other communications provided for herein
shall be given in the manner and subject to the terms of the Swap Intercreditor
Agreement; provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth
on Schedule 1.

Section 9.03 Enforcement Expenses; Indemnities.

(a) Each Guarantor agrees to pay or reimburse each Secured Party and the
Collateral Agent for all its reasonable costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Article II or
otherwise enforcing or preserving any rights under this Agreement, including the
reasonable fees and disbursements of counsel to the Collateral Agent.

 

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(b) Each Guarantor agrees to pay, and to save the Collateral Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all Other Taxes which may be payable
or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.

(c) Each Guarantor agrees to pay, and to save the Collateral Agent and the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to Section 12.03 of the Credit
Agreement.

(d) The agreements in this Section 9.03 shall survive the Discharge of Secured
Obligations.

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 the Secured Documents, including the Swap Intercreditor
Agreement.

Section 9.05 Successors and Assigns. The provisions of this Agreement shall be
binding upon the Grantors and their successors and assigns and shall inure to
the benefit of the Collateral Agent and the other Secured Parties and their
respective successors and permitted assigns; provided that no Grantor may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent acting at
the direction of the Controlling Party, the Majority Lenders and each Secured
Swap Party (as defined in the Swap Intercreditor Agreement), and any such
purported assignment, transfer or delegation without such consent shall be null
and void.

Section 9.06 Survival; Revival; Reinstatement.

(a) All covenants, agreements, representations and warranties made by any
Grantor herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Secured Document to
which it is a party shall be considered to have been relied upon by the
Collateral Agent and the Secured Parties and shall survive the execution and
delivery of this Agreement and the making of any Loans and issuance of any
Letters of Credit, or the entry or extension of credit under any Secured Swap
Agreements, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that the Collateral Agent or other Secured
Parties may have had notice or knowledge of any Default, potential event of
default (however defined), Event of Default, or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect until the Discharge of Secured Obligations shall have
occurred. The provisions of Section 9.03 shall survive and remain in full force
and effect regardless of the occurrence of the Discharge of Secured Obligations.

(b) To the extent that any payments on the Secured Obligations or proceeds of
any Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or

 

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required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause (each, an
“Invalidated Payment”), then to such extent, the Secured Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Collateral Agent’s and the other Secured Parties’ Liens,
security interests, rights, powers and remedies under this Agreement and each
other Secured Document related to such Invalidated Payment shall continue in
full force and effect. In such event, each Secured Document related to such
Invalidated Payment shall be automatically reinstated and the Borrower shall
take such action as may be reasonably requested by the Collateral Agent and the
other Secured Parties to effect such reinstatement.

Section 9.07 Counterparts; Integration; Effectiveness.

(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.

(b) This Agreement, the other Secured Documents and any separate letter
agreements with respect to fees payable to the Collateral 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 SECURED DOCUMENTS (OTHER THAN THE LETTERS OF CREDIT AND THE LETTER
OF CREDIT AGREEMENTS) REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

(c) This Agreement shall become effective when it shall have been executed by
the Collateral Agent and when the Collateral Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto, the Secured Parties and their respective
successors and permitted assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement.

Section 9.08 Severability. Any provision of this Agreement or any other Loan
Document held to be invalid, illegal or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 9.09 Set-Off. If an Event of Default shall have occurred and be
continuing, each Secured Party and each of its Affiliates is hereby authorized
at any time and from time to time, without notice to such Person or any other
Grantor, any such notice being expressly waived by each Grantor, to the fullest
extent permitted by law, to set off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and

 

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any other credits, indebtedness, claims or obligations (of whatsoever kind,
including obligations under Secured Swap Agreements), in any currency, whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Secured Party or Affiliate to or for the credit or the
account of any Grantor against any of and all the obligations and liabilities of
the Grantor owed to such Secured Party now or hereafter existing under this
Agreement or any other Secured Document, irrespective of whether or not such
Secured Party shall have made any demand under this Agreement or any other
Secured Document and although such obligations may be unmatured. The rights of
each Secured Party under this Section 9.09 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party or its
Affiliates may have.

Section 9.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL
LAW PERMITS ANY SECURED PARTY TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH SECURED PARTY
IS LOCATED (AND IN SUCH EVENT, SUCH FEDERAL LAWS SHALL PERTAIN SOLELY TO SUCH
SECURED PARTY).

(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS FOR ITSELF
AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
AND THE OTHER SECURED DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF; PROVIDED,
THAT NOTHING CONTAINED HEREIN OR IN ANY OTHER SECURED DOCUMENT WILL PREVENT ANY
SECURED PARTY, INCLUDING THE COLLATERAL AGENT, FROM BRINGING ANY ACTION TO
ENFORCE ANY AWARD OR JUDGMENT OR EXERCISE ANY RIGHT UNDER THE SECURITY
INSTRUMENTS OR AGAINST ANY COLLATERAL OR ANY OTHER PROPERTY OF ANY LOAN PARTY IN
ANY OTHER FORUM IN WHICH JURISDICTION CAN BE ESTABLISHED. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.

(c) EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 14 OF THE SWAP INTERCREDITOR AGREEMENT (OR THE APPLICABLE
SWAP COUNTERPARTY JOINDER (AS DEFINED IN THE SWAP INTERCREDITOR AGREEMENT)) OR
SCHEDULE 1 HERETO, AS APPLICABLE, SUCH SERVICE TO

 

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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 (i) 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 SECURED DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (ii) 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; (iii) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE, OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND
(iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE
SECURED DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
9.10.

Section 9.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 9.12 Acknowledgments. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Secured Documents to which it is a party;

(b) neither the Collateral Agent nor any other Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Secured Documents, and the relationship
between the Grantors, on the one hand, and the Collateral Agent and other
Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Secured Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.

(d) Each of the parties hereto specifically agrees that it has a duty to read
this Agreement, the Security Instruments and the other Loan Documents and agrees
that it is charged with notice and knowledge of the terms of this Agreement, the
Security Instruments and the other Loan Documents; that it has in fact read this
Agreement, the Security Instruments and the other Loan Documents and is fully
informed and has full notice and knowledge of the terms,

 

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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 Grantors and Additional Pledged Securities. Each
Subsidiary of the Borrower that is required to become a party to this Agreement
pursuant to Section 8.14(b) of the Credit Agreement (as in effect on the date
hereof, without giving effect to any amendments, modifications, waivers,
terminations or repayments thereof) shall become a party hereto as a Grantor for
all purposes of this Agreement upon execution and delivery by such Subsidiary of
an Assumption Agreement and shall thereafter have the same rights, benefits and
obligations as a Grantor party hereto on the date hereof. Each Grantor that is
required to pledge additional Equity Interests pursuant to the Credit Agreement
shall execute and deliver a Supplement.

Section 9.14 Releases.

(a) Release Upon Payment in Full. The grant of the security interest hereunder,
all other grants of interests, set off and other Liens hereunder, and all
guarantees provided for herein, the security interest granted hereunder, all
other interest, set offs and other Liens granted hereunder, and all guarantees
provided for herein, and all Lien rights, powers and interests and guarantee
benefits with respect thereto shall automatically terminate and be null and void
immediately upon the date that the Discharge of Secured Obligations shall have
occurred, and the Collateral Agent, at the written request and expense of the
Borrower, will promptly take all steps and actions requested by the Borrower to
evidence and more fully effect the foregoing termination, including the release,
reassignment and transfer, without recourse or warranty, of the property
theretofore constituting the Collateral to the Grantors and the declaration of
all such guarantees and this Agreement to be of no further force or effect.

(b) Partial Releases. If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then immediately upon the occurrence of any such disposition, all
Liens and other rights with respect thereto, shall automatically terminate and
be null and void, and the Collateral Agent, at the request and sole expense of
such Grantor, shall promptly execute and deliver to such Grantor all releases or
other documents deemed reasonably necessary or desirable by the Borrower to
evidence the release of the Liens created hereby on such Collateral. If all the
Equity Interests of a Guarantor shall be sold, transferred or otherwise disposed
of in a transaction permitted by the Secured Documents, then immediately upon
the occurrence of such disposition, such Guarantor automatically shall be
released from its obligations hereunder, and the Liens and other rights created
hereunder in all property of such Guarantor shall automatically terminate and be
null and

 

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void; and at the request and sole expense of the Borrower, the Collateral Agent
shall promptly execute and deliver to or at the request of the Borrower all
releases and other documents reasonable necessary or desirable to release such
obligations, Liens and other rights; provided that the Borrower shall have
delivered to the Collateral Agent, at least fifteen days prior to the date of
the requested releases and documents, a written request of a Responsible Officer
for release identifying the relevant Guarantor and the terms of the sale or
other disposition in reasonable detail, together with a certification by the
Borrower stating that such transaction is in compliance with the Secured
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 Collateral
Agent or the other Secured Parties hereunder, including 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 Secured
Obligations or otherwise to be in full satisfaction of the Secured Obligations,
and the Secured Obligations shall remain in full force and effect, until the
Collateral Agent shall have applied payments (including collections from
Collateral) towards the Secured Obligations in the full amount then outstanding
or until such subsequent time as is provided in Section 9.14(a).

Section 9.15 Acceptance. Each Grantor hereby expressly waives notice of
acceptance of this Agreement, acceptance on the part of the Collateral Agent and
the other Secured Parties being conclusively presumed by their request for this
Agreement and delivery of the same to the Collateral Agent.

Section 9.16 Keepwell. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Grantor to honor
all of its obligations under this Agreement in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 9.16 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 9.16, or otherwise
under this Agreement, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section 9.16 shall remain
in full force and effect until the Discharge of Secured Obligations shall have
occurred. Each Qualified ECP Guarantor intends that this Section 9.16
constitute, and this Section 9.16 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Grantor for all
purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

Section 9.17 Original Guaranty and Collateral Agreement. This Agreement amends
and restates in its entirety the Original Guaranty and Collateral Agreement. The
Credit Agreement and any Notes issued in connection therewith have been given in
renewal, extension, rearrangement and increase, and not in extinguishment of the
obligations under the Original Credit Agreement and the notes and other
documents related thereto. Except to the extent released prior to the
effectiveness of this Agreement, all Liens, deeds of trust, mortgages,
assignments, security interests and guarantees securing the Original Credit
Agreement and the obligations relating thereto, including the Liens and security
interests of the Original Guaranty and Collateral Agreement are hereby ratified,
confirmed, renewed, extended, brought forward

 

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and rearranged as security for the Secured Obligations, in addition to and
cumulative of the Liens and security interests of this Agreement, and the
parties hereto acknowledge that such Liens, deeds of trust, mortgages,
assignments, security interests and guarantees shall continue to exist under and
be evidenced by this Agreement. On and after the date hereof, all references to
the Original Guaranty and Collateral Agreement (or any amendment thereof) in the
Credit Agreement or any related document (other than this Agreement) shall be
deemed to refer to the Original Guaranty and Collateral Agreement, as amended
and restated hereby. This amendment and restatement is limited as written and is
not a consent to any other amendment, restatement or waiver, whether or not
similar.

Section 9.18 Swap Intercreditor Agreement. This Agreement is subject to the
terms and conditions of the Swap Intercreditor Agreement, and in the event of
any conflicts between this Agreement and the Swap Intercreditor Agreement, the
Swap Intercreditor Agreement shall control.

[Remainder of page intentionally left blank; signature page follows]

 

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

 

BORROWER:     REX ENERGY CORPORATION     By:  

/s/ Thomas C. Stabley

      Thomas C. Stabley       President and Chief Executive Officer GRANTORS:  
 

REX ENERGY OPERATING CORP.

REX ENERGY I, LLC

PENNTEX RESOURCES ILLINOIS, INC.

REX ENERGY IV, LLC

R.E. GAS DEVELOPMENT, LLC

    By:  

/s/ Thomas C. Stabley

      Thomas C. Stabley       President and Chief Executive Officer

 

Signature Page – Amended and Restated Guaranty and Collateral Agreement

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

Acknowledged and Agreed to as

of the date hereof by:

 

COLLATERAL AGENT:    

ANGELO, GORDON ENERGY

SERVICER, LLC, as Collateral Agent

    By:  

/s/ Todd Dittmann

    Name:   Todd Dittmann     Title:   Authorized Person

 

Signature Page – Amended and Restated Guaranty and Collateral Agreement

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SCHEDULE 1

NOTICE ADDRESSES OF GRANTORS

 

Grantor

  

Notice Address

Rex Energy Corporation   

Rex Energy Corporation

366 Walker Drive

State College, PA 16801

Attn: Thomas Rajan, Chief Financial Officer

trajan@rexenergycorp.com

 

Copy: Jennifer L. McDonough, Senior Vice President, General Counsel and
Secretary

jmcdonough@rexenergycorp.com

Fax: 814.278.7286

Rex Energy I, LLC   

Rex Energy I, LLC

c/o Rex Energy Corporation

366 Walker Drive

State College, PA 16801

Attn: Thomas Rajan, Chief Financial Officer

trajan@rexenergycorp.com

 

Copy: Jennifer L. McDonough, Senior Vice President, General Counsel and
Secretary

jmcdonough@rexenergycorp.com

Fax: 814.278.7286

Rex Energy Operating Corp.   

Rex Energy Operating Corp.

c/o Rex Energy Corporation

366 Walker Drive

State College, PA 16801

Attn: Thomas Rajan, Chief Financial Officer

trajan@rexenergycorp.com

 

Copy: Jennifer L. McDonough, Senior Vice President, General Counsel and
Secretary

jmcdonough@rexenergycorp.com

Fax: 814.278.7286

Rex Energy IV, LLC   

Rex Energy IV, LLC

c/o Rex Energy Corporation

366 Walker Drive

State College, PA 16801

Attn: Thomas Rajan, Chief Financial Officer

trajan@rexenergycorp.com

 

Copy: Jennifer L. McDonough, Senior Vice President, General Counsel and
Secretary

jmcdonough@rexenergycorp.com

Fax: 814.278.7286

 

Schedule 1

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

PennTex Resources Illinois, Inc.   

PennTex Resources Illinois, Inc.

c/o Rex Energy Corporation

366 Walker Drive

State College, PA 16801

Attn: Thomas Rajan, Chief Financial Officer

trajan@rexenergycorp.com

 

Copy: Jennifer L. McDonough, Senior Vice President, General Counsel and
Secretary

jmcdonough@rexenergycorp.com

Fax: 814.278.7286

R.E. Gas Development, LLC   

PennTex Resources, L.P.

c/o Rex Energy Corporation

366 Walker Drive

State College, PA 16801

Attn: Thomas Rajan, Chief Financial Officer

trajan@rexenergycorp.com

 

Copy: Jennifer L. McDonough, Senior Vice President, General Counsel and
Secretary

jmcdonough@rexenergycorp.com

Fax: 814.278.7286

 

Schedule 1

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SCHEDULE 2

INVESTMENT PROPERTY

Description of Pledged Securities

 

Owner/Grantor

   Issuer    Percentage
Owned     Percentage
Pledged     Class of
Stock or other
Equity Interest    No. of
Shares      Certificate
No.  

Rex Energy Corporation

   Rex Energy I, LLC      100 %      100 %    Membership Interest      N/A     
  N/A  

Rex Energy Corporation

   Rex Energy Operating Corp.      100 %      100 %    Common Stock      100  
     3  

Rex Energy Corporation

   PennTex Resources Illinois, Inc.      100 %      100 %    Common Stock     
1,000        7  

Rex Energy Corporation

   Rex Energy IV, LLC      100 %      100 %    Membership Interest      N/A     
  N/A  

Rex Energy Corporation

   R.E. Ventures Holdings, LLC      100 %      100 %    Membership Interest     
N/A        N/A  

Rex Energy Corporation

   R.E. Gas Development, LLC      100 %      100 %    Membership Interest     
N/A        N/A  

R.E. Gas Development, LLC

   R.E. Disposal, LLC      100 %      100 %    Membership Interest      N/A     
  N/A  

Rex Energy I, LLC

   Rex Energy Marketing, LLC      100 %      100 %    Membership Interest     
N/A        N/A  

Description of Pledged Notes

None.

 

Schedule 2

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SCHEDULE 3

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

Uniform Commercial Code Filings

Filing of UCC-1 Financing Statements with respect to the Collateral with the
Secretary of State of the State of Delaware

Actions with respect to Pledged Securities

Delivery to the Collateral Agent or a Person designated by the Collateral Agent
of all Pledged Securities consisting of certified securities, in each case
properly endorsed for transfer or in blank.

Description of Commercial Tort Claims With An Asserted Value in Excess of
$1,000,000

None.

Other Actions

 

  1. Memorandum of Assignment of Liens and Security Interests dated as of
April 28, 2017 among Royal Bank of Canada, the Administrative Agent and R.E. Gas
Development, LLC (Ohio).

 

  2. Financing Statements in respect of item 1.

 

  3. Assignment of Liens and Security Interests and Amendment to Mortgage dated
as of April 28, 2017, among the Administrative Agent, the Collateral Agent and
R.E. Gas Development, LLC (Ohio).

 

  4. Financing Statements in respect of item 3.

 

  5. Memorandum of Assignment of Liens and Security Interests dated as of
April 28, 2017 among Royal Bank of Canada, the Administrative Agent and R.E. Gas
Development, LLC (Pennsylvania).

 

  6. Financing Statements in respect of item 5.

 

  7. Assignment of Liens and Security Interests and Amendment to Mortgage dated
as of April 28, 2017, among the Administrative Agent, the Collateral Agent and
R.E. Gas Development, LLC (Pennsylvania).

 

  8. Financing Statements in respect of item 7.

 

  9. Memorandum of Assignment of Liens and Security Interests dated as of
April 28, 2017 among Royal Bank of Canada, the Administrative Agent and Rex
Energy I, LLC (Pennsylvania).

 

Schedule 3

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

  10. Financing Statements in respect of item 9.

 

  11. Assignment of Liens and Security Interests and Amendment to Mortgage dated
as of April 28, 2017, among the Administrative Agent, the Collateral Agent and
Rex Energy I, LLC (Pennsylvania).

 

  12. Financing Statements in respect of item 11.

 

  13. Blocked Account Agreement by and among Manufacturers and Traders Trust
Company, Rex Energy Corporation and Angelo, Gordon Energy Servicer, LLC dated as
of April 28, 2017 regarding account no. 015004221769465.

 

  14. Blocked Account Agreement made by and among Manufacturers and Traders
Trust Company, R.E. Gas Development, LLC and Angelo, Gordon Energy Servicer, LLC
dated as of April 28, 2017 regarding account no. 000009847503548.

 

  15. Blocked Account Agreement made by and among Manufacturers and Traders
Trust Company, Rex Energy I, LLC and Angelo, Gordon Energy Servicer, LLC dated
as of April 28, 2017 regarding account no. 000008890765889.

 

  16. Blocked Account Agreement made by and among Manufacturers and Traders
Trust Company, Rex Energy Operating Corp. and Angelo, Gordon Energy Servicer,
LLC dated as of April 28, 2017 regarding account no. 015004219154503.

 

  17. Blocked Account Agreement made by and among Manufacturers and Traders
Trust Company, Rex Energy Operating Corp. and Angelo, Gordon Energy Servicer,
LLC dated as of April 28, 2017 regarding account no. 000008891671508.

 

Schedule 3

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SCHEDULE 4

JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE

Borrower:

 

Legal Name/Address

 

Trade Names Used
in Past 5 Years

 

Current
Jurisdiction
of
Organization

 

Jurisdiction of
Organizations in
Past 5 Years

 

Organizational
No.

 

Taxpayer
Identification
No.

 

Chief Executive
Office or Sole Place
of Business over the

last 5 years

Rex Energy Corporation

366 Walker Drive

State College, PA 16801

  None   Delaware   Not Applicable   4313846   20-8814402  

366 Walker Drive

State College, PA 16801 (Since April 2013)

 

(Prior to April 2013)

476 Rolling Ridge Drive  

State College, PA 16801

Grantors:

 

Legal Name/Address

 

Trade Names Used
in Past 5 Years

 

Current
Jurisdiction
of
Organization

 

Jurisdiction of
Organizations in
Past 5 Years

 

Organizational
No.

 

Taxpayer
Identification
No.

 

Chief Executive
Office or Sole Place
of Business over the

last 5 years

Rex Energy I, LLC

366 Walker Drive

State College, PA 16801

  None   Delaware   Not Applicable   4335969   20-8909799  

366 Walker Drive

State College, PA 16801 (Since April 2013)

 

(Prior to April 2013)

476 Rolling Ridge Drive  

State College, PA 16801

 

Schedule 4

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Rex Energy Operating Corp.

366 Walker Drive

State College, PA 16801

  None   Delaware   Not Applicable   3865470   20-2120390  

366 Walker Drive

State College, PA 16801 (Since April 2013)

 

(Prior to April 2013)

476 Rolling Ridge Drive

State College, PA 16801

Rex Energy IV, LLC

366 Walker Drive

State College, PA 16801

  None   Delaware   Not Applicable   4219136   20-5549688  

366 Walker Drive

State College, PA 16801 (Since April 2013)

 

(Prior to April 2013)

476 Rolling Ridge Drive

State College, PA 16801

PennTex Resources Illinois, Inc.

366 Walker Drive

State College, PA 16801

  None   Delaware   Not Applicable   3757111   20-0660609  

366 Walker Drive

State College, PA 16801 (Since April 2013)

 

(Prior to April 2013)

476 Rolling Ridge Drive

State College, PA 16801

R.E. Gas Development, LLC

366 Walker Drive

State College, PA 16801

  None   Delaware   Not Applicable   4456607   20-8814402  

366 Walker Drive

State College, PA 16801 (Since April 2013)

 

(Prior to April 2013)

476 Rolling Ridge Drive

State College, PA 16801

 

Schedule 4

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SCHEDULE 5

LOCATIONS OF INVENTORY AND EQUIPMENT

 

Grantor

  

Locations

Rex Energy Corporation   

1. 366 Walker Drive, Suite 300, State College, PA 16801

 

2. 600 Cranberry Woods Drive, Suite 250, Cranberry Township, PA 16066

Rex Energy I, LLC    1. 366 Walker Drive, Suite 300, State College, PA 16801 Rex
Energy Operating Corp.    1. 366 Walker Drive, Suite 300, State College, PA
16801 Rex Energy IV, LLC    1. 366 Walker Drive, Suite 300, State College, PA
16801 PennTex Resources Illinois, Inc.    1. 366 Walker Drive, Suite 300, State
College, PA 16801 R.E. Gas Development, LLC   

1. 366 Walker Drive, Suite 300, State College, PA 16801

 

2. Magill Storage Yard, Prospect Road, Butler, PA 16001

 

3. 600 Cranberry Woods Drive, Suite 250, Cranberry Township, PA 16066

 

Schedule 5

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Schedule 6

RECEIVABLES WITH GOVERNMENTAL AUTHORITY AS OBLIGOR

None.

 

Schedule 6

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Annex I

ACKNOWLEDGMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Amended and
Restated Guaranty and Collateral Agreement dated as of April 28, 2017 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Guaranty and Collateral Agreement”), made by the Grantors
parties thereto in favor of Angelo, Gordon Energy Servicer, LLC, as Collateral
Agent. The undersigned agrees for the benefit of the Collateral Agent and the
Secured Parties as follows:

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

2. The undersigned will notify the Collateral Agent promptly in writing of the
occurrence of any of the events described in Section 5.05(a) of the Guaranty and
Collateral Agreement.

3. The terms of Section 6.03(c) and Section 6.07 of the Guaranty and Collateral
Agreement shall apply to it, mutatis mutandis, with respect to all actions that
may be required of it pursuant to Section 6.03(c) and Section 6.07 of the
Guaranty and Collateral Agreement.

 

[NAME OF ISSUER] By:  

 

Name:   Title:   Address for Notices:

 

 

 

Fax:  

 

 

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

 

Annex I - 1

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Annex II

Assumption Agreement

ASSUMPTION AGREEMENT, dated as of [                 ], 20[    ], made by
[                    ], a [                     ] (the “Additional Grantor”), in
favor of Angelo, Gordon Energy Servicer, LLC, as collateral agent (in such
capacity, the “Collateral Agent”) for the Secured Parties. All capitalized terms
not defined herein shall have the meaning ascribed to them in the Guaranty and
Collateral Agreement referred to below.

W I T N E S S E T H:

WHEREAS, Rex Energy Corporation, a corporation duly formed and existing under
the laws of the State of Delaware (the “Borrower”), Angelo, Gordon Energy
Servicer, LLC, as administrative agent, and certain financial institutions (the
“Lenders”) have entered into that certain Term Loan Credit Agreement, dated as
of April 28, 2017 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its affiliates (other than the Additional Grantor) have entered into that
certain Amended and Restated Guaranty and Collateral Agreement, dated as of
April 28, 2017 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Guaranty and Collateral Agreement”)
in favor of the Collateral Agent for the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guaranty and Collateral Agreement; and

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

NOW, THEREFORE, IT IS AGREED:

1. Guaranty and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 9.13 of the
Guaranty and Collateral Agreement, hereby becomes a party to the Guaranty and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor and a Guarantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in the Schedules to the
Guaranty and Collateral Agreement. The Additional Grantor hereby represents and
warrants that, with respect to itself and as applicable, each of the
representations and warranties contained in Article IV of the Guaranty and
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.

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

 

Annex II - 1

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

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

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

 

[ADDITIONAL GRANTOR]

By:  

 

Name:   Title:  

 

Annex II - 2

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

Annex III

Supplement

SUPPLEMENT, dated as of [                 ], 20[    ], made by
[                    ], a [                    ] (the “Grantor”), in favor of
Angelo, Gordon Energy Servicer, LLC, as collateral agent (in such capacity, the
“Collateral Agent”) for the Secured Parties. All capitalized terms not defined
herein shall have the meaning ascribed to them in the Guaranty and Collateral
Agreement referred to below.

W I T N E S S E T H:

WHEREAS, Rex Energy Corporation, a corporation duly formed and existing under
the laws of the State of Delaware (the “Borrower”), Angelo, Gordon Energy
Servicer, LLC, as administrative agent, and certain financial institutions (the
“Lenders”) have entered into that certain Term Loan Credit Agreement, dated as
of April 28, 2017 (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Affiliates (including the Grantor) have entered into that certain Amended
and Restated Guaranty and Collateral Agreement, dated as of April 28, 2017 (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Guaranty and Collateral Agreement”) in favor of the
Collateral Agent for the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Grantor to pledge the Equity
Interests described in Schedule 2-S hereto; and

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

NOW, THEREFORE, IT IS AGREED:

1. Guaranty and Collateral Agreement. By executing and delivering this
Supplement, the information set forth in Schedule 2-S hereto is hereby added to
the information set forth in Schedule 2 to the Guaranty and Collateral
Agreement. The Grantor hereby represents and warrants that, with respect to
itself and as applicable, each of the representations and warranties contained
in Article IV of the Guaranty and Collateral Agreement is true and correct on
and as the date hereof (after giving effect to this Supplement) as if made on
and as of such date.

2. Governing Law. This Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.

3. Miscellaneous. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but

 

Annex III - 1

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

all of which when taken together shall constitute a single contract. Any
provision of this Supplement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

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

 

[GRANTOR]

By:  

 

Name:   Title:  

 

Annex III - 2