exv10w2



 





Exhibit 10.2




AMENDED AND RESTATED GUARANTY AND PLEDGE AGREEMENT




Dated as of

August 9, 2007




made by




Teton Energy Corporation

and

each of the other Obligors




in favor of




JPMorgan Chase Bank, N.A.

as Administrative Agent





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	Article I            Definitions
	 	 	1	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Other Definitional Provisions
	 	 	4	 
	Section 1.03 Rules of Interpretation
	 	 	4	 
	 
	 	 	 	 
	Article II           Guarantee
	 	 	4	 
	Section 2.01 Guarantee
	 	 	4	 
	Section 2.02 Right of Contribution
	 	 	5	 
	Section 2.03 No Subrogation
	 	 	5	 
	Section 2.04 Guaranty Amendments, Etc. with respect to the Borrower Obligations
	 	 	6	 
	Section 2.05 Waivers
	 	 	6	 
	Section 2.06 Guaranty Absolute and Unconditional
	 	 	7	 
	Section 2.07 Reinstatement
	 	 	8	 
	Section 2.08 Payments
	 	 	8	 
	 
	 	 	 	 
	Article III         Grant of Security Interest
	 	 	9	 
	Section 3.01 Grant of Security Interest
	 	 	9	 
	Section 3.02 Transfer of Pledged Securities
	 	 	9	 
	 
	 	 	 	 
	Article IV         Representations and Warranties
	 	 	9	 
	Section 4.01 Representations in Credit Agreement
	 	 	9	 
	Section 4.02 Title; No Other Liens
	 	 	10	 
	Section 4.03 Perfected First Priority Liens
	 	 	10	 
	Section 4.04 Obligor Information
	 	 	10	 
	Section 4.05 Pledged Securities
	 	 	10	 
	Section 4.06 Benefit to the Guarantor
	 	 	11	 
	Section 4.07 Solvency
	 	 	11	 
	 
	 	 	 	 
	Article V           Covenants
	 	 	11	 
	Section 5.01 Maintenance of Perfected Security Interest; Further Documentation
	 	 	11	 
	Section 5.02 Changes in Locations, Name, Etc
	 	 	12	 
	Section 5.03 Pledged Securities
	 	 	12	 
	 
	 	 	 	 
	Article VI          Remedial Provisions
	 	 	14	 
	Section 6.01 Code and Other Remedies
	 	 	14	 
	Section 6.02 Pledged Securities
	 	 	15	 
	Section 6.03 Private Sales of Pledged Securities
	 	 	17	 
	Section 6.04 Waiver; Deficiency
	 	 	18	 
	Section 6.05 Non-Judicial Enforcement
	 	 	18	 
	 
	 	 	 	 
	Article VII        The Administrative Agent
	 	 	18	 
	Section 7.01 Administrative Agent’s Appointment as Attorney-in-Fact, Etc.
	 	 	18	 
	Section 7.02 Duty of Administrative Agent
	 	 	19	 






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	 	 	Page	 
	Section 7.03 Filing of Financing Statements
	 	 	20	 
	Section 7.04 Authority of Administrative Agent
	 	 	20	 
	 
	 	 	 	 
	Article VIII       Subordination of Indebtedness
	 	 	20	 
	Section 8.01 Subordination of All Obligor Claims
	 	 	20	 
	Section 8.02 Claims in Bankruptcy
	 	 	21	 
	Section 8.03 Payments Held in Trust
	 	 	21	 
	Section 8.04 Liens Subordinate
	 	 	21	 
	Section 8.05 Notation of Records
	 	 	22	 
	 
	 	 	 	 
	Article IX          Miscellaneous
	 	 	22	 
	Section 9.01 Waiver
	 	 	22	 
	Section 9.02 Notices
	 	 	22	 
	Section 9.03 Payment of Expenses, Indemnities, Etc.
	 	 	22	 
	Section 9.04 Amendments in Writing
	 	 	23	 
	Section 9.05 Successors and Assigns
	 	 	23	 
	Section 9.06 Survival; Revival; Reinstatement
	 	 	23	 
	Section 9.07 Counterparts; Integration; Effectiveness
	 	 	24	 
	Section 9.08 Severability
	 	 	24	 
	Section 9.09 Set-Off
	 	 	24	 
	Section 9.10 Governing Law; Submission to Jurisdiction
	 	 	25	 
	Section 9.11 Headings
	 	 	26	 
	Section 9.12 Acknowledgments
	 	 	26	 
	Section 9.13 Additional Obligors and Pledgors
	 	 	26	 
	Section 9.14 Releases
	 	 	26	 
	Section 9.15 Acceptance
	 	 	27	 






SCHEDULES:




	 	 	 	 	 
	Schedule 1

	 	—
	 	Notice Addresses of Obligors
	Schedule 2

	 	—
	 	Description of Pledged Securities
	Schedule 3

	 	—
	 	Filings and Other Actions Required to Perfect Security Interests
	Schedule 4

	 	—
	 	Location of Jurisdiction of Organization and Chief Executive Office
	 
	 	 	 	 
	ANNEXES:
	 	 	 	 
	 
	 	 	 	 
	Annex I

	 	—
	 	Form of Assumption Agreement
	Annex II

	 	—
	 	Form of Supplement






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     This AMENDED AND RESTATED GUARANTY AND PLEDGE AGREEMENT, dated as of August 9, 2007, is made
by TETON ENERGY CORPORATION, a Delaware corporation (the “Borrower”), and each of the
signatories hereto (the Borrower and each of the signatories hereto, together with any other
Subsidiary or holding company of the Borrower that becomes a party hereto from time to time after
the date hereof, the “Obligors”), in favor of JPMORGAN CHASE BANK, N.A., as administrative
agent (in such capacity, together with its successors in such capacity, the “Administrative
Agent”).



R E C I T A L S




     A. The Borrower has entered into that certain Credit Agreement dated as of June 15, 2006 among
the Borrower, the financial institutions party thereto (the “Existing Lenders”), BNP
Paribas, as the administrative agent for the Existing Lenders, and the other agents party thereto
(as heretofore amended, supplemented or restated, the “Existing Credit Agreement”).



     B. As a condition precedent to the obligation of the Existing Lenders to make their respective
extensions of credit to the Borrower under the Existing Credit Agreement, the Obligors executed and
delivered that certain Guaranty and Pledge Agreement dated as of June 15, 2006 (the “Existing
Guaranty and Pledge Agreement”) to BNP Paribas, as administrative agent for the ratable benefit
of the Existing Lenders.



     C. Contemporaneously with the execution and delivery hereof, the Existing Credit Agreement
will be amended and restated in its entirety as an Amended and Restated Credit Agreement dated as
of the date hereof by and among the Borrower, the financial institutions party thereto (the
“Lenders”) and the Administrative Agent (as amended, supplemented or restated from time to
time, the “Credit Agreement”), pursuant to which the Lenders have agreed to extend credit
to the Borrower.



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



     E. Now, therefore, in consideration of the premises herein and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrower thereunder, each Obligor hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, to amend and restate the Existing
Guaranty and Pledge Agreement in its entirety in the form of this Agreement and further agrees as
follows:



ARTICLE I

Definitions




     Section 1.01 Definitions.



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



          (b) The following terms have the following meanings:



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



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



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



          “Borrower Obligations” means the collective reference to the payment and performance
of all Indebtedness and all obligations of the Borrower and its Subsidiaries under the Guaranteed
Documents, including, without limitation, the unpaid principal of and interest on the Loans and the
LC Exposure and all other obligations and liabilities of the Borrower and its Subsidiaries
(including, without limitation, interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of the Loans and LC Exposure and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Guaranteed Creditors, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Guaranteed Documents, whether on account of
principal, interest, reimbursement obligations, payments in respect of an early termination date,
fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Guaranteed Creditors that are required to be paid by the Borrower
pursuant to the terms of any Guaranteed Documents).



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



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



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



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



          “Guarantor Obligations” means with respect to any Guarantor, the collective reference
to (a) the Borrower Obligations and (b) all obligations and liabilities of such Guarantor



2









 







which may arise under or in connection with any Guaranteed Document to which such Guarantor is
a party, in each case, whether on account of principal, interest, guarantee obligations,
reimbursement obligations, payments in respect of an early termination date, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all reasonable fees and disbursements
of counsel to any Guaranteed Creditor under any Guaranteed Document).



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



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



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



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



          “Obligations” means: (a) in the case of the Borrower, the Borrower Obligations and
(b) in the case of each Guarantor, its Guarantor Obligations.



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



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



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



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



          “Pledged Partnership Interests” means, with respect to each Pledgor, all right, title
and interest of such Pledgor as a limited or general partner in all Partnerships and all right,
title and interest of any Pledgor in, to and under the Partnership Agreements.



          “Pledged Securities” means: (a) the Equity Interests described or referred to in
Schedule 2 (as the same may be supplemented from time to time pursuant to a Supplement);
and (b) (i) the certificates or instruments, if any, representing such Equity Interests, (ii) all
dividends (cash, Equity Interests or otherwise), cash, instruments, rights to subscribe, purchase
or sell and all other rights and Property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such securities, (iii) all replacements,
additions to and substitutions for any of the Property referred to in this definition, including,
without limitation, claims against third parties, (iv) the proceeds, interest, profits and other
income of or on any of the Property referred to in this definition, (v) all security entitlements
in respect of any of the
foregoing, if any and (vi) all books and records relating to any of the Property referred to
in this definition.



3









 





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



          “Proceeds” means all “proceeds” as such term is defined in Section 9.102(65) of the
Uniform Commercial Code in effect in the State of Texas on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the Pledged Securities, collections
thereon or distributions or payments with respect thereto.



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



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



          “UCC” means the Uniform Commercial Code as from time to time in effect in the State of
Texas; provided, however, that, in the event that, by reason of mandatory provisions of law, any of
the attachment, perfection or priority of the Administrative Agent’s and the Guaranteed Creditors’
security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Texas, the term “UCC” shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection, the effect thereof or priority and for purposes of definitions related to
such provisions.



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



     Section 1.03 Rules of Interpretation. Section 1.04 and Section 1.05 of the Credit
Agreement are hereby incorporated herein by reference and shall apply to this Agreement, mutatis
mutandis.



ARTICLE II

Guarantee




     Section 2.01 Guarantee.



          (a) Upon the terms and subject to the conditions of this Agreement, each of the Guarantors
hereby jointly and severally, unconditionally and irrevocably, guarantees to the Guaranteed
Creditors and each of their respective successors, indorsees, transferees and assigns, the prompt
and complete payment in cash and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations. This is a guarantee of
payment and not collection and the liability of each Guarantor is primary and not secondary.



          (b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum
liability of each Guarantor hereunder and under the other Loan



4









 







Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under
applicable federal and state laws relating to the insolvency of debtors (after giving effect to the
right of contribution established in Section 2.02).



          (c) Each Guarantor agrees that the Borrower Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee
contained in this Article II or affecting the rights and remedies of any Guaranteed
Creditor hereunder.



          (d) Each Guarantor agrees that if the maturity of the Borrower Obligations is accelerated by
bankruptcy or otherwise, such maturity shall also be deemed accelerated for the purpose of this
guarantee without demand or notice to such Guarantor. The guarantee contained in this Article II
shall remain in full force and effect until all the Borrower Obligations shall have been satisfied
by payment in full in cash, no Letter of Credit shall be outstanding and all of the Commitments are
terminated, notwithstanding that from time to time during the term of the Credit Agreement, no
Borrower Obligations may be outstanding.



          (e) No payment made by any Obligor, any other guarantor or any other Person or received or
collected by any Guaranteed Creditor from the Borrower, any of the Guarantors, any other guarantor
or any other Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of the Borrower
Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by
such Guarantor in respect of the Borrower Obligations or any payment received or collected from
such Guarantor in respect of the Borrower Obligations), remain liable for the Borrower Obligations
up to the maximum liability of such Guarantor hereunder until the Borrower Obligations are paid in
full in cash, no Letter of Credit shall be outstanding and all of the Commitments are terminated.



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



     Section 2.03 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by any Guaranteed Creditor, no
Guarantor shall be entitled to be subrogated to any of the rights of any Guaranteed Creditor
against the Borrower or any other Guarantor or any collateral security or guarantee or right of
offset held by any Guaranteed Creditor for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any indemnity, exoneration, participation, contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments made by such
Guarantor hereunder, until all amounts owing to the Guaranteed Creditors by the Borrower on account
of the Borrower Obligations are irrevocably and indefeasibly paid in full in cash, no



5









 







Letter of Credit shall be outstanding and all of the Commitments are terminated. If any
amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of
the Borrower Obligations shall not have been irrevocably and indefeasibly paid in full in cash, any
Letter of Credit shall be outstanding or any of the Commitments are in effect, such amount shall be
held by such Guarantor in trust for the Guaranteed Creditors, and shall, forthwith upon receipt by
such Guarantor, be turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied
against the Borrower Obligations, whether matured or unmatured, in accordance with Section 10.02(c)
of the Credit Agreement.



     Section 2.04 Guaranty Amendments, Etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder, and such Guarantor’s obligations hereunder shall not be
released, discharged or otherwise affected, notwithstanding that, without any reservation of rights
against any Guarantor and without notice to, demand upon or further assent by any Guarantor (which
notice, demand and assent requirements are hereby expressly waived by such Guarantor), (a) any
demand for payment of any of the Borrower Obligations made by any Guaranteed Creditor may be
rescinded by such Guaranteed Creditor or otherwise and any of the Borrower Obligations continued;
(b) the Borrower Obligations, the liability of any other Person upon or for any part thereof or any
collateral security or guarantee therefor or right of offset with respect thereto, may, from time
to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by, or any indulgence or forbearance in respect thereof granted by,
any Guaranteed Creditor; (c) any Guaranteed Document may be amended, modified, supplemented or
terminated, in whole or in part, as the Guaranteed Creditors may deem advisable from time to time;
(d) any collateral security, guarantee or right of offset at any time held by any Guaranteed
Creditor for the payment of the Borrower Obligations may be sold, exchanged, waived, surrendered or
released; (e) any additional guarantors, makers or endorsers of the Borrower’s Obligations may from
time to time be obligated on the Borrower’s Obligations or any additional security or collateral
for the payment and performance of the Borrower’s Obligations may from time to time secure the
Borrower’s Obligations; or (f) any other event shall occur which constitutes a defense or release
of sureties generally. No Guaranteed Creditor shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Borrower Obligations or for
the guarantee contained in this Article II or any Property subject thereto.



     Section 2.05 Waivers. Each Guarantor hereby waives any and all notice of the
creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof
of reliance by any Guaranteed Creditor upon the guarantee contained in this Article II or
acceptance of the guarantee contained in this Article II; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this Article II and no
notice of creation of the Borrower Obligations or any extension of credit already or hereafter
contracted by or extended to the Borrower need be given to any Guarantor; and all dealings between
the Borrower and any of the Guarantors, on the one hand, and the Guaranteed Creditors, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Article II. Each Guarantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Borrower or any of the
Guarantors with respect to the Borrower Obligations.



6









 





     Section 2.06 Guaranty Absolute and Unconditional.



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




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




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




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




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




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




          (vi) the fact that any Collateral or Lien contemplated or intended to be given, created
or granted as security for the repayment of the Obligations shall not be properly perfected
or created, or shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by each of the Guarantors that it is not entering into this Agreement
in reliance on, or in contemplation of the benefits of, the validity, enforceability,
collectability or value of any of the Collateral for the Obligations;




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




          (viii) (A) any Guaranteed Creditor’s election, in any proceeding instituted under
chapter 11 of the Bankruptcy Code, of the application of Section 1111(b)(2) of the
Bankruptcy Code; (B) any borrowing or grant of a Lien by the Borrower, as
debtor-in-possession, or extension of credit, under Section 364 of the Bankruptcy Code; (C)
the disallowance, under Section 502 of the Bankruptcy Code, of



7









 







all or any portion of any Guaranteed Creditor’s claim (or claims) for repayment of the
Obligations; (D) any use of cash collateral under Section 363 of the Bankruptcy Code; (E)
any agreement or stipulation as to the provision of adequate protection in any bankruptcy
proceeding; (F) the avoidance of any Lien in favor of the Guaranteed Creditors or any of
them for any reason; or (G) failure by any Guaranteed Creditor to file or enforce a claim
against the Borrower or its estate in any bankruptcy or insolvency case or proceeding; or




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



          (b) When making any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, any Guaranteed Creditor may, but shall be under no obligation to, join or
make a similar demand on or otherwise pursue or exhaust such rights and remedies as it may have
against the Borrower, any other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect thereto, and any failure
by any Guaranteed Creditor to make any such demand, to pursue such other rights or remedies or to
collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon
any such collateral security or guarantee or to exercise any such right of offset, or any release
of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or available as a
matter of law, of any Guaranteed Creditor against any Guarantor. For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.



     Section 2.07 Reinstatement. The guarantee contained in this Article II shall continue
to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Borrower Obligations is rescinded or must otherwise be restored or returned by any
Guaranteed Creditor upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its Property, or otherwise, all as though such payments had not been made.



     Section 2.08 Payments. Each Guarantor hereby guarantees that payments hereunder will
be paid to the Administrative Agent, for the ratable benefit of the Guaranteed Creditors, without
set-off, deduction or counterclaim, in dollars, in immediately available funds, at the offices of
the Administrative Agent specified in Section 12.01 of the Credit Agreement.



8









 





ARTICLE III

Grant of Security Interest




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



          (a) all Pledged Securities;



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



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



     Section 3.02 Transfer of Pledged Securities. All certificates or instruments
representing or evidencing such Pledged Securities shall be delivered to and held pursuant hereto
by the Administrative Agent or a Person designated by the Administrative Agent and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, and accompanied by any required transfer tax stamps to effect the
pledge of the Pledged Securities to the Administrative Agent. Notwithstanding the preceding
sentence, at the Administrative Agent’s reasonable discretion, all such Pledged Securities must be
delivered or transferred in such manner as to permit the Administrative Agent to be a “protected
purchaser” to the extent of its security interest as provided in Section 8.303 of the UCC (if the
Administrative Agent otherwise qualifies as a protected purchaser). During the continuance of an
Event of Default, the Administrative Agent, subject to its compliance with applicable federal and
state securities laws, shall have the right, at any time in its discretion and without notice, to
transfer to or to register in the name of the Administrative Agent or any of its nominees any or
all of the Pledged Securities, subject only to the revocable rights specified in Section
6.03. In addition, during the continuance of an Event of Default, the Administrative Agent
shall have the right at any time to exchange certificates or instruments representing or evidencing
Pledged Securities for certificates or instruments of smaller or larger denominations.



ARTICLE IV

Representations and Warranties




     To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower thereunder and to
induce the Lenders (and their Affiliates) to enter into Swap Agreements with the Borrower and its
Subsidiaries, each Obligor hereby represents and warrants to the Administrative Agent and each
Lender that:



     Section 4.01 Representations in Credit Agreement. In the case of each Guarantor, the
representations and warranties set forth in Article VII of the Credit Agreement as they relate to



9









 







such Guarantor or to the Loan Documents to which such Guarantor is a party are true and
correct in all material respects, provided that each reference in each such representation and
warranty to the Borrower’s knowledge shall, for the purposes of this Section 4.01, be
deemed to be a reference to such Guarantor’s knowledge.



     Section 4.02 Title; No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Guaranteed Creditors pursuant to this
Agreement, such Pledgor is the record and beneficial owner of its respective items of the
Collateral free and clear of any and all Liens and has rights in or the power to transfer each item
of the Collateral in which a Lien is granted by it hereunder, free and clear of any Lien. No
financing statement or other public notice with respect to all or any part of the Collateral is on
file or of record in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Guaranteed Creditors, pursuant to this
Agreement or the Security Instruments.



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



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



     Section 4.05 Pledged Securities.



          (a) The Pledged Securities required to be pledged hereunder and under the Credit Agreement by
such Pledgor are listed in Schedule 2. The shares of Pledged Securities pledged by such
Pledgor hereunder constitute all the issued and outstanding shares of all classes of the Equity
Interests of each Issuer owned by such Pledgor. All the shares of the Pledged Securities have been
duly and validly issued and are fully paid and nonassessable; and such Pledgor is the record and
beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except the security
interest created by this Agreement, and has rights in or the power to transfer the Pledged
Securities in which a Lien is granted by it hereunder, free and clear of any Lien.



          (b) There are no restrictions on transfer (that have not been waived or otherwise consented
to) in the LLC Agreement governing any Pledged LLC Interest and the Partnership Agreement governing
any Pledged Partnership Interest or any other agreement relating thereto which would limit or
restrict (i) the grant of a security interest in the Pledged



10









 







LLC Interests and the Pledged Partnership Interests, (ii) the perfection of such security
interest or (iii) the exercise of remedies in respect of such perfected security interest in the
Pledged LLC Interests and the Pledged Partnership Interests, in each case, as contemplated by this
Agreement. Upon the exercise of remedies in respect of the Pledged LLC Interests and the Pledged
Partnership Interests, a transferee or assignee of a membership interest or partnership interest,
as the case may be, of such LLC or Partnership, as the case may be, shall become a member or
partner, as the case may be, of such LLC or Partnership, as the case may be, entitled to
participate in the management thereof and, upon the transfer of the entire interest of such
Pledgor, such Pledgor ceases to be a member or partner, as the case may be.



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



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



ARTICLE V

Covenants




     Each Obligor covenants and agrees with the Administrative Agent and the Lenders that, from and
after the date of this Agreement until the Borrower Obligations shall have been paid in full in
cash, no Letter of Credit shall be outstanding and all of the Commitments shall have terminated:



     Section 5.01 Maintenance of Perfected Security Interest; Further Documentation. Each
Pledgor agrees that:



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



          (b) it will furnish to the Administrative Agent from time to time statements and schedules
further identifying and describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable detail.



          (c) At any time and from time to time, upon the written request of the Administrative Agent,
and at the sole expense of such Pledgor, it will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further



11









 







actions as the Administrative Agent may reasonably deem necessary for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the delivery of certificated securities and the filing of any
financing or continuation statements under the UCC (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby.



     Section 5.02 Changes in Locations, Name, Etc. Such Obligor recognizes that financing
statements pertaining to the Collateral have been or may be filed where such Obligor maintains any
Collateral or is organized. Without limitation of Section 8.01(l) of the Credit Agreement or any
other covenant herein, such Obligor will not cause or permit any change in its (a) corporate name
or in any trade name used to identify it in the conduct of its business or in the ownership of its
Properties, (b) the location of its chief executive office or principal place of business, (c) its
identity or corporate structure or in the jurisdiction in which it is incorporated or formed, (d)
its jurisdiction of organization or its organizational identification number in such jurisdiction
of organization or (e) its federal taxpayer identification number, unless, in each case, such
Obligor shall have first (i) notified the Administrative Agent of such change at least thirty (30)
days prior to the effective date of such change, and (ii) taken all action reasonably requested by
the Administrative Agent for the purpose of maintaining the perfection and priority of the
Administrative Agent’s security interests under this Agreement. In any notice furnished pursuant
to this Section 5.02, such Obligor will expressly state in a conspicuous manner that the
notice is required by this Agreement and contains facts that may require additional filings of
financing statements or other notices for the purposes of continuing perfection of the
Administrative Agent’s security interest in the Collateral. At the request of the Administrative
Agent, on or prior to the occurrence of such event, the Borrower will provide to the Administrative
Agent and the Lenders an opinion of counsel, in form and substance reasonably satisfactory to the
Administrative Agent, to the effect that such event will not impair the validity of the security
interests hereunder, the perfection and priority thereof, the enforceability of the Loan Documents,
and such other matters as may be reasonably requested by the Administrative Agent.



     Section 5.03 Pledged Securities.



          (a) If such Pledgor shall become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Equity Interests of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any
shares of the Pledged Securities, or otherwise in respect thereof, such Pledgor shall accept the
same as the agent of the Guaranteed Creditors, hold the same in trust for the Guaranteed Creditors,
segregated from other Property of such Pledgor, and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Pledgor to the
Administrative Agent, if required, together with an undated stock power covering such certificate
duly executed in blank by such Pledgor and with, if the Administrative Agent so requests, signature
guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional
collateral security for the Obligations.



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



          (c) In the case of each Pledgor that is an Issuer, such Issuer agrees that (i) it will be
bound by the terms of this Agreement relating to the Pledged Securities issued by it and will
comply with such terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events described in
Section 5.03(a) with respect to the Pledged Securities issued by it and (iii) the terms of
Sections Section 6.02(a) and Section 6.03 shall apply to it, mutatis mutandis, with respect
to all actions that may be required of it pursuant to Section 6.02(d) or Section 6.03 with
respect to the Pledged Securities issued by it.



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



          (e) Such Pledgor shall not agree to any amendment of a Partnership Agreement or LLC Agreement
that in any way adversely affects the perfection of the security interest of the Administrative
Agent in the Pledged Partnership Interests or Pledged LLC Interests pledged by such Pledgor
hereunder, including any amendment electing to treat the membership interest or partnership
interest of such Pledgor as a security under Section 8-103 of the UCC.



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



13









 





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



ARTICLE VI

Remedial Provisions




     Section 6.01 Code and Other Remedies.



          (a) Upon the occurrence and during the continuance of an Event of Default, the Administrative
Agent, on behalf of the Guaranteed Creditors, may exercise, in addition to all other rights and
remedies granted to them in this Agreement, the other Loan Documents and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured
party under the UCC or any other applicable law or otherwise available at law or equity. Without
limiting the generality of the foregoing, the Administrative Agent, without demand of performance
or other demand, presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Pledgor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose
of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s board or office of
any Guaranteed Creditor or elsewhere upon such terms and conditions as it may deem advisable and at
such prices as it may deem best, for cash or on credit or for future delivery without assumption of
any credit risk. Any Guaranteed Creditor shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in any Pledgor, which
right or equity is hereby waived and released. If applicable to any particular item of Collateral,
each Pledgor further agrees, at the Administrative Agent’s request, to assemble the Collateral and
make it available to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Pledgor’s premises or elsewhere. Any such sale or transfer by
the Administrative Agent either to itself or to any other Person shall be absolutely free from any
claim of right by Pledgor, including any equity or right of redemption, stay or appraisal which
Pledgor has or may have under any rule of law, regulation or statute now existing or hereafter
adopted (and such Pledgor hereby waives any rights it may have in respect thereof). Upon any such
sale or transfer, the Administrative Agent shall have the right to deliver, assign and transfer to
the purchaser or transferee thereof the Collateral so sold or transferred. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.01,
after deducting all reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Guaranteed Creditors hereunder,
including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in
whole or in part of the Obligations, in accordance with Section 10.02(c) of the Credit Agreement,
and only after such application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section 9.615 of the UCC,
need the



14









 







Administrative Agent account for the surplus, if any, to any Pledgor. To the extent permitted
by applicable law, each Pledgor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Guaranteed Creditor arising out of the exercise by them of any rights
hereunder except to the extent caused by the gross negligence or willful misconduct of the
Administrative Agent or such Guaranteed Creditor or their respective agents. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other disposition.



          (b) In the event that the Administrative Agent elects not to sell the Collateral, the
Administrative Agent retains its rights to dispose of or utilize the Collateral or any part or
parts thereof in any manner authorized or permitted by law or in equity, and to apply the proceeds
of the same towards payment of the Obligations. Each and every method of disposition of the
Collateral described in this Agreement shall constitute disposition in a commercially reasonable
manner.



          (c) The Administrative Agent may appoint any Person as agent to perform any act or acts
necessary or incident to any sale or transfer of the Collateral.



     Section 6.02 Pledged Securities.



          (a) Unless an Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given notice to the relevant Pledgor of the Administrative Agent’s intent to
exercise its corresponding rights pursuant to Section 6.02(c), each Pledgor shall be
permitted to receive all cash dividends paid in respect of the Pledged Securities paid in the
normal course of business of the relevant Issuer (other than liquidating or distributing
dividends), to the extent permitted in the Credit Agreement. Any sums paid upon or in respect of
any Pledged Securities upon the liquidation or dissolution of any issuer of any Pledged Securities,
any distribution of capital made on or in respect of any Pledged Securities or any property
distributed upon or with respect to any Pledged Securities pursuant to the recapitalization or
reclassification of the capital of any issuer of Pledged Collateral or pursuant to the
reorganization thereof shall, unless otherwise subject to a perfected security interest in favor of
the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sum of money or property so paid or
distributed in respect of any Pledged Securities shall be received by such Pledgor, such Pledgor
shall, until such money or property is paid or delivered to the Administrative Agent, hold such
money or property in trust for the Administrative Agent, segregated from other funds of such
Pledgor, as additional security for the Obligations.



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



15









 







Interest or to issue any other securities convertible into or granting the right to purchase
or exchange for any Stock of any issuer of Pledged Collateral other than as permitted by the Credit
Agreement.



          (c) Upon the occurrence and during the continuance of an Event of Default, upon notice by the
Administrative Agent of its intent to exercise such rights to the relevant Pledgor or Pledgors, (i)
the Administrative Agent shall have the right to receive any and all cash dividends, payments,
Property or other Proceeds paid in respect of the Pledged Securities and make application thereof
to the Borrower Obligations in accordance with Section 10.02(c) of the Credit Agreement, and (ii)
any or all of the Pledged Securities shall be registered in the name of the Administrative Agent or
its nominee, and (iii) the Administrative Agent or its nominee may exercise (A) all voting,
consent, corporate, partnership or limited liability and other rights pertaining to such Pledged
Securities at any meeting of shareholders, partners or members (or other equivalent body), as the
case may be, of the relevant Issuer or Issuers or otherwise and (B) any and all rights of
conversion, exchange and subscription and any other rights, privileges or options pertaining to
such Pledged Securities as if it were the absolute owner thereof (including, without limitation,
the right to exchange at its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in the organizational
structure of any Issuer, or upon the exercise by any Pledgor or the Administrative Agent of any
right, privilege or option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to account for Property actually
received by it, but the Administrative Agent shall have no duty to any Pledgor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so or delay in so
doing.



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



          (e) Each Pledgor hereby authorizes and instructs each Issuer of any Pledged Securities pledged
by such Pledgor hereunder to (i) comply with any instruction received by it from the Administrative
Agent in writing that (A) states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without



16









 







any other or further instructions from such Pledgor, and each Pledgor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay
any dividends or other payments with respect to the Pledged Securities directly to the
Administrative Agent.



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



     Section 6.03 Private Sales of Pledged Securities.



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



          (b) Each Pledgor agrees to use its best efforts to do or cause to be done all such other acts
as may reasonably be necessary to make such sale or sales of all or any portion of the Pledged
Securities pursuant to this Section 6.03 valid and binding and in compliance with any and all other
applicable Governmental Requirements. Each Pledgor further agrees that a breach of any of the
covenants contained in this Section 6.03 will cause irreparable injury to the Guaranteed Creditors,
that the Guaranteed Creditors have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.03 shall be specifically
enforceable against such Pledgor, and such Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for a defense that no
Event of Default has occurred or is continuing under the Credit Agreement.



17









 





     Section 6.04 Waiver; Deficiency. Each Pledgor shall remain liable for any deficiency
if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or
any Guaranteed Creditor to collect such deficiency.



     Section 6.05 Non-Judicial Enforcement. Provided that there is no breach of the peace,
the Administrative Agent may enforce its rights hereunder without prior judicial process or
judicial hearing, and to the extent permitted by and carried out in accordance with applicable law,
each Pledgor expressly waives any and all legal rights which might otherwise require the
Administrative Agent to enforce its rights by judicial process.



ARTICLE VII

The Administrative Agent




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



          (a) Each Pledgor hereby irrevocably constitutes and appoints the Administrative Agent and any
officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such Pledgor and in the name of
such Pledgor or in its own name, for the purpose of carrying out the terms of this Agreement, to
take any and all reasonably appropriate action and to execute any and all documents and instruments
which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Pledgor hereby gives the Administrative
Agent the power and right, on behalf of such Pledgor, without notice to or assent by such Pledgor,
to do any or all of the following; provided, the Administrative Agent agrees that it will not
exercise any of the following rights under such power of attorney unless an Event of Default shall
have occurred and be continuing:




          (i) in the name of such Pledgor or its own name, or otherwise, take possession of and
indorse and collect any check, draft, note, acceptance or other instrument for the payment
of moneys due with respect to any Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any such moneys due with respect to any
other Collateral whenever payable;




          (ii) unless being disputed under Section 8.04 of the Credit Agreement, pay or discharge
Taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs
or any insurance called for by the terms of this Agreement or any other Loan Document and
pay all or any part of the premiums therefor and the costs thereof;




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




          (iv) (A) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct; (B) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys,



18









 







claims and other amounts due or to become due at any time in respect of or arising out
of any Collateral; (C) commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (D) defend any suit,
action or proceeding brought against such Pledgor with respect to any Collateral; (E)
settle, compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may deem
appropriate; and (F) generally, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do, at the
Administrative Agent’s option and such Pledgor’s expense, at any time, or from time to time,
all acts and things which the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent’s and the Guaranteed Creditors’
security interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Pledgor might do.



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



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



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



     Section 7.02 Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral in its possession,
under Section 9.207 of the UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar Property for its own account and shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which comparable secured parties
accord comparable collateral. Neither the Administrative Agent, any Guaranteed Creditor nor any of
their Related Parties shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Pledgor or any other Person or to take any other
action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the
Administrative Agent and the Guaranteed Creditors hereunder are solely to protect the
Administrative Agent’s and the Guaranteed Creditors’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Guaranteed Creditor to exercise



19









 







any such powers. The Administrative Agent and the Guaranteed Creditors shall be accountable
only for amounts that they actually receive as a result of the exercise of such powers, and neither
they nor any of their Related Parties shall be responsible to any Obligor for any act or failure to
act hereunder, except for their own gross negligence or willful misconduct. To the fullest extent
permitted by applicable law, the Administrative Agent shall be under no duty whatsoever to make or
give any presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or other notice or demand
in connection with any Collateral or the Obligations, or to take any steps necessary to preserve
any rights against any Pledgor or other Person or ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not it has or is deemed to have knowledge of such matters. Each Obligor, to the extent
permitted by applicable law, waives any right of marshaling in respect of any and all Collateral,
and waives any right to require the Administrative Agent or any Guaranteed Creditor to proceed
against any Obligor or other Person, exhaust any Collateral or enforce any other remedy which the
Administrative Agent or any Guaranteed Creditor now has or may hereafter have against any Obligor
or other Person.



     Section 7.03 Filing of Financing Statements. Pursuant to the UCC and any other
applicable law, each Pledgor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect to the Collateral
without the signature of such Pledgor in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the Administrative Agent
under this Agreement. A photographic or other reproduction of this Agreement shall be sufficient
as a financing statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.



     Section 7.04 Authority of Administrative Agent. Each Obligor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Agreement shall, as between the Administrative Agent and the
Guaranteed Creditors, be governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the Administrative Agent and the
Obligors, the Administrative Agent shall be conclusively presumed to be acting as agent for the
Guaranteed Creditors with full and valid authority so to act or refrain from acting, and no Obligor
shall be under any obligation, or entitlement, to make any inquiry respecting such authority.



ARTICLE VIII

Subordination of Indebtedness




     Section 8.01 Subordination of All Obligor Claims. As used herein, the term
“Obligor Claims” shall mean all debts and obligations of the Borrower or any other Obligor
to any other Obligor, whether such debts and obligations now exist or are hereafter incurred or
arise, or whether the obligation of the debtor thereon be direct, contingent, primary, secondary,
several, joint and several, or otherwise, and irrespective of whether such debts or obligations be
evidenced by note, contract, open account, or otherwise, and irrespective of the Person or



20









 





Persons in whose favor such debts or obligations may, at their inception, have been, or may
hereafter be created, or the manner in which they have been or may hereafter be acquired. After
and during the continuation of an Event of Default, no Obligor shall receive or collect, directly
or indirectly, from any other obligor in respect thereof any amount upon the Obligor Claims.



     Section 8.02 Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings involving any
Obligor, the Administrative Agent on behalf of the Administrative Agent and the Guaranteed
Creditors shall have the right to prove their claim in any proceeding, so as to establish their
rights hereunder and receive directly from the receiver, trustee or other court custodian,
dividends and payments which would otherwise be payable upon Obligor Claims. Each Obligor hereby
assigns such dividends and payments to the Administrative Agent for the benefit of the
Administrative Agent and the Guaranteed Creditors for application against the Borrower Obligations
as provided under Section 10.02(c) of the Credit Agreement. Should any Agent or Guaranteed
Creditor receive, for application upon the Obligations, any such dividend or payment which is
otherwise payable to any Obligor, and which, as between such Obligors, shall constitute a credit
upon the Obligor Claims, then upon payment in full in cash of the Borrower Obligations, the
expiration of all Letters of Credit outstanding under the Credit Agreement and the termination of
all of the Commitments, the intended recipient shall become subrogated to the rights of the
Administrative Agent and the Guaranteed Creditors to the extent that such payments to the
Administrative Agent and the Guaranteed Creditors on the Obligor Claims have contributed toward the
liquidation of the Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Administrative Agent and the Guaranteed
Creditors had not received dividends or payments upon the Obligor Claims.



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



     Section 8.04 Liens Subordinate. Each Obligor agrees that, until the Borrower
Obligations are paid in full in cash, no Letter of Credit shall be outstanding and the termination
of all of the Commitments, any Liens securing payment of the Obligor Claims shall be and remain
inferior and subordinate to any Liens securing payment of the Obligations, regardless of whether
such encumbrances in favor of such Obligor, the Administrative Agent or any Guaranteed Creditor
presently exist or are hereafter created or attach. Without the prior written consent of the
Administrative Agent, no Obligor, during the period in which any of the Borrower Obligations are
outstanding or the Commitments are in effect, shall (a) exercise or enforce any creditor’s right it
may have against any debtor in respect of the Obligor Claims, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding (judicial or otherwise,
including without limitation the commencement of or joinder in any liquidation, bankruptcy,
rearrangement, debtor’s relief or insolvency proceeding) to enforce any Lien securing payment of
the Obligor Claims held by it.



21









 





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



ARTICLE IX

Miscellaneous




     Section 9.01 Waiver. No failure on the part of the Administrative Agent or any Lender
to exercise and no delay in exercising, and no course of dealing with respect to, any right, power,
privilege or remedy or any abandonment or discontinuance of steps to enforce such right, power,
privilege or remedy under this Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power, privilege or remedy under
this Agreement or any other Loan Document preclude or be construed as a waiver of any other or
further exercise thereof or the exercise of any other right, power, privilege or remedy. The
remedies provided herein are cumulative and not exclusive of any remedies provided by law or
equity.



     Section 9.02 Notices. All notices and other communications provided for herein shall
be given in the manner and subject to the terms of Section 12.01 of the Credit Agreement; provided
that any such notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.



     Section 9.03 Payment of Expenses, Indemnities, Etc.



          (a) Each Guarantor agrees to pay or reimburse each Guaranteed Creditor and the Administrative
Agent for all out-of-pocket expenses incurred by such Person, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Guaranteed Creditor, in connection
with the enforcement or protection of its rights in connection with this Agreement or any other
Loan Document, including, without limitation, all costs and expenses incurred in collecting against
such Guarantor under the guarantee contained in Article II or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Guarantor is a party in
accordance with the applicable provisions of the Credit Agreement.



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



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




22









 





     Section 9.04 Amendments in Writing. None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except in accordance with Section 12.02
of the Credit Agreement.



     Section 9.05 Successors and Assigns. The provisions of this Agreement shall be
binding upon the Obligors and their successors and assigns and shall inure to the benefit of the
Administrative Agent and the Guaranteed Creditors and their respective successors and assigns;
provided that except as set forth in Section 9.11 of the Credit Agreement, no Obligor may assign,
transfer or delegate any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and the Lenders, and any such purported assignment,
transfer or delegation shall be null and void.



     Section 9.06 Survival; Revival; Reinstatement.



          (a) All covenants, agreements, representations and warranties made by any Obligor herein and
in the certificates or other instruments delivered in connection with or pursuant to this Agreement
or any other Loan Document to which it is a party shall be considered to have been relied upon by
the Administrative Agent, the other Agents, the Issuing Bank and the Lenders and shall survive the
execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of
Credit, regardless of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, the other Agents, the Issuing Bank or any Lender may
have had notice or knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable under the Credit
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated. The provisions of Section 9.03 shall survive
and remain in full force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement, any other Loan Document or any provision hereof
or thereof in accordance with Section 12.05 of the Credit Agreement.




          (b) To the extent that any payments on the Guarantor Obligations or proceeds of any Collateral
are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy law,
common law or equitable cause, then to such extent, the Guarantor Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received and the Administrative
Agent’s and the Guaranteed Creditors’ Liens, security interests, rights, powers and remedies under
this Agreement and each other Loan Document shall continue in full force and effect. In such
event, each Loan Document shall be automatically reinstated and the Borrower shall take such action
as may be reasonably requested by the Administrative Agent and the Guaranteed Creditors to effect
such reinstatement.




23









 





     Section 9.07 Counterparts; Integration; Effectiveness.



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




          (b) This Agreement, the other Loan Documents and any separate letter agreements with respect
to fees payable to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof and thereof. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS (OTHER THAN THE LETTERS OF CREDIT AND THE LETTER OF CREDIT AGREEMENTS)
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.




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




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



     Section 9.09 Set-Off. If an Event of Default shall have occurred and be continuing,
each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations (of whatsoever kind,
including, without limitations obligations under Swap Agreements) at any time owing by such Lender
or Affiliate to or for the credit or the account of any Obligor against any of and all the
obligations of the Obligor owed to such Lender now or hereafter existing under this Agreement or
any other Loan Document, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations may be unmatured.
The rights of each Lender under this Section 9.09 are in addition to other rights and
remedies (including other rights of setoff) which such Lender or its Affiliates may have.



24









 





     Section 9.10 Governing Law; Submission to Jurisdiction.



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




          (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.




          (c) EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 12.01 OF THE CREDIT AGREEMENT (OR
SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01 OF THE CREDIT AGREEMENT) OR
SCHEDULE 1 HERETO, AS APPLICABLE, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.




          (d) EACH PARTY HEREBY (1) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (2) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (3) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR
ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (4) ACKNOWLEDGES THAT IT HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 9.10.




25









 








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



     Section 9.12 Acknowledgments. Each Obligor hereby acknowledges that:



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




          (b) neither the Administrative Agent nor any Guaranteed Creditor has any fiduciary
relationship with or duty to any Obligor arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the Obligors, on the one hand, and the
Administrative Agent and Guaranteed Creditors, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and




          (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Guaranteed Creditors or among the Obligors
and the Guaranteed Creditors.




          (d) Each of the parties hereto specifically agrees that it has a duty to read this Agreement,
the Security Instruments and the other Loan Documents and agrees that it is charged with notice and
knowledge of the terms of this Agreement, the Security Instruments and the other Loan Documents;
that it has in fact read this Agreement, the Security Instruments and the other Loan Documents and
is fully informed and has full notice and knowledge of the terms, conditions and effects thereof;
that it has been represented by independent legal counsel of its choice throughout the negotiations
preceding its execution of this Agreement and the Security Instruments; and has received the advice
of its attorney in entering into this Agreement and the Security Instruments; and that it
recognizes that certain of the terms of this Agreement and the Security Instruments result in one
party assuming the liability inherent in some aspects of the transaction and relieving the other
party of its responsibility for such liability. EACH PARTY HERETO AGREES AND COVENANTS THAT IT
WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND
THE SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION
OR THAT THE PROVISION IS NOT “CONSPICUOUS.”




     Section 9.13 Additional Obligors and Pledgors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 8.14 of the Credit Agreement
shall become an Obligor for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement and shall thereafter have the same rights, benefits and
obligations as an Obligor party hereto on the date hereof. Each Guarantor that is required to
pledge Equity Interests of its Subsidiaries shall execute and deliver a Supplement, if such Equity
Interests were not previously pledged.



     Section 9.14 Releases.



          (a) Release Upon Payment in Full. The grant of a security interest hereunder and all
of rights, powers and remedies in connection herewith shall remain in full force and

26









 








effect until the Administrative Agent has (i) retransferred and delivered all Collateral in
its possession to the Pledgors, and (ii) executed a written release or termination statement and
reassigned to the Pledgors without recourse or warranty any remaining Collateral and all rights
conveyed hereby. Upon the complete payment of the Borrower Obligations, the termination of all of
the Commitments and the compliance by the Obligors with all covenants and agreements hereof, the
Administrative Agent, at the expense of the Borrower, will promptly release, reassign and transfer
the Collateral to the Pledgors and declare this Agreement to be of no further force or effect.




          (b) Partial Releases. If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Pledgor in a transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such Pledgor, shall promptly execute and
deliver to such Pledgor all releases or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral and the Equity Interests of the Issuer
thereof. At the request and sole expense of the Borrower, a Guarantor shall be released from its
obligations hereunder in the event that all the Equity Interests of such Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided
that the Borrower shall have delivered to the Administrative Agent, at least ten Business Days
prior to the date of the proposed release, a written request of a Responsible Officer of the
Borrower for release identifying the relevant Guarantor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents.




          (c) Retention in Satisfaction. Except as may be expressly applicable pursuant to
Section 9.620 of the UCC, no action taken or omission to act by the Administrative Agent or the
Guaranteed Creditors hereunder, including, without limitation, any exercise of voting or consensual
rights or any other action taken or inaction, shall be deemed to constitute a retention of the
Collateral in satisfaction of the Obligations or otherwise to be in full satisfaction of the
Obligations, and the Obligations shall remain in full force and effect, until the Administrative
Agent and the Guaranteed Creditors shall have applied payments (including, without limitation,
collections from Collateral) towards the Obligations in the full amount then outstanding or until
such subsequent time as is provided in Section 9.14(a).




     Section 9.15 Acceptance. Each Obligor hereby expressly waives notice of acceptance of
this Agreement, acceptance on the part of the Administrative Agent and the Guaranteed Creditors
being conclusively presumed by their request for this Agreement and delivery of the same to the
Administrative Agent.



     Section 9.16 Restatement. This Agreement is a restatement of, and an amendment and
supplement to, the Existing Guaranty and Pledge Agreement. This Agreement does not in any way
constitute a novation of the Existing Guaranty and Pledge Agreement, but is an amendment and
restatement of the same.



[Remainder of page intentionally left blank; signature pages follow]




27









 





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



	 	 	 	 	 	 	 	 	 
	BORROWER:	 	TETON ENERGY CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	GUARANTORS:	 	TETON NORTH AMERICA LLC	 	 
	 	 	By:	 	Teton Energy Corporation, its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TETON PICEANCE LLC	 	 
	 	 	By:	 	Teton North America LLC, its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TETON DJ LLC	 	 
	 	 	By:	 	Teton North America LLC, its sole member	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	TETON WILLISTON LLC	 	 
	 	 	By:	 	Teton North America LLC, its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 





Signature Page

Amended and Restated Guaranty and Pledge Agreement





 









 






	 	 	 	 	 	 	 	 	 
	 	 	TETON BIG HORN LLC	 	 
	 	 	By:	 	Teton North America LLC, its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






Signature Page

Amended and Restated Guaranty and Pledge Agreement




 









 





Acknowledged and Agreed to as of the

date hereof by:




	 	 	 	 	 
	ADMINISTRATIVE AGENT:	 	JPMORGAN CHASE BANK, N.A.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	J. Scott Fowler
	 

	 	 	 	Senior Vice President






Signature Page

Amended and Restated Guaranty and Pledge Agreement





 









 








Schedule 1




NOTICE ADDRESSES OF OBLIGORS




Teton Energy Corporation

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Bill I. Pennington




Teton North America LLC

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Bill I. Pennington




Teton Piceance LLC

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Bill I. Pennington




Teton DJ LLC

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Bill I. Pennington




Teton Williston LLC

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Bill I. Pennington




Teton Big Horn LLC

410 17th Street, Suite 1850

Denver, Colorado 80202

Attention: Bill I. Pennington





Schedule 1-1









 








Schedule 2




DESCRIPTION OF PLEDGED SECURITIES




Pledged Securities:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Class of Stock or
	 	 	 	 	Percentage	 	Percentage	 	other
	Owner	 	Issuer	 	Owned	 	Pledged	 	Equity Interest
	Teton Energy Corporation

	 	Teton North America LLC
	 	 	100	%	 	 	100	%	 	Limited Liability

Company Interests
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Teton North America LLC

	 	Teton Piceance LLC
	 	 	100	%	 	 	100	%	 	Limited Liability

Company Interests
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Teton North America LLC

	 	Teton DJ LLC
	 	 	100	%	 	 	100	%	 	Limited Liability

Company Interests
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Teton North America LLC

	 	Teton Williston LLC
	 	 	100	%	 	 	100	%	 	Limited Liability

Company Interests
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Teton North America LLC

	 	Teton Big Horn LLC
	 	 	100	%	 	 	100	%	 	Limited Liability

Company Interests







Schedule 2-1









 








Schedule 3




FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS





	1.	 	Filing of UCC-3 Financing Statement for the purpose of assigning that certain UCC-1 Financing
Statement filed with the Secretary of State of the State of Delaware on September 13, 2006, as
File No. 63164845 from BNP Paribas, as administrative agent for the ratable benefit of the
Existing Lenders, to Administrative Agent, as secured party.
	 
	2.	 	Filing of UCC-3 Financing Statement for the purpose of assigning that certain UCC-1 Financing
Statement filed with the Secretary of State of Colorado on September 13, 2006, as File No.
2006089386 from BNP Paribas, as administrative agent for the ratable benefit of the Existing
Lenders, to Administrative Agent, as secured party, and for the purpose of amending the
description of the Collateral.






Schedule 3-1









 








Schedule 4




LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE




	 	 	 
	Legal name of the Borrower:

Address:



	 	Teton Energy Corporation

410 17th Street, Suite1850,

 Denver, Colorado
80202
	All names and trade names that the Borrower has used
in the last five years:


Jurisdictions of organization over the last five years:


Current jurisdiction of organization:


Organizational number:

Taxpayer identification number:


Location of chief executive office or sole place of

business over the last five years:

	 	None

Delaware

Delaware

2896826

84-1482290

410 17th Street, Suite1850,

Denver, Colorado 80202
	 
	 	 
	Legal name of the Obligor:


Address:

	 	Teton North America LLC

410 17th Street, Suite
1850, 

Denver, Colorado
80202
	All names and trade names that the Borrower has used
in the last five years:


Jurisdictions of organization over the last five years:


Current jurisdiction of organization:


Organizational number:


Location of chief executive office or sole place of

business over the last five years:

	 	None

Colorado

Colorado

20051069170

410 17th Street, Suite
1850, 

Denver, Colorado
80202
	 
	 	 
	Legal name of the Obligor:


Address:

	 	Teton Piceance LLC


410 17th Street,

Suite 1850,

Denver, Colorado 80202
	All names and trade names that the Borrower has used
in the last five years:


Jurisdictions of organization over the last five years:


Current jurisdiction of organization:


Organizational number:


Location of chief executive office or sole place of

business over the last five years:

	 	None

Colorado 

Colorado

20051069213

410 17th Street,Suite 1850,

 Denver, Colorado 80202






Schedule 4-1









 






	 	 	 
	Legal name of the Obligor:


Address:

	 	Teton DJ LLC 

410 17th Street,

Suite 1850,

Denver, Colorado 80202
	All names and trade names that the Borrower has used
in the last five years:


Jurisdictions of organization over the last five years:


Current jurisdiction of organization:


Organizational number:


Location of chief executive office or sole place of

business over the last five years:

	 	None 

Colorado

Colorado 

20051069240

410 17th Street, Suite 1850,

Denver, Colorado 80202
	 
	 	 
	Legal name of the Obligor:


Address:

	 	Teton Williston LLC 

410 17th Street, 

Suite 1850,

Denver, Colorado 80202
	All names and trade names that the Borrower has used
in the last five years:

Jurisdictions of organization over the last five years:


Current jurisdiction of organization:


Organizational number:


Location of chief executive office or sole place of

business over the last five years:

	 	None

Colorado

Colorado

20061183886

410 17th Street, Suite 1850,

Denver, Colorado 80202







Schedule 4-2









 








ACKNOWLEDGMENT AND CONSENT




     The undersigned hereby acknowledges receipt of a copy of the Amended and Restated Guaranty and
Pledge Agreement dated as of August 9, 2007 (the “Guaranty and Pledge Agreement”), made by the
Obligors parties thereto for the benefit of JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The undersigned agrees for the benefit of the Administrative Agent and the Guaranteed Creditors as
follows:



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



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



	 	 	 	 	 	 	 
	 	 	[NAME OF ISSUER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 

	 	 








 




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






Schedule 4-3









 








Annex I




Assumption Agreement




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



W I T N E S S E T H:




     WHEREAS, Teton Energy Corporation, a Delaware corporation (the “Borrower”), the
Administrative Agent, and certain financial institutions have entered into that certain Amended and
Restated Credit Agreement, dated as of August 9, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);



     WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates
(other than the Additional Obligor) have entered into an Amended and Restated Guaranty and Pledge
Agreement, dated as of August 9, 2007 (as amended, restated, supplemented or otherwise modified
from time to time, the “Guaranty and Pledge Agreement”) in favor of the Administrative
Agent for the benefit of the Guaranteed Creditors;



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



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



     NOW, THEREFORE, IT IS AGREED:



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



Annex I-1









 





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



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



	 	 	 	 	 	 	 
	 	 	[ADDITIONAL OBLIGOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 







Annex I-2









 








Annex II




Supplement




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



W I T N E S S E T H:




     WHEREAS, Teton Energy Corporation, a Delaware corporation (the “Borrower”), the
Administrative Agent, and certain financial institutions have entered into an Amended and Restated
Credit Agreement, dated as of August 9, 2007 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”);



     WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates
(other than the Additional Pledgor) have entered into an Amended and Restated Guaranty and Pledge
Agreement, dated as of August 9, 2007 (as amended, restated, supplemented or otherwise modified
from time to time, the “Guaranty and Pledge Agreement”) in favor of the Administrative
Agent for the benefit of the Guaranteed Creditors;



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



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



     NOW, THEREFORE, IT IS AGREED:



     1. Guaranty and Pledge Agreement. By executing and delivering this Supplement, the Additional
Pledgor, as provided in Section 9.13 of the Guaranty and Pledge Agreement, hereby becomes a
party to the Guaranty and Pledge Agreement as an Obligor thereunder with the same force and effect
as if originally named as an Obligor therein, and without limiting the generality of the foregoing,
hereby pledges and grants a security interest in (a) the securities described or referred to in
Schedule 2-S and (b) (i) the certificates or instruments, if any, representing such
securities, (ii) all dividends (cash, Equity Interests or otherwise), cash, instruments, rights to
subscribe, purchase or sell and all other rights and Property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of such securities,
(iii) all replacements, additions to and substitutions for any of the Property referred to in this
definition, including, without limitation, claims against third parties, (iv) the proceeds,
interest, profits and other income of or on any of the Property referred to in this definition, (v)
all security entitlements in respect of any of the foregoing, if any, (vi) all books and records
relating to any of the Property referred to in this definition and (vii) all proceeds of any of the
foregoing (collectively, the “Collateral”). Upon execution of this Supplement, such



Annex II-1









 







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



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



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



	 	 	 	 	 	 	 
	 	 	[ADDITIONAL PLEDGOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 







Annex II-2