Exhibit 10.5


 


Execution Version


 


SECURITY AGREEMENT


 


THIS SECURITY AGREEMENT
(this “Security Agreement”) is executed as of April 8, 2015, by BREITBURN OPERATING LP, a Delaware limited
partnership (the “Company”), Breitburn Energy Partners LP,
a Delaware limited partnership (the “Parent Debtor”), BREITBURN FINANCE CORPORATION, a Delaware corporation
(“Finance Corp.” and, together with the Company and the Parent Debtor, the “Issuers”),
each of the other subsidiary entities of the Parent Debtor listed on the signature pages hereto or which becomes a party hereto
(each, a “Subsidiary Debtor” and, together with the Company, the Parent Debtor and Finance Corp., each
a “Debtor”, and collectively, the “Debtors”), whose mailing addresses are set
forth on Annex A hereto, U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee and as collateral
agent for the Secured Parties under the Indenture described below (in such capacity, together with its successors in such capacity,
the “Collateral Agent”).


 


RECITALS


 


WHEREAS, pursuant to that
certain Indenture, dated as of April 8, 2015 (as it may be amended, restated, amended and restated, supplemented, waived or otherwise
modified from time to time, the “Indenture”) by and among the Issuers, the Subsidiary Debtors from time
to time party thereto and the Collateral Agent, the Issuers have issued their 9.25% Senior Secured Notes due 2020 (as defined in
the Indenture, the “Notes”);


 


WHEREAS, the Debtors are
entering into this Security Agreement in order to induce the Holders to purchase the Notes and to secure the obligations of the
Debtors under or in connection with the Notes, including with respect to the guarantees made pursuant to Article 10 of the Indenture


 


ACCORDINGLY, for valuable
consideration, the receipt and adequacy of which are hereby acknowledged, each of the Debtors and Secured Parties hereby agree
as follows:


 


1.          CERTAIN
DEFINITIONS AND OTHER TERMS. (a) Unless otherwise defined herein, or the context hereof otherwise requires, each term defined
in either of the Indenture or the UCC is used in this Security Agreement with the same meaning; provided that, if the
definition given to such term in the Indenture conflicts with the definition given to such term in the UCC, the Indenture definition
shall control to the extent legally allowable; and if any definition given to such term in Chapter 9 of the UCC conflicts
with the definition given to such term in any other chapter of the UCC, the Chapter 9 definition shall prevail. As
used herein, the following terms have the meanings indicated:


 


Additional Debtor
has the meaning set forth in Paragraph 8 hereof.


 


Assigned Agreements
shall mean all agreements and contracts to which a Debtor is a party as of the date hereof, or to which such Debtor becomes a party
after the date hereof, as each such agreement may be amended, supplemented or otherwise modified from time to time.


 


Cash Collateral Account
has the meaning set forth in Paragraph 7(h) hereof.


 


Claim has the meaning
set forth in Paragraph 7(l) hereof.


 


Collateral has the
meaning set forth in Paragraph 3 hereof.


 


Copyrights has the
meaning set forth in Paragraph 3(f) hereof.


 




    	 



    	 



    

 


Deposit Accounts has the meaning set
forth in Paragraph 3(l) hereof.


 


Deposit Account Control
Agreement means an agreement among a depository bank holding a Deposit Account, a Debtor, the Collateral Agent, and, if applicable,
the Priority Lien Collateral Agent, substantially in such form as may be reasonably acceptable to the Lead Holder and the Collateral
Agent.


 


Excluded Assets
means (i) any permit, lease, license, contract, property right or agreement to which any Debtor is a party and any of its rights
or interests thereunder if, and only for so long as, the grant of a security interest under the security documents (a) is prohibited
by or a violation of any law, rule or regulation applicable to such Debtor or requires the consent of an applicable governmental
authority or a third party which has not been obtained or (b) shall constitute or result in a breach of a term or provision of
or termination or default under any such permit, lease, license, contract, property right or agreement (other than to the extent
that any such law, rule, regulation, consent requirement, violation, term or provision would be rendered ineffective pursuant to
Section 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable law), (ii) property owned
by any Debtor that is subject to a purchase money Lien or capital lease permitted under the Indenture if the agreement pursuant
to which such Lien is granted (or the document providing for such capital lease) prohibits, or requires the consent of any Person
other than any Debtor which has not been obtained as a condition to, the creation of any other Lien on such property, (iii) any
“intent-to-use” application for registration of a Trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C.
§ 1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment
to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any, that, and solely
during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of any
registration that issues from such intent-to-use application under applicable federal law, (iv) any deposit account exclusively
used for trust, payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Debtor’s
employees and (v) the Excluded Equity Interests; provided, however, “Excluded Assets” shall not include
any proceeds, products, substitutions or replacements of any Excluded Assets (unless such proceeds, products, substitutions or
replacements would constitute Excluded Assets) or any of the items listed in clauses (i) through (v) to the extent they secure
any Priority Lien Debt.


 


Excluded Equity Interests
means (i) each Debtor’s Equity in Saginaw Bay Lateral Michigan Limited Partnership, Seal Beach Gas Processing Venture, Wilderness
Chester Gas Processing Limited Partnership, Wilderness Chester LLC, Wilderness Energy, L.C. and Wilderness Energy Services Limited
Partnership if, and to the extent that, and for so long as, including such Equity in the definition of “Collateral”
would violate applicable law or a contractual obligation binding on such Equity, (ii) the Parent’s Equity in Breitburn GP
LLC, (iii) Breitburn GP LLC’s general partnership interest in the Parent, (iv) the Company’s and Terra Energy Company
LLC’s Equity in Breitburn Collingwood Utica LLC, (v) the Company’s Equity in East Texas Salt Water Disposal Company,
(vi) Margin Stock not required to be pledged pursuant to Section 8.07(b) of the RBL Credit Agreement, as in effect on the date
hereof, for so long as such provision is in effect and (vii) any Equity in an entity (other than those listed in clauses (i)-(vi))
to the extent that, and for so long as, including such Equity in the definition of “Collateral” would violate a contractual
obligation binding on such assets that existed at the time of the acquisition thereof and was not created or made binding on such
assets in contemplation or in connection with the acquisition of such assets; provided, however, that if any entity
listed in clause (i) becomes a Wholly-Owned Subsidiary, no Debtor’s Equity interests in such Wholly-Owned Subsidiary shall
be deemed Excluded Equity Interests; and provided further that the term Excluded Equity Interests does not include dividends
or other distributions paid in respect of the Debtor’s Equity in the above-listed entities and Equity, and does not include
the proceeds of any Disposition of such Equity and provided further that Excluded Equity Interests does not include any
Equity that has been pledged to secure any Priority Lien Debt.


 




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Feedstocks has the
meaning set forth in Paragraph 3(b) hereof.


 


Intellectual Property
has the meaning set forth in Paragraph 3(h) hereof.


 


Intercreditor Agreement
means (i) that certain Intercreditor Agreement, dated as of the date hereof, by and among the Collateral Agent, the Issuers and
the other parties thereto as Guarantors and the Priority Lien Collateral Agent and (ii) each customary intercreditor agreement
entered into after the date hereof in accordance with the Indenture.


 


Intermediate Products
has the meaning set forth in Paragraph 3(b) hereof.


 


Investment Accounts
has the meaning set forth in Paragraph 3(m) hereof.


 


Investment Account Control
Agreement means an agreement among a broker or intermediary holding an Investment Account, a Debtor, the Collateral Agent,
and, if applicable, the Priority Lien Collateral Agent, in form and substance reasonably satisfactory to the Lead Holder and the
Collateral Agent.


 


Laws means all applicable
statutes, laws, treaties, ordinances, tariffs requirements, rules, regulations, orders, writs, injunctions, decrees, judgments,
opinions, or interpretations of any Governmental Authority.


 


Lead Holder means
EIG Redwood Debt Aggregator, LP; provided that, at the point during which the funds or Persons managed or advised
by EIG Management Company, LLC or its Affiliates cease to hold more than 50.1% of the outstanding principal amount of the Notes,
any reference to the term “Lead Holder” contained in this Security Agreement shall no longer be applicable and shall
have further no force and effect.


 


Obligor means any
Person obligated with respect to any of the Collateral, whether as an account debtor, obligor on an instrument, issuer of securities,
or otherwise.


 


Partnerships shall
mean (a) those partnerships and limited liability companies listed under the caption “Pledged LLC Interests” or
“Pledged Partnership Interests” on Annex C attached hereto and incorporated herein by reference,
as such partnerships or limited liability companies exist or may hereinafter be restated, amended, or restructured, (b) any
other partnership, joint venture, or limited liability company in which any Debtor shall, at any time, become a limited or general
partner, venturer, or member, and (c) any partnership, joint venture, or corporation formed as a result of the restructure,
reorganization, or amendment of any of the foregoing.


 


Partnership Agreements
shall mean those agreements governing the Partnerships.


 


Partnership Interests
shall mean all of each Debtor’s Right, title and interest now or hereafter accruing under the Partnership Agreements with
respect to all distributions, allocations, proceeds, fees, preferences, payments, or other benefits, which such Debtor now is or
may hereafter become entitled to receive with respect to such interests in the Partnerships and with respect to the repayment of
all loans now or hereafter made by each Debtor to the Partnerships.


 


Patents has
the meaning set forth in Paragraph 3(g) hereof.


 


Permitted Liens
means liens permitted under the Indenture.


 




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Pledged Securities
means, collectively, the Pledged Shares and any other Collateral consisting of securities.


 


Pledged Shares
has the meaning set forth in Paragraph 3(c) hereof.


 


RBL Credit Agreement
means that certain Third Amended and Restated Credit Agreement, dated as of November 19, 2014, by and among the Company, the Parent
Debtor, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as amended, restated, amended and
restated, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and as permitted under
any Intercreditor Agreement and the Indenture.


 


Rights means rights,
remedies, powers, privileges, and benefits.


 


Secured Obligations
means all Obligations of the Debtors under the Notes or any other Note Document.


 


Secured Parties
means, at any time, the Collateral Agent, the Holders of the Notes and each other holder of any Secured Obligation.


 


Security Interest
means the security interest granted and the pledge and assignment made under Paragraph 2 hereof.


 


Trademarks
has the meaning set forth in Paragraph 3(h) hereof.


 


UCC means the Uniform
Commercial Code, including each such provision as it may subsequently be renumbered, as in effect from time to time in the State
of New York; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the
perfection or priority of, or remedies with respect to, any Collateral is governed by the Uniform Commercial Code as enacted and
in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code
as enacted and in effect in such other jurisdiction solely for purposes of the provisions hereof relating to such perfection, priority
or remedies.


 


(b)        The
interpretive terms set forth in Section 1.04 of the Indenture shall be applicable to this Security Agreement.


 


2.          SECURITY
INTEREST. In order to secure the full and complete payment and performance of the Secured Obligations when due, each Debtor
hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a security interest in and a lien on all of such
Debtor’s Rights, titles, and interests in and to the Collateral and pledges, collaterally transfers, and assigns the Collateral
to the Collateral Agent, for the benefit of the Secured Parties, all upon and subject to the terms and conditions of this Security
Agreement. Such Security Interest is granted and such pledge and assignment are made as security only and shall not subject the
Collateral Agent to, or transfer or in any way affect or modify, any obligation of any Debtor with respect to any of the Collateral
or any transaction involving or giving rise thereto. If the grant, pledge, or collateral transfer or assignment of any specific
item of the Collateral is expressly prohibited by any contract, then the Security Interest created hereby nonetheless remains effective
to the extent allowed by the UCC or other applicable Law, but is otherwise limited by that prohibition.


 


3.          COLLATERAL.
As used herein, the term “Collateral” means the following items and types of property, wherever located,
now owned or in the future existing or acquired by any and all Debtors, and all proceeds and products thereof, and any substitutes
or replacements therefor; provided, however, that the term “Collateral” expressly excludes the Excluded
Assets and the Excluded Equity Interests:


 




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(a)   All
personal property and fixture property of every kind and nature including all goods (including equipment, and any accessions thereto),
software, investment property, money, cash, letters of credit, letter-of-credit rights, supporting obligations, Tax refunds, accounts,
any and all contract rights, chattel paper (whether tangible or electronic), instruments, documents, general intangibles (including
payment intangibles), and other obligations of any kind (including all rights to receive crude oil or petroleum products, to receive
payments of money or to receive other value pursuant to contracts, agreements or other arrangements with other Persons, for the
trading, lending, borrowing, or exchanging of crude oil or petroleum products in the ordinary course of business) relating thereto,
now or hereafter existing;


 


(b)   All
inventory, including all (A) crude oil, natural gas and natural gas liquids, other hydrocarbons and ethanol (together, “Feedstocks”),
(B) Feedstocks that have been partially processed or refined as isomerate, cat feed, gasoline components or naptha (together, “Intermediate
Products”) and (C) gasoline, diesel, aviation fuel, fuel oil, propane, ethanol, transmix and other products processed,
refined or blended from Feedstocks and Intermediate Products, and all accessions to and products of any of the foregoing, and documents
relating to any of the foregoing, now owned or in the future existing or acquired by each Debtor;


 


(c)   All
Rights, titles, and interests of each Debtor in and to all outstanding stock, equity, membership interests or units, or other investment
securities owned by such Debtor (for the avoidance of doubt, other than Excluded Equity Interests), including all capital stock
equity, membership interests or units of any subsidiary of such Debtor set forth under the caption “Pledged Stock”
on Annex C (the “Pledged Shares”) and including, without limitation, (i) all governance
rights, rights to vote, consent to action and other participation in the management of the issuer and right to admittance as member
of the issuer and (ii) all economic rights (including, without limitation, all rights to share in the profits or loss of any issuer
and the right to receive distributions of the assets of the issuer);


 


(d)   All
Rights, titles, and interests of each Debtor in and to all promissory notes and other instruments payable to such Debtor and
all Rights, titles, interests, and Liens such Debtor may have, be, or become entitled to under all present and future loan agreements,
security agreements, pledge agreements, deeds of trust, mortgages, guarantees, or other documents assuring or securing payment
of or otherwise evidencing such promissory notes and other instruments;


 


(e)         The
Partnership Interests and all Rights of each Debtor with respect thereto, including all Partnership Interests set forth under the
caption “Pledged LLC Interests” or “Pledged Partnership Interests” on Annex C and all of
each Debtor’s distribution rights, income rights, liquidation interest, accounts, contract rights, governance rights, rights
to vote, consent to action and other participation in the management of the issuer, the right to replace Debtor as partner of the
issuer, general intangibles, notes, instruments, drafts, and documents relating to the Partnership Interests;


 


(f)         (i)  All
copyrights (whether statutory or common law, registered or unregistered), works protectable by copyright, copyright registrations,
written copyright licenses, and copyright applications of each Debtor, including the interests described on Annex B
and including all of such Debtor’s Right, title, and interest in and to all copyrights registered in the United States Copyright
Office or anywhere else in the world; (ii) all renewals, extensions, and modifications thereof; (iii) all income, licenses,
royalties, damages, profits, and payments relating to or payable under any of the foregoing; (iv) the Right to sue for past,
present, or future infringements of any of the foregoing; and (v) all other Rights and benefits relating to any of the foregoing
throughout the world; in each case, whether now owned or hereafter acquired by each Debtor (“Copyrights”);


 




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(g)          (i) All
patents, patent applications, written patent licenses, and patentable inventions of each Debtor, including the interests described
on Annex B and including registrations, recordings, and applications thereof in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision
thereof, and all of the inventions and improvements described and claimed therein; (ii) all continuations, divisions, renewals,
extensions, modifications, substitutions, reexaminations, continuations-in-part, or reissues of any of the foregoing; (iii) all
income, royalties, profits, damages, awards, and payments relating to or payable under any of the foregoing; (iv) the Right
to sue for past, present, and future infringements of any of the foregoing; and (v) all other Rights and benefits relating
to any of the foregoing throughout the world; in each case, whether now owned or hereafter acquired by each Debtor (“Patents”);


 


(h)          (i) All
trademarks, written trademark licenses, trade names, corporate names, company names, business names, fictitious business names,
trade styles, service marks, certification marks, collective marks, logos, other business identifiers, all registrations, recordings,
and applications thereof, including the interests described on Annex B and including registrations, recordings, and
applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state
thereof or any other country or any political subdivision thereof; (ii) all reissues, extensions, and renewals thereof; (iii) all
income, royalties, damages, and payments now or hereafter relating to or payable under any of the foregoing, including damages
or payments for past or future infringements of any of the foregoing; (iv) the Right to sue for past, present, and future
infringements of any of the foregoing; (v) all Rights corresponding to any of the foregoing throughout the world; and (vi) all
goodwill associated with and symbolized by any of the foregoing, in each case, whether now owned or hereafter acquired by each
Debtor (“Trademarks”, and collectively with the Copyrights and the Patents, the “Intellectual
Property”);


 


(i)          All
present and future automobiles, trucks, truck tractors, trailers, semi-trailers, or other motor vehicles or rolling stock, now
owned or hereafter acquired by each Debtor (collectively, the “Vehicles”);


 


(j)          (i)
All of each Debtor’s Rights, titles, and interests in, to, and under the Assigned Agreements, including all Rights
of each Debtor to receive moneys due and to become due under or pursuant to the Assigned Agreements, (ii) all Rights of each
Debtor to receive proceeds of any insurance, indemnity, warranty, or guaranty with respect to the Assigned Agreements, (iii) all
claims of each Debtor for damages arising out of or for breach of or default under the Assigned Agreements, and (iv) all Rights
of each Debtor to compel performance and otherwise exercise all rights and remedies under the Assigned Agreements;


 


(k)          All
commercial tort claims, including those described on Annex B;


 


(l)          Any
and all deposit accounts and bank accounts, now owned or hereafter acquired or opened by each Debtor, including any such accounts
set forth on Annex B, and any account which is a replacement or substitute for any of such accounts (the “Deposit
Accounts”), together with all monies, instruments, certificates, checks, drafts, wire transfer receipts, and other
property deposited therein and all balances therein;


 


(m)          Any
and all investment accounts, commodity accounts, and securities accounts, now owned or hereafter acquired or opened by each Debtor,
including any such accounts set forth on Annex B, and any account which is a replacement or substitute for any of
such accounts (the “Investment Accounts”), together with all securities, securities entitlements, monies,
instruments, certificates, checks, drafts, wire transfer receipts, and other property deposited therein and all balances therein;


 




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(n)          All
present and future distributions, income, increases, profits, combinations, reclassifications, improvements, and products of, accessions,
attachments, and other additions to, tools, parts, and equipment used in connection with, and substitutes and replacements for,
all or part of the Collateral described above;


 


(o)          All
present and future accounts, contract rights, general intangibles, chattel paper, documents, instruments, cash and noncash proceeds,
and other Rights arising from or by virtue of, or from the voluntary or involuntary sale or other disposition of, or collections
with respect to, or insurance proceeds payable with respect to, or proceeds payable by virtue of warranty or other claims against
the manufacturer of, or claims against any other Person with respect to, all or any part of the Collateral heretofore described
in this Paragraph 3 or otherwise;


 


(p)          All
present and future security for the payment to each Debtor of any of the Collateral described above and goods which gave or will
give rise to any such Collateral or are evidenced, identified, or represented therein or thereby; and


 


(q)          To
the extent not otherwise included herein, all Rights of each Debtor to receive payments under any indemnity, warranty, or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the Collateral.


 


The description of the Collateral contained
in this Paragraph 3 shall not be deemed to permit any action prohibited by this Security Agreement or by the terms
incorporated in this Security Agreement.


 


4.          REPRESENTATIONS
AND WARRANTIES. Each of the Company and the Parent Debtor represents and warrants and each other Debtor represents and warrants
solely as to itself and not to any other Debtor, to the Secured Parties as of the Effective Date that:


 


(a)          Binding
Obligation/Perfection. This Security Agreement creates a legal, valid, and binding Lien in and to the Collateral of such Debtor
in favor of the Collateral Agent for the benefit of the Secured Parties and enforceable against such Debtor, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general
principals of equity, regardless of whether considered in a proceeding in equity or at law. For Collateral in which the Security
Interest may be perfected by the filing of financing statements, once those financing statements have been properly filed in the
jurisdictions described on Annex A hereto, the Security Interest in that Collateral will be fully perfected
and the Security Interest will constitute a second-priority Lien on such Collateral, subject only to Permitted Liens. Except as
permitted under the Intercreditor Agreement, the Indenture or the other Note Documents, none of the Collateral has been delivered
to nor has “control” (as defined in Section 8-106, 9-104, 9-105, 9-106 and/or 9-107 of the UCC) with respect
thereto been given to any other Person other than to the Collateral Agent for the benefit of the Secured Parties. Other than the
financing statements with respect to this Security Agreement and the Deposit Account Control Agreements and Investment Account
Control Agreements executed in connection herewith, there are no other financing statements or control agreements covering any
Collateral, other than those evidencing Permitted Liens. The creation of the Security Interest in the Collateral does not require
the consent of any Person that has not been obtained.


 




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(b)          Debtor
Information. Such Debtor’s exact legal name, mailing address, jurisdiction of organization, type of entity, and state
issued organizational identification number (if any) are as set forth on Annex A hereto. Such Debtor’s sole
place of business or chief executive office is where such Debtor is entitled to receive notices hereunder; the present and foreseeable
location of such Debtor’s books and records concerning any of the Collateral is as set forth on Annex A
hereto.


 


(c)          Liens.
Such Debtor owns all currently existing Collateral, and will acquire all hereafter-acquired Collateral, free and clear of all Liens,
except Permitted Liens.


 


(d)          Collateral.
Annex B for such Debtor accurately describes Deposit Accounts (other than Deposit Accounts that constitute Excluded
Assets pursuant to clause (iv) of such definition), Investment Accounts, and commercial tort claims, in the case of commercial
tort claims, having a value individually or in the aggregate in excess of $20,000,000 in which such Debtor has any Rights, titles,
or interest.


 


(e)          Deposit
Accounts. (i) With respect to the Deposit Accounts described in the preceding clause (d), such Debtor has the legal Right to
pledge and assign to the Collateral Agent, for the benefit of the Secured Parties, the funds deposited and to be deposited in each
such Deposit Account and (ii) the Deposit Accounts set forth on Annex B applicable to such Debtor represent all such
Deposit Accounts of such Debtor.


 


(f)          Investment
Accounts. With respect to the Investment Accounts described in the preceding clause (d), (i) such Debtor has the legal Right
to pledge and assign to the Collateral Agent, for the benefit of the Secured Parties, the securities and security entitlements
deposited and to be deposited in each such Investment Account and (ii) the Investment Accounts set forth on Annex B
applicable to such Debtor represent all such Investment Accounts of such Debtor.


 


(g)          Commercial
Tort Claims. On the Effective Date, no Debtor holds any commercial tort claims having a value individually or in the aggregate
in excess of $20,000,000 except as described on Annex B.


 


(h)          Governmental
Authority. Except UCC financing statement filings and intellectual property filings and payment of applicable filing fees,
no authorization, approval, or other action by, and no notice to or filing with, any Governmental Authority is required either
(i) for the pledge by such Debtor of the Collateral pursuant to this Security Agreement or for the execution, delivery, or
performance of this Security Agreement by such Debtor, or (ii) for the exercise by the Collateral Agent of the voting or other
Rights provided for in this Security Agreement or the remedies in respect of the Collateral pursuant to this Security Agreement
(except as may be required in connection with the disposition of the Pledged Securities by Laws affecting the offering and
sale of securities generally).


 


(i)          Pledged
Securities; Pledged Shares. All Collateral of such Debtor that is Pledged Shares is (or, in the case of Pledged Shares issued
by Persons that are not Affiliates of such Debtor, to the knowledge of such Debtor is) duly authorized, validly issued, fully paid,
and non-assessable, and the transfer thereof is not subject to any restrictions, other than restrictions imposed by applicable
Laws or with respect to which any required consent, approval or authorization has been obtained. Annex C contains
an accurate description as of the Effective Date of the Equity interests owned by such Debtor. Such Debtor has good title to the
Pledged Securities of such Debtor, free and clear of all Liens and encumbrances thereon (except for Permitted Liens), and
has delivered to the Collateral Agent (or to the Priority Lien Collateral Agent in accordance with the Intercreditor Agreement)
(i) all stock certificates, or other instruments or documents representing or evidencing such Pledged Securities, together with
corresponding assignment or transfer powers duly executed in blank by such Debtor, and such powers have been duly and validly executed
and are binding and enforceable against such Debtor in accordance with their terms or (ii) to the extent such Pledged Securities
are uncertificated and constitute securities for purposes Article 8 of the UCC, or if otherwise required by the Lead Holder or
the Collateral Agent, an executed Acknowledgment of Pledge substantially in the form of Annex D. The pledge
of the Pledged Securities owned by such Debtor in accordance with the terms hereof creates a valid and perfected second priority
security interest in such Pledged Securities securing payment of the Secured Obligations, subject only to Permitted Liens.


 




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(j)          Partnership
Interests. Each Partnership listed on Annex C is duly organized, currently existing, and in good standing under
the Laws of its jurisdiction of organization or formation; there have been no amendments, modifications, or supplements to any
agreement or certificate creating any such Partnership or any material contract relating to such Partnerships, of which the Lead
Holder and the Collateral Agent have not been advised in writing; and no approval or consent of the partners of any such Partnership
is required as a condition to the validity and enforceability of the Security Interest created hereby or the consummation of the
transactions contemplated hereby which has not been duly obtained by the relevant Debtor. Each Debtor has good title to the Partnership
Interests owned by such Debtor free and clear of all Liens and encumbrances (except for Permitted Liens). The Partnership
Interests owned by such Debtor are (or, in the case of Partnership Interests issued by Persons that are not Affiliates of such
Debtor, to the knowledge of such Debtor are) validly issued, fully paid, and nonassessable and are not subject to statutory, contractual,
or other restrictions governing their transfer, ownership, or control, except as set forth in the applicable Partnership
Agreements or applicable Laws. All capital contributions required to be made by the terms of such Partnership Agreements for each
Partnership have been made.


 


5.          COVENANTS.
So long as any Obligation (other than Obligations in respect of indemnification or expense reimbursement for which no claim has
been made) shall remain unpaid or unsatisfied, each Debtor covenants and agrees with the Collateral Agent that such Debtor will:


 


(a)          [Reserved.]


 


(b)          Perform
Obligations. Notwithstanding anything to the contrary contained herein, (i) such Debtor shall remain liable under and/or with
respect to the Collateral, including the contracts, agreements, documents, and instruments included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Security Agreement had
not been executed and nothing contained herein is intended or shall be a delegation of duties to the Collateral Agent or any other
Secured Party, (ii) the exercise by the Collateral Agent of any of its rights or remedies hereunder shall not release such Debtor
from any of its duties or obligations under the contracts, agreements, documents, and instruments included in the Collateral, (iii)
the Collateral Agent shall not have any indebtedness, liability, or obligation under and/or with respect to the Collateral, including
any of the contracts, agreements, documents, and instruments included in the Collateral by reason of this Security Agreement or
any other document related thereto, and the Collateral Agent shall not be obligated to perform any of the obligations or duties
of such Debtor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder, (iv) neither the
Collateral Agent nor any other Secured Party shall have any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or enforce any rights under any Assigned Agreement
included in the Collateral, and (v) the exercise by the Collateral Agent of any of its rights hereunder shall not release any Debtor
from any of its duties or obligations under the Assigned Agreements included in the Collateral.


 




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(c)          Annexes;
Notices. (i) As soon as reasonably practicable, update all annexes hereto of such Debtor if any information therein shall become
inaccurate or incomplete; provided that, notwithstanding any other provision herein, such Debtor’s failure
to describe any Collateral required to be listed on any annex hereto shall not impair the Secured Parties’ Security Interest
in the Collateral; (ii) promptly notify the Lead Holder and the Collateral Agent of (A) any material change in any fact or
circumstances represented or warranted by such Debtor with respect to any of the Collateral, (B) any claim, action, or proceeding
affecting title to Collateral of such Debtor or the Security Interest in such Collateral and, at the reasonable written request
of the Lead Holder or the Collateral Agent, appear in and defend, at such Debtor’s expense, any such action or proceeding,
(C) any material damage to or loss of Collateral, and (D) the occurrence of any other event(s) or condition(s) (including
matters as to Lien priority) that could reasonably be expected to have a Material Adverse Effect on the Collateral; and (iii) give
the Lead Holder and the Collateral Agent fifteen (15) days written notice before (or by such later
date as the Lead Holder and the Collateral Agent may agree in its sole discretion) any proposed (A) relocation of its principal
place of business or chief executive office, (B) change of its name, identity, or corporate structure, (C) relocation of the place
where its books and records concerning its accounts are kept or (D) change of its jurisdiction of organization or organizational
identification number, as applicable. Prior to making any of the changes contemplated in the preceding clause (iii),
such Debtor shall execute and deliver (or, if the Lead Holder so agrees, agree to execute and deliver) all such additional documents
and perform all additional acts as the Lead Holder or the Collateral Agent may reasonably request in order to continue or maintain
the existence and required priority of the Security Interests in all of the Collateral.


 


(d)          Collateral
in Trust. After the occurrence and during the continuance of an Event of Default, (i) hold in trust for the Secured Parties
all Collateral that is chattel paper, instruments, or documents at any time received by such Debtor, (ii) upon the request of the
Lead Holder or the Collateral Agent, promptly deliver to the Collateral Agent (or to the Priority Lien Collateral Agent in accordance
with the Intercreditor Agreement) all collateral of the type described in this Paragraph (d), (iii) upon the request
of the Lead Holder or the Collateral Agent, mark any chattel paper, instruments, or documents retained by such Debtor to state
that they are assigned to the Collateral Agent (or to the Priority Lien Collateral Agent in accordance with the Intercreditor Agreement),
and (iv) upon the request of the Lead Holder or the Collateral Agent, endorse each such instrument to the Collateral Agent (or
to the Priority Lien Collateral Agent in accordance with the Intercreditor Agreement) (but the failure of same to be so marked
or endorsed shall not impair the Security Interest thereon).


 


(e)          Control.
Execute all documents and take any action reasonably required by the Collateral Agent in order for the Collateral Agent to obtain
“control” within the meaning of Section 8-106, 9-104, 9-105, 9-106 and/or 9-107 (as applicable) of the UCC)
with respect to Collateral of such Debtor consisting of Deposit Accounts, Investment Accounts and other investment property, electronic
chattel paper and letter-of-credit rights (other than to the extent constituting Excluded Assets). If such Debtor at any time holds
or acquires an interest in any “transferable record,” as that term is defined in the federal Electronic Signatures
in Global and National Commerce Act, or in the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction (the
“UETA”), promptly notify the Lead Holder and the Collateral Agent thereof and, at the request of the
Lead Holder or the Collateral Agent, take such action as the Lead Holder or the Collateral Agent may reasonably request to establish
the Collateral Agent’s control (within the meaning of Section 16 of the UETA) over such “transferable record”.


 


(f)          Transfers;
Encumbrances. Not sell, assign, transfer, lease, charter or otherwise dispose of the Collateral or any part thereof or any
interest therein, or offer to do any of the foregoing, except as permitted by the Indenture; and not create, permit, or suffer
to exist, and shall defend the Collateral against, any Lien or other encumbrance on the Collateral other than Permitted Liens,
and shall defend such Debtor’s rights in the Collateral and the Collateral Agent’s Security Interest in the Collateral
against the claims and demands of all Persons except those holding or claiming Permitted Liens.


 




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(g)          Delivery
of Chattel Paper and Instruments. At the request of the Lead Holder or the Collateral Agent, deliver all of such Debtor’s
instruments and chattel paper to the Collateral Agent (or to the Priority Lien Collateral Agent in accordance with the Intercreditor
Agreement), together with corresponding endorsements duly executed by the relevant Debtor in favor of the Collateral Agent for
the benefit of the Secured Parties.


 


(h)          Further
Assurances. Subject to the Intercreditor Agreement and at the cost of such Debtor, from time to time promptly execute and deliver
to the Collateral Agent all such assignments, certificates, supplemental documents, and financing statements, and do all other
acts or things as the Lead Holder or the Collateral Agent may reasonably request in order to more fully create, evidence, perfect,
continue, and preserve the priority of the Security Interest, to carry out the provisions of this Security Agreement and to enable
the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral; and pay all filing
fees in connection with any financing, continuation, or termination statement or other instrument with respect to the Security
Interests granted by such Debtor.


 


(i)          Commercial
Tort Claims. If such Debtor shall at any time hold or acquire a commercial tort claim other than or in addition to those set
forth on Annex B relating to any of the Collateral and having a value individually or in the aggregate in excess
of $20,000,000 (each such commercial tort claim, an “Additional Commercial Tort Claim”), such Debtor
shall promptly notify the Lead Holder and the Collateral Agent in a writing authenticated by such Debtor of the brief details of
such Additional Commercial Tort Claim. Such Debtor shall grant to the Collateral Agent for the benefit of the Secured Parties in
such writing a security interest in such Additional Commercial Tort Claim and in the proceeds thereof, all in accordance with and
subject to the terms of this Security Agreement and such writing shall be in form and substance reasonably satisfactory to the
Lead Holder and the Collateral Agent. Each Debtor hereby agrees to execute and deliver any additional documents or instruments,
including any financing statements or amendments to any then existing financing statements, that the Lead Holder or the Collateral
Agent reasonably deems necessary to create, perfect, and protect the Collateral Agent’s Lien on and security interest in
such Additional Commercial Tort Claim.


 


(j)          Securities.
(i) Except as permitted by the Indenture: (A) not sell, exchange, or otherwise dispose of, or grant any option, warrant, or other
Right with respect to, any of the Pledged Securities owned by it; (B) to the extent any issuer of any Pledged Securities is controlled
by such Debtor and/or its Affiliates, not permit such issuer to issue any additional shares of stock or other securities in addition
to or in substitution for such Pledged Securities, except issuances to such Debtor on terms reasonably acceptable to the Lead Holder
and the Collateral Agent; and (C) pledge hereunder, immediately upon such Debtor’s acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other securities of each Subsidiary of such Debtor (other than any such additional shares
or securities that constitute Excluded Equity Interests); and (ii) subject to the Intercreditor Agreement, take any action necessary,
required, or reasonably requested by the Lead Holder or the Collateral Agent to allow the Collateral Agent to fully enforce its
Security Interest in the Pledged Securities including the filing of any claims with any court, liquidator, trustee, custodian,
receiver, or other like person or party. In the event an uncertificated Pledged Security is certificated or the issuer thereof
opts to have its Pledged Equity treated as “securities” for purposes of Article 8 of the UCC, Debtor shall promptly
thereafter deliver the certificate to the Collateral Agent (or the Priority Lien Collateral Agent in accordance with the Intercreditor
Agreement) with an undated executed irrevocable stock power and such other documents as the Collateral Agent may require in connection
therewith. Debtor shall not permit an uncertificated Pledged Security to constitute a “security” under Article 8 of
the UCC unless Debtor has delivered to Secured Party a fully executed Acknowledgment of Pledge substantially in the form of Annex
D. The Collateral Agent agrees that it shall not deliver instructions or make any demand under any Acknowledgment of Pledge
unless an Event of Default has occurred and is continuing.


 




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(k)          Partnerships
and Partnership Interests. (i) Notify the Lead Holder and the Collateral Agent of the occurrence of any default or breach
or event of default under any contract or agreement creating or relating to the Partnerships owned by such Debtor if such default,
breach or event of default could reasonably be expected to have a Material Adverse Effect or to materially adversely affect the
Collateral Agent or its interests in such Partnerships; (ii) to the extent any Partnership is controlled by such Debtor and/or
its Affiliates, cause such Partnership to refrain from granting any Partnership Interests in addition to or in substitution for
the Partnership Interests granted by the Partnerships, except to a Debtor or as permitted by the Indenture; (iii) pledge
hereunder, immediately upon such Debtor’s acquisition (directly or indirectly) thereof, any and all additional Partnership
Interests of any Partnership other than Partnership Interests constituting Excluded Equity Interests granted to such Debtor; and
any and all additional shares of stock or other securities of each; (iv) deliver to the Collateral Agent (with a copy to the
Lead Holder) a fully-executed Acknowledgment of Pledge, substantially in the form of Annex D with respect of
any Partnership Interests unless otherwise agreed by the Collateral Agent, for each Partnership Interest; and (v) subject
to the Intercreditor Agreement, take any action necessary, required, or reasonably requested by the Lead Holder or the Collateral
Agent to allow the Collateral Agent to fully enforce its Security Interest in the Partnership Interests, including the filing of
any claims with any court, liquidator, trustee, custodian, receiver, or other like person or party. In the event an uncertificated
Partnership Interest is certificated or the issuer thereof opts to have its Pledged Equity treated as “securities”
for purposes of Article 8 of the UCC, Debtor shall promptly thereafter deliver the certificate to the Collateral Agent (or the
Priority Lien Collateral Agent in accordance with the Intercreditor Agreement) with an undated executed irrevocable company/partnership
interest power and such other documents as the Collateral Agent may require in connection therewith. Debtor shall not permit an
uncertificated Partnership Interest to constitute a “security” under Article 8 of the UCC unless Debtor has delivered
to Secured Party a fully executed Acknowledgment of Pledge substantially in the form of Annex D. The Collateral Agent
agrees that it shall not deliver instructions or make any demand under any Acknowledgment of Pledge unless an Event of Default
has occurred and is continuing.


 


(l)          Deposit
Accounts. (i) No Debtor shall establish or maintain a Deposit Account or an Investment Account without executing and delivering
to the Collateral Agent (with a copy to the Lead Holder) a Deposit Account Control Agreement or an Investment Account Control Agreement,
as applicable, in form and substance reasonably satisfactory to the Lead Holder and the Collateral Agent, covering the applicable
Deposit Account or Investment Account; and (ii) once a Deposit Account Control Agreement or an Investment Account Control Agreement,
as applicable, has been so executed and delivered, no Debtor will deposit or maintain Collateral (including the proceeds thereof)
in a Deposit Account or an Investment Account that is not subject to a Deposit Account Control Agreement or an Investment Account
Control Agreement, as applicable; provided, however, that in the case of Deposit Accounts or Investment Accounts acquired
pursuant to an Acquisition permitted under the terms of the Indenture (and which were not formed in contemplation of such Acquisition),
so long as the Debtor provides the Lead Holder and the Collateral Agent with written notice of the existence of such Deposit Account
or Investment Account within five (5) Business Days following the date of the Acquisition (or such later date as the Lead Holder
and the Collateral Agent may agree), the Debtor will have sixty (60) days to subject such Deposit Account or Investment Account
to a Deposit Account Control Agreement or Investment Account Control Agreement, as applicable. Notwithstanding the forgoing, this
Section 5(l) shall not apply to any Deposit Account exclusively used for trust, payroll, payroll taxes and other employee wage
and benefit payments to or for the benefit of any Debtor’s employees.


 


(m)       Finance
Corp. Notwithstanding anything set forth herein or in any other Note Document to the contrary, under no circumstances (i)
shall Finance Corp. issue (or shall any Debtor cause Finance Corp. to issue) certificated Equity Interests or (ii) any Debtor
grant control to any Person over the Equity Interests of Finance Corp. (whether by control agreement or otherwise) other than,
in the case of clause (ii), to the Priority Lien Collateral Agent or the Collateral Agent; provided, however, upon
granting such control to the Priority Lien Agent, such Debtor must substantially simultaneously therewith grant such control to
the Collateral Agent, subject to the Intercreditor Agreement.


 




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6.          DEFAULT;
REMEDIES. If an Event of Default exists, the Collateral Agent may, at its election in its sole discretion, and shall, at the
written direction of the Lead Holder or Majority Holders (but subject to the terms and conditions of the Intercreditor Agreement
and the other Note Documents), exercise any and all rights available to the Secured Parties under the UCC, in addition to any and
all other rights afforded by the Note Documents, at Law, in equity, or otherwise, including (a) requiring any and all Debtors to
assemble all or part of the Collateral and make it available to the Collateral Agent at a place to be designated by the Collateral
Agent, (b) surrendering any policies of insurance on all or part of the Collateral and receiving and applying the unearned premiums
as a credit on the Obligations, (c) applying by appropriate judicial proceedings for appointment of a receiver for all or part
of the Collateral (and each Debtor hereby consents to any such appointment), (d) applying to the Obligations any cash held by the
Collateral Agent under this Security Agreement and (e) in accordance with the Deposit Account Control Agreements and/or Investment
Account Control Agreements, as applicable, giving any instructions directing the disposition of funds from time to time credited
to any Deposit Account or Investment Account and withholding any withdrawal rights from a Debtor with respect to funds from time
to time credited to any Deposit Account or Investment Account.


 


(a)          Sales;
Notice. The Collateral Agent or any other Secured Party may be the purchaser of any or all of the Collateral at any public
or private (to the extent to the portion of the Collateral being privately sold is of a kind that is customarily sold on a recognized
market or the subject of widely distributed standard price quotations) sale in accordance with the UCC and the Collateral Agent,
as collateral trustee for and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold at any such sale made in accordance with the UCC,
to use and apply any of the Secured Obligations as a credit on account of the purchase price for any Collateral payable by the
Collateral Agent at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right
on the part of any Debtor, and each Debtor hereby waives (to the extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter
enacted. Reasonable notification of the time and place of any public sale of the Collateral, or reasonable notification of the
time after which any private sale or other intended disposition of the Collateral is to be made, shall be sent to the relevant
Debtor and to any other Person entitled to notice under the UCC or other applicable law; provided that, if any of the Collateral
threatens to decline speedily in value or is of the type customarily sold on a recognized market, the Collateral Agent may sell
or otherwise dispose of the Collateral without notification, advertisement, or other notice of any kind. It is agreed that notice
sent or given not less than ten (10) Business Days prior to the taking of the action to which the notice relates is reasonable
notification and notice for the purposes of this subparagraph. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Debtor agrees that it would not be commercially unreasonable for the Collateral Agent
to dispose of the Collateral or any portion thereof by using Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Each
Debtor hereby waives any claims against the Collateral Agent arising by reason of the fact that the price at which any Collateral
may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds
of any sale or other disposition of the Collateral are insufficient to pay all the Secured Obligations, Debtors shall be liable
for the deficiency and the fees of any attorneys employed by the Collateral Agent to collect such deficiency. Each Debtor further
agrees that a breach of any of the covenants contained in this Paragraph 6 will cause irreparable injury to
the Collateral Agent, that the Collateral Agent has no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Paragraph 6 shall be specifically enforceable against such
Debtor, and such Debtor hereby waives and agrees not to assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities. Nothing in this Paragraph 6 shall in any way limit the rights of the Collateral
Agent hereunder.


 




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(b)          Condition
of Collateral; Warranties. The Collateral Agent has no obligation to clean up or otherwise prepare the Collateral for sale.
The Collateral Agent may sell the Collateral without giving any warranties as to the Collateral. The Collateral Agent may specifically
disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness
of any sale of the Collateral. The Collateral Agent shall have no obligation to marshal any of the Collateral.


 


(c)          Sales
of Pledged Securities.


 


(i)          Each
Debtor agrees that, because of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder (collectively,
the “Securities Act”), or any other Laws or regulations, and for other reasons, there may be legal or
practical restrictions or limitations affecting the Collateral Agent in any attempts to dispose of certain portions of the Pledged
Securities and for the enforcement of its Rights. For these reasons, the Collateral Agent is hereby authorized by each Debtor,
but not obligated, upon the occurrence and during the continuation of an Event of Default, to sell all or any part of the Pledged
Securities at private sale, subject to investment letter or in any other manner which will not require the Pledged Securities,
or any part thereof, to be registered in accordance with the Securities Act or any other Laws or regulations, at a reasonable price
at such private sale or other distribution in the manner mentioned above. Each Debtor understands that the Collateral Agent may
in its discretion approach a limited number of potential purchasers and that a sale under such circumstances may yield a lower
price for the Pledged Securities, or any part thereof, than would otherwise be obtainable if such Collateral were either afforded
to a larger number or potential purchasers, registered under the Securities Act, or sold in the open market. Each Debtor agrees
that any such private sale made under this Paragraph 6(c) shall be deemed to have been made in a commercially
reasonable manner, and that the Collateral Agent has no obligation to delay the sale of any Pledged Securities to permit the issuer
thereof to register it for public sale under any applicable federal or state securities Laws.


 


(ii)         The
Collateral Agent is authorized, but not obligated, in connection with any such sale, (A) to restrict the prospective bidders on
or purchasers of any of the Pledged Securities to a limited number of sophisticated investors who will represent and agree that
they are purchasing for their own account for investment and not with a view to the distribution or sale of any of such Pledged
Securities, and (B) to impose such other limitations or conditions in connection with any such sale as the Lead Holder or the Collateral
Agent reasonably deems necessary in order to comply with applicable Law. Each Debtor covenants and agrees that it will execute
and deliver such documents and take such other action as the Lead Holder or the Collateral Agent reasonably deems necessary in
order that any such sale may be made in compliance with applicable Law. Upon any such sale the Collateral Agent shall have the
Right to deliver, assign, and transfer to the purchaser thereof the Pledged Securities so sold. Each purchaser at any such sale
shall hold the Pledged Securities so sold absolutely free from any claim or Right of any Debtor of whatsoever kind, including any
equity or Right of redemption of any Debtor. Each Debtor, to the extent permitted by applicable Law, hereby specifically waives
all Rights of redemption, stay, or appraisal which it has or may have under any Law now existing or hereafter enacted.


 




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(iii)        Each
Debtor agrees that ten (10) days’ written notice from the Lead Holder or the Collateral Agent,
to such Debtor of the Collateral Agent’s intention to make any such public or private sale or sale of such Debtor’s
Pledged Securities at a broker’s board, on a securities exchange or otherwise (except as expressly provided above) shall
constitute reasonable notice under the UCC. Such notice shall (A) in case of a public sale, state the time and place fixed for
such sale, (B) in case of sale at a broker’s board or on a securities exchange, state the board or exchange at which such
a sale is to be made and the day on which such Pledged Securities, or the portion thereof so being sold, will first be offered
for sale at such board or exchange, and (C) in the case of a private sale, state the day after which such sale may be consummated.
Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral
Agent may fix in the notice of such sale. At any such sale, all Pledged Securities may be sold in one lot as an entirety or in
separate parcels, as the Lead Holder or the Collateral Agent may reasonably determine. The Collateral Agent shall not be obligated
to make any such sale pursuant to any such notice. The Collateral Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the same may be so adjourned.


 


(iv)        In
case of any sale of all or any part of the Pledged Securities on credit or for future delivery, the Pledged Securities so sold
may be retained by the Collateral Agent until the selling price is paid by the purchaser thereof, but the Collateral Agent shall
not incur any liability in case of the failure of such purchaser to take up and pay for the Pledged Securities so sold and in case
of any such failure, such Pledged Securities may again be sold upon like notice. The Collateral Agent, instead of exercising the
power of sale herein conferred upon it, may proceed by a suit or suits at Law or in equity to foreclose the Security Interests
and sell the Pledged Securities, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction.


 


(v)         Without
limiting the foregoing, or imposing upon the Collateral Agent any obligations or duties not required by applicable Law, each Debtor
acknowledges and agrees that, in foreclosing upon any of the Pledged Securities, or exercising any other Rights or remedies provided
the Collateral Agent hereunder or under applicable Law, the Collateral Agent may, but shall not be required to, (A) qualify
or restrict prospective purchasers of the Pledged Securities by requiring evidence of sophistication or creditworthiness, and requiring
the execution and delivery of confidentiality agreements or other documents and agreements as a condition to such prospective purchasers’
receipt of information regarding the Pledged Securities or participation in any public or private foreclosure sale process, (B) provide
to prospective purchasers business and financial information regarding any or all Debtors available in the files of the Collateral
Agent at the time of commencing the foreclosure process, without the requirement that the Collateral Agent obtain, or seek to obtain,
any updated business or financial information or verify, or certify to prospective purchasers, the accuracy of any such business
or financial information, or (C) offer for sale and sell the Pledged Securities with, or without, first employing an appraiser,
investment banker, or broker with respect to the evaluation of the Pledged Securities, the solicitation of purchasers for Pledged
Securities, or the manner of sale of Pledged Securities.


 




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(d)          Compliance
with Other Laws. The Collateral Agent may comply with any applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral.


 


(e)          Application
of Proceeds. Subject to the Intercreditor Agreement, the Collateral Agent shall apply the proceeds of any sale or other disposition
of the Collateral under this Paragraph 6 first, to the payment of costs and expenses (including, without limitation,
reasonable attorneys’ fees, costs and expenses) incurred in retaking, holding, and preparing any of the Collateral for sale(s)
or other disposition, in arranging for such sale(s) or other disposition, and in actually selling or disposing of the same (all
of which are part of the Obligations), and all other expenses, liabilities and advances made or incurred by the Collateral Agent
in connection therewith, and all amounts for which the Collateral Agent is entitled to indemnification hereunder (in its capacity
as the Collateral Agent) and all advances made by the Collateral Agent hereunder for the account of the applicable Debtor, and
to the payment of all costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses)
paid or incurred by the Collateral Agent in connection with the exercise of any right or remedy hereunder or under the Indenture,
all in accordance with the terms hereof or thereof; second, toward repayment of other amounts expended by the Collateral
Agent under Paragraph 7; and third, toward payment of the balance of the Obligations in the order and manner
specified in the Indenture. Any surplus remaining shall be delivered to the relevant Debtor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligations in full, each Debtor shall remain liable for any deficiency
in accordance with the terms and provisions of the Indenture.


 


(f)          Sales
on Credit. If the Collateral Agent sells any of the Collateral upon credit, Debtors will be credited only with payments actually
made by the purchaser, received by the Collateral Agent, and applied to the indebtedness of the purchaser. In the event the purchaser
fails to pay for the Collateral, the Collateral Agent may resell the Collateral and Debtors shall be credited with the proceeds
of the sale.


 


7.          OTHER
RIGHTS OF THE COLLATERAL AGENT.


 


(a)          Performance.
If any Debtor fails to pay when due any Taxes on any of the Collateral in the manner required by the Note Documents, or fails to
preserve the required priority of the Security Interest in any of the Collateral (subject to Permitted Liens), or fails to keep
the Collateral insured as required by the Note Documents, or otherwise fails to perform any of its obligations under the Note Documents
with respect to the Collateral, then the Collateral Agent may, at its option, or, but without being required to do so, pay such
Taxes, prosecute or defend any suits in relation to the Collateral, or insure and keep insured the Collateral in any amount deemed
appropriate by the Collateral Agent, or take all other action which such Debtor is required, but has failed or refused, to take
under the Note Documents. Any sum which may be expended or paid by the Collateral Agent under this subparagraph (including court
costs and reasonable attorneys’ fees) shall bear interest from the dates of expenditure or payment at the Default Rate until
paid and, together with such interest, shall be payable by Debtors to the Collateral Agent upon demand and shall be part
of the Obligations.


 




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(b)          Collection.
If an Event of Default exists and upon notice from the Collateral Agent, and subject to the Intercreditor Agreement, each Obligor
with respect to any payments on any of the Collateral (including insurance proceeds payable by reason of loss or damage to any
of the Collateral and payments or distributions with respect to Deposit Accounts and Investment Accounts) is hereby authorized
and directed by each Debtor to make payment directly to the Collateral Agent, regardless of whether any Debtor was previously making
collections thereon. Subject to Paragraphs 7(c) and 7(g) hereof, until such notice is given, each
Debtor is authorized to retain and expend all payments made on Collateral. If an Event of Default exists and subject to the Intercreditor
Agreement, the Collateral Agent shall have the Right, but shall not be obligated, in its own name or in the name of any Debtor
to compromise or extend time of payment with respect to all or any portion of the Collateral for such amounts and upon such terms
as the Collateral Agent may determine; to notify any and all account debtors to make payments of the accounts directly to the Collateral
Agent; to demand, collect, receive, receipt for, sue for, compound, and give acquittances for any and all amounts due or to become
due with respect to Collateral; to exercise exclusive control over Deposit Accounts and Investment Accounts, or to take control
of cash and other proceeds of any Collateral; to endorse the name of the relevant Debtor on any notes, acceptances, checks, drafts,
money orders, or other evidences of payment on Collateral that may come into the possession of the Collateral Agent; to sign the
name of the relevant Debtor on any invoice or bill of lading relating to any Collateral, on any drafts against Obligors or other
Persons making payment with respect to Collateral, on assignments and verifications of accounts or other Collateral and on notices
to Obligors making payment with respect to Collateral; to send requests for verification of obligations to any Obligor; and to
do all other acts and things necessary to carry out the intent of this Security Agreement. If an Event of Default exists and any
Obligor fails or refuses to make payment on any Collateral when due, the Collateral Agent is authorized, in its sole discretion
and is not obligated, either in its own name or in the name of any Debtor, to take such action as the Collateral Agent shall deem
appropriate for the collection of any amounts owed with respect to Collateral or upon which a delinquency exists, subject to the
Intercreditor Agreement. Regardless of any other provision hereof, however, the Collateral Agent shall never be liable for its
failure to collect, or for its failure to exercise diligence in the collection of, any amounts owed with respect to Collateral,
nor shall it be under any duty whatsoever to anyone except the relevant Debtor to account for funds that it shall actually
receive hereunder. The receipt of the Collateral Agent of any amount paid to the Collateral Agent by any such Obligor shall be
a full and complete release, discharge, and acquittance to such Obligor, to the extent of any amount so paid to the Collateral
Agent. During the continuance of an Event of Default, all amounts and proceeds (including instruments) received by any Debtor in
respect of the Collateral shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds
of such Debtor and shall be forthwith paid over to the Collateral Agent (or the Priority Lien Collateral Agent in accordance with
the Intercreditor Agreement) in the same form as so received (with any necessary endorsement). The rights of the Collateral Agent
in this Paragraph 7(b) shall be in addition to those set forth in Paragraph 7(c), and the provisions
of this Paragraph 7(b) shall not in any way be construed to limit the Collateral Agent’s rights under Paragraph
7(c).


 


(c)          Intellectual
Property. For purposes of enabling the Collateral Agent to exercise its rights and remedies under this Security Agreement and
enabling the Collateral Agent and its successors and assigns to enjoy the full benefits of the Collateral, in each case at such
time as such Persons shall be lawfully entitled to exercise such rights and remedies, each Debtor hereby grants to the Collateral
Agent, for the benefit of the Secured Parties, an irrevocable, nonexclusive license or other right (exercisable without payment
of royalty or other compensation to such Debtor), subject, in the case of Trademarks, to sufficient rights to quality control and
inspection in favor of such Debtor to avoid the risk of invalidation of such Trademarks, to use any of such Debtor’s Intellectual
Property, or any property of a similar nature, as it pertains to the Collateral, in advertising for sale and selling any Collateral
and such Debtor’s rights under all licenses and all franchise agreements shall inure to the Collateral Agent’s benefit,
which license or right may only be exercised after the occurrence of and during the continuation of an Event of Default. Each Debtor
shall provide the Collateral Agent with reasonable access to all media in which any of the Intellectual Property may be recorded
or stored and all computer programs used for the compilation or printout thereof. This license or other right shall also inure
to the benefit of all successors, assigns, and transferees of the Collateral Agent. With respect to Intellectual Property that
is not owned by the Debtors, the license and other rights contained in this Paragraph 7(c) shall be subject to the
terms of any licenses or other agreements that create and govern any Debtor’s right in such Intellectual Property.


 




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(d)          Record
Ownership of Securities. If an Event of Default exists and subject to the Intercreditor Agreement, the Collateral Agent at
any time may, but shall not be required to, have any Collateral that is Pledged Securities and that is in the possession of the
Collateral Agent, or its nominee or nominees, registered in its name, or in the name of its nominee or nominees, as the Collateral
Agent; and, as to any Collateral that is Pledged Securities so registered, if no Event of Default then exists, the Collateral Agent
shall execute and deliver (or cause to be executed and delivered) upon the relevant Debtor’s written request and at such
Debtor’s sole cost and expense, to such Debtor all such proxies, powers of attorney, dividend coupons or orders, and other
documents as such Debtor may reasonably request for the purpose of enabling such Debtor to exercise the voting Rights and powers
which it is entitled to exercise under this Security Agreement or to receive the dividends and other distributions and payments
in respect of such Collateral that is Pledged Securities or proceeds thereof which it is authorized to receive and retain under
this Security Agreement and the Intercreditor Agreement.


 


(e)          Voting
of Securities. As long as no Event of Default exists and subject to the Intercreditor Agreement, each Debtor is entitled to
exercise all voting Rights pertaining to its Pledged Securities and Partnership Interests; provided, however, that no vote
shall be cast or consent, waiver, or ratification given or action taken without the prior written consent of the Lead Holder and
the Collateral Agent which would be inconsistent with or violate any provision of this Security Agreement or any other Note Document;
and provided further that such Debtor shall give the Lead Holder and the Collateral Agent at least five Business Days’
prior written notice in the form of an officers’ certificate of the manner in which it intends to exercise, or the reasons
for refraining from exercising, any voting or other consensual Rights pertaining to the Collateral or any part thereof which might
have a material adverse effect on the value of the Collateral or any part thereof. If an Event of Default exists and if the Collateral
Agent elects to exercise such Right (at the written direction of the Lead Holder), the Right to vote any Pledged Securities shall
be vested exclusively in the Collateral Agent, subject to the Intercreditor Agreement. To this end, each Debtor hereby irrevocably
constitutes and appoints the Collateral Agent the proxy and attorney-in-fact of such Debtor, with full power of substitution, to
vote, and to act with respect to, any and all Collateral that is Pledged Securities standing in the name of such Debtor or with
respect to which such Debtor is entitled to vote and act, subject to the understanding that such proxy may not be exercised unless
an Event of Default exists. The proxy herein granted is coupled with an interest, is irrevocable, and shall continue until the
Obligations have been paid and performed in full.


 


(f)          Certain
Proceeds.


 


(i) Any and all dividends,
interest, or other distributions paid or payable in cash or other than in cash in respect of, and instruments and other property
received, receivable, or otherwise distributed in respect of, or in exchange for, any Collateral shall be part of the Collateral
hereunder, and from and after the occurrence and during the continuance of an Event of Default, (A) shall, if received by any Debtor,
be held in trust for the benefit of the Collateral Agent, and (B) if requested by the Lead Holder or the Collateral Agent and subject
to the Intercreditor Agreement, shall forthwith be delivered to the Collateral Agent (accompanied by proper instruments of assignment
executed by such Debtor in accordance with the Collateral Agent’s instructions) to be held subject to the terms of this Security
Agreement. Any cash proceeds of Collateral which come into the possession of the Collateral Agent upon the occurrence and during
the continuance of an Event of Default (including insurance proceeds) may, at the Collateral Agent’s option, exercisable
in its sole discretion or upon the written direction of the Majority Holders, be applied in whole or in part to the Obligations
(to the extent then due), be released in whole or in part to or on the written instructions of the relevant Debtor for any general
or specific purpose, or be retained in whole or in part by the Collateral Agent as additional Collateral.


 




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(ii) Whether or not a Default
or Event of Default exists (A) any cash Collateral in the Cash Collateral Account or received by the Collateral Agent from the
sale, collection or other realization upon any Collateral (but not other cash Collateral) in the possession of the Collateral Agent
may be invested by the Collateral Agent in deposit accounts and certificates of deposit issued by the Collateral Agent (if the
Collateral Agent issues such certificates) or by any state or national bank having combined capital and surplus greater than $100,000,000
with a rating from Moody’s and S&P of P-1 and A-1+, respectively, or in securities issued or guaranteed
by the United States of America or any agency thereof and the Collateral Agent shall never be obligated to make any such investment
and shall never have any liability to any Debtor for any loss which may result therefrom and (B) all interest and other amounts
earned from any investment of Collateral may be dealt with by the Collateral Agent in the same manner as other cash Collateral.


 


(g)          Use
and Operation of Collateral. Should any Collateral come into the possession of the Collateral Agent, the Collateral Agent may,
but shall not be obligated to, use such Collateral for the purpose of preserving it or its value pursuant to the order of a court
of appropriate jurisdiction or in accordance with any other rights held by the Collateral Agent in respect of such Collateral.
Each Debtor covenants to promptly reimburse and pay to the Collateral Agent, at the Collateral Agent’s request, the amount
of all reasonable expenses (including attorneys’ fees and expenses), costs, and other charges (including the cost of any
insurance and payment of Taxes or other charges) incurred by the Collateral Agent in connection with its custody and preservation
of Collateral, and all such expenses, costs, Taxes, and other charges shall bear interest at the Default Rate until repaid and,
together with such interest, shall be payable by such Debtor to the Collateral Agent upon demand and shall become part of
the Obligations. However, the risk of accidental loss or damage to, or diminution in value of, Collateral is on Debtors, and the
Collateral Agent shall have no liability whatever for failure to obtain or maintain insurance, nor to determine whether any insurance
ever in force is adequate as to amount or as to the risks insured. With respect to Collateral that is in the possession of the
Collateral Agent, the Collateral Agent shall have no duty to fix or preserve rights against prior parties to such Collateral and
shall never be liable for any failure to use diligence to collect any amount payable in respect of such Collateral, but shall be
liable only to account to the relevant Debtors for what it may actually collect or receive thereon. The provisions of this subparagraph
are applicable whether or not a Default or Event of Default exists.


 


(h)          Event
of Default. If an Event of Default exists, the Collateral Agent shall have, and each Debtor hereby grants to the Collateral
Agent, for the benefit of the Secured Parties, the Right and authority, subject to the Intercreditor Agreement, to transfer, all
funds on deposit in the Deposit Accounts to one or more “Cash Collateral Accounts” (herein so called)
maintained with a depository institution acceptable to the Collateral Agent and subject to the exclusive direction, domain, and
control of the Collateral Agent, and no disbursements or withdrawals shall be permitted to be made by any Debtor from such Cash
Collateral Accounts. Such Cash Collateral Accounts shall be subject to the Security Interest and Liens in favor of the Collateral
Agent herein created, and each Debtor hereby grants a security interest to the Collateral Agent, for the benefit of the Secured
Parties, in and to, such Cash Collateral Accounts and all checks, drafts, and other items ever received by such Debtor for deposit
therein. Furthermore, if an Event of Default exists, the Collateral Agent shall have the right, but shall not be obligated, at
any time in its discretion without notice to any Debtor and subject to the Intercreditor Agreement, (i) to transfer to or to register
in the name of the Collateral Agent or any Lender or nominee any certificates of deposit or deposit instruments constituting Deposit
Accounts and shall have the right to exchange such certificates or instruments representing Deposit Accounts for certificates or
instruments of smaller or larger denominations and (ii) to take and apply against the Obligations any and all funds then or thereafter
on deposit in the Cash Collateral Accounts or otherwise constituting Deposit Accounts.


 




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(i)          Power
of Attorney. Each Debtor hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the name
of such Debtor or in its own name, to take after the occurrence and during the continuance of an Event of Default, any and all
action and to execute any and all documents and instruments which the Collateral Agent at any time and from time to time deems
necessary or desirable to accomplish the purposes of this Security Agreement and, without limiting the generality of the foregoing,
each Debtor hereby gives the Collateral Agent the power and right on behalf of such Debtor and in its own name to do any of the
following from time to time after the occurrence and during the continuance of an Event of Default, subject to the Intercreditor
Agreement, without notice to or the consent of such Debtor: (i) to transfer any and all funds on deposit with the Collateral Agent
in one or more deposit accounts, and any certificates of deposit or deposit instruments constituting deposit accounts, to the Cash
Collateral Account as set forth in herein; (ii) to receive, endorse, and collect any drafts or other instruments or documents in
connection with clause (b) above and this clause (i); (iii) to use such Debtor’s Intellectual
Property as provided in Paragraph 7(c); (iv) to demand, sue for, collect, or receive, in the name of such Debtor
or in its own name, any money or property at any time payable or receivable on account of or in exchange for any of the Collateral
and, in connection therewith, endorse checks, notes, drafts, acceptances, money orders, documents of title or any other instruments
for the payment of money under the Collateral or any policy of insurance; (v) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral; (vi) to notify post office authorities to change the address for delivery
of such Debtor to an address designated by the Collateral Agent and to receive, open, and dispose of mail addressed to such Debtor;
and (vii) (A) to direct account debtors and any other parties liable for any payment under any of the Collateral to make payment
of any and all monies due and to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct;
(B) to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time
in respect of or arising out of any Collateral; (C) to sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments, proxies, stock powers, verifications, and notices in connection
with accounts and other documents relating to the Collateral; (D) to commence and prosecute any suit, action, or proceeding
at Law or in equity in any court of competent jurisdiction to collect the Collateral or any part thereof and to enforce any other
Right in respect of any Collateral; (E) to defend any suit, action, or proceeding brought against such Debtor with respect
to any Collateral; (F) to settle, compromise, or adjust any suit, action, or proceeding described above and, in connection
therewith, to give such discharges or releases as the Collateral Agent may deem appropriate; (G) to exchange any of the Collateral
for other property upon any merger, consolidation, reorganization, recapitalization, or other readjustment of the issuer thereof
and, in connection therewith, deposit any of the Collateral with any committee, depositary, transfer agent, registrar, or other
designated agency upon such terms as the Collateral Agent may determine; (H) to add or release any guarantor, indorser, surety,
or other party to any of the Collateral; (I) to renew, extend, or otherwise change the terms and conditions of any of the
Collateral; (J) to endorse such Debtor’s name on all applications, documents, papers, and instruments necessary or desirable
in order for the Collateral Agent to use any of the Intellectual Property; (K) to make, settle, compromise or adjust any claims
under or pertaining to any of the Collateral (including claims under any policy of insurance); (L) to execute on behalf of such
Debtor any financing statements or continuation statements with respect to the Security Interests created hereby, and to do any
and all acts and things to protect and preserve the Collateral, including the protection and prosecution of all rights included
in the Collateral; and (M) to sell, transfer, pledge, convey, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and
to do, at the Collateral Agent’s option and such Debtor’s expense, at any time, or from time to time, all acts and
things which the Collateral Agent deems necessary to protect, preserve, maintain, or realize upon the Collateral and the Collateral
Agent’s security interest therein.


 




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This power of attorney is a power coupled with
an interest and shall be irrevocable. The Collateral Agent shall be under no duty to exercise or withhold the exercise of any of
the rights, powers, privileges, and options expressly or implicitly granted to the Collateral Agent in this Security Agreement,
and shall not be liable for any failure to do so or any delay in doing so. Neither the Collateral Agent nor any Person designated
by the Collateral Agent shall be liable for any act or omission or for any error of judgment or any mistake of fact or Law in connection
with its exercise of this power of attorney, in each case except as are determined by final and nonappealable judgment of a court
of competent jurisdiction to constitute or result from gross negligence, willful misconduct or breach in bad faith of any of its
obligations under a Note Document. This power of attorney is conferred on the Collateral Agent solely to protect, preserve, maintain,
and realize upon its Security Interest in the Collateral. The Collateral Agent shall not be responsible for any decline in the
value of the Collateral and shall not be required to take any steps to preserve rights against prior parties or to protect, preserve,
or maintain any Lien given to secure the Collateral. The Collateral Agent and the other Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such powers, and shall not be responsible to any Debtor for
any act or failure to act hereunder, except for their own gross negligence or willful misconduct.


 


(j)          Purchase
Money Collateral. To the extent that any Secured Party has advanced or will advance funds to or for the account of any Debtor
to enable such Debtor to purchase or otherwise acquire Rights in Collateral, such Secured Party, at its option, may pay such funds
(i) directly to the Person from whom such Debtor will make such purchase or acquire such Rights, or (ii) to such Debtor, in which
case such Debtor covenants to promptly pay the same to such Person, and forthwith furnish to the Collateral Agent evidence satisfactory
to the Lead Holder and the Collateral Agent that such payment has been made from the funds so provided.


 


(k)          Subrogation.
If any of the Obligations is given in renewal or extension or applied toward the payment of indebtedness secured by any Lien, the
Collateral Agent shall be, and is hereby, subrogated to all of the Rights, titles, interests, and Liens securing the indebtedness
so renewed, extended, or paid.


 


(l)          Indemnification.
Each Debtor hereby assumes all liability for the Collateral, for the Security Interest, and for any use, possession, maintenance,
and management of, all or any of the Collateral, including any Taxes arising as a result of, or in connection with, the transactions
contemplated herein, and agrees to assume liability for, and to indemnify and hold the Lead Holder, the Collateral Agent and each
other Secured Party harmless from and against, any and all claims, causes of action, or liability, for injuries to or deaths of
Persons and damage to property, howsoever arising from or incident to such use, possession, maintenance, and management, whether
such Persons be agents or employees of such Debtor or of third parties, or such damage be to property of such Debtor or of others.
Each Debtor agrees to indemnify, save, and hold the Lead Holder, the Collateral Agent and each other Secured Party (each, an “indemnified
person”), harmless from and against, and covenants to defend each indemnified person against, any and all losses,
damages, claims, costs, penalties, liabilities, and expenses (collectively, “Claims”), including court
costs and attorneys’ fees, and any of the foregoing arising from the negligence of an indemnified person, or any of their
respective officers, employees, agents, advisors, employees, or representatives, howsoever arising or incurred because of,
incident to, or with respect to Collateral or any use, possession, maintenance, or management thereof or the execution, delivery,
enforcement, performance, administration of or otherwise arising out of or incurred in connection with this Security Agreement,
any other related document or any transaction contemplated hereby or thereby (and regardless of whether or not any such transactions
are consummated); provided, however, that such Debtor shall not be required to indemnify an indemnified person for Claims
caused by the gross negligence or willful misconduct of such indemnified person or the breach in bad faith by such indemnified
person of its obligations hereunder or under any other Note Document, in each case as determined by a court of competent jurisdiction
by final and nonappealable judgment. This Paragraph 7(l) will not apply with respect to Taxes other than any Taxes
that represent losses, claims, damages, etc. arising from any non-Tax claim. The rights of indemnified person and obligations of
the Debtors under or pursuant to this Security Agreement shall survive the termination of this Security Agreement, and the
earlier removal or resignation of the Collateral Agent hereunder.


 




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(m)          Limitations
on Liability. The Collateral Agent shall have no liability for losses arising from (i) any cause beyond its control, (ii) any
delay, error, omission or default of any mail, electronic mail or other electronic communication or operator, or (iii) the
acts or edicts of any government or governmental agency or other group or entity exercising governmental powers. The Collateral
Agent shall not be responsible for any special, exemplary, punitive or consequential damages. The Collateral Agent shall not be
responsible for the preparation or filing of any UCC financing statements or the correctness of any financing statements filed
in connection with this Security Agreement or the validity or perfection of any lien or security interest created pursuant to this
Security Agreement. The Collateral Agent shall not be liable for interest on any money received by it except as the Collateral
Agent may agree in writing with the Debtors.


 


(n)          Standard
of Care. The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral
in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining
to any Collateral. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of Collateral
in its possession if such Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own
property. Neither the Collateral Agent nor any of its directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part 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 Debtor or otherwise.


 


(o)          Appointment.
The Collateral Agent has been appointed pursuant to the Indenture to act as Collateral Agent hereunder. The Collateral Agent shall
be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including, without limitation, the release or substitution of Collateral),
solely in accordance with this Security Agreement and the Indenture. In furtherance of the foregoing provisions of this Paragraph
7, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to
realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies
hereunder may be exercised solely by the Collateral Agent for the benefit of the Secured Parties in accordance with the terms of
this Paragraph 7. The provisions of the Indenture relating to the Collateral Agent including, without limitation,
the provisions relating to resignation or removal of the Collateral Agent, reimbursement of expenses and the powers and duties
and immunities of the Collateral Agent are incorporated herein by this reference and shall survive any termination of the Indenture.


 


(p)          Delegation
of Duties. The Collateral Agent may perform any and all of its duties and exercise its rights and powers under this Security
Agreement by or through any one or more sub-agents appointed by the Collateral Agent. The Collateral Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or through their respective Affiliates. The exculpatory,
indemnification and other provisions of this Paragraph 7 and similar provisions in the Indenture shall apply to any
the Affiliates of the Collateral Agent and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as the Collateral Agent. All of the rights, benefits, and privileges
(including the exculpatory and indemnification provisions) of this Paragraph 7 and of the Indenture shall apply to
any such sub-agent and to the Affiliates of any such sub-agent, and shall apply to their respective activities as sub-agent as
if such sub-agent and Affiliates were named herein. Notwithstanding anything herein to the contrary, with respect to each sub-agent
appointed by the Collateral Agent, (a) such sub-agent shall be a third party beneficiary under this Security Agreement with respect
to all such rights, benefits and privileges (including exculpatory rights and rights to indemnification) and shall have all of
the rights and benefits of a third party beneficiary, including an independent right of action to enforce such rights, benefits
and privileges (including exculpatory rights and rights to indemnification) directly, without the consent or joinder of any other
Person, against any or all of the Debtors and the Secured Parties, (a) such rights, benefits and privileges (including exculpatory
rights and rights to indemnification) shall not be modified or amended without the consent of such sub-agent, and (iii) such sub-agent
shall only have obligations to the Collateral Agent and not to any Debtor, Secured Party or any other Person and no Debtor, Secured
Party or any other Person shall have any rights, directly or indirectly, as a third party beneficiary or otherwise, against such
sub-agent.


 




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8.          ADDITIONAL
DEBTORS. From time to time subsequent to the time hereof, additional Subsidiaries of the Parent Debtor may become Guarantors
pursuant to the Indenture (each an “Additional Debtor”). Substantially contemporaneous therewith, such
Additional Debtors shall join this Security Agreement by executing a Security Agreement Supplement in the form of Attachment A
attached hereto (or such other form as may be satisfactory to the Lead Holder and the Collateral Agent). Upon delivery of any such
supplement to the Lead Holder and the Collateral Agent, notice of which is hereby waived by Debtors, each such Additional Debtor
shall be a Debtor hereunder and shall be a party hereto as if such Additional Debtor were an original signatory hereof. Each Debtor
expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other
Debtor hereunder, or by any election any Secured Party not to cause any Subsidiary of the Parent Debtor to become an Additional
Debtor hereunder. This Security Agreement shall be fully effective as to any Debtor that is or becomes a party hereto regardless
of whether any such Person becomes or fails to become or ceases to be a Debtor hereunder.


 


9.          CONSENT
TO TRANSFER. Each Debtor, In its capacity as an issuer of any Partnership Interest and in its capacity as a partner or member
of another Debtor, hereby consents to the grant by such Debtor and each other Debtor of a security interest in favor of the Collateral
Agent, for the benefit of the Secured Parties, in the Collateral described in Section 3(c) and (e) (including, without limitation,
the Pledged Partnership Interests, Pledged LLC Interests and Pledged Shares constituting Collateral) and without limiting the foregoing,
consents (including, without limitation, for purposes of Section 18-704(a)) of the Delaware Limited Liability Company Act, as amended
from time to time) to the assignment, sale, disposition or other transfer (a “Transfer”) of any such
Collateral to the Collateral Agent, its nominee or other transferee in connection with the exercise of remedies following an Event
of Default (“Transferees”) and (including, without limitation, for purpose of Section 18-702 of the Delaware
Limited Liability Company Act, as amended from time to time) to the substitution of  any such Transferees as a partner in
any partnership or as a member in any limited liability company with all the rights and powers related thereto (including, without
limitation, the right to participate in the management of the business and affairs of the business).  Notwithstanding any
provision of any Debtor’s Partnership Agreements or limited liability company agreements or operating agreements to the contrary,
each Debtor further agrees that any Transferee of such Collateral in connection with a Transfer shall automatically be admitted
as a member or a partner, as applicable, under the Partnership Agreements or limited liability company agreements or operating
agreements, as applicable, without consent, amendment or other action of any Debtor or any other member or partner of any such
Debtor.


 




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10.         MISCELLANEOUS.


 


(a)          Continuing
Security Interest. This Security Agreement creates a continuing security interest in the Collateral and shall (i) remain in
full force and effect until satisfaction of the conditions for release of Liens set forth in the Indenture; (ii) inure to the benefit
of and be enforceable by the Collateral Agent, the Holders, and each of their respective successors, transferees, and assigns;
and (iii) be binding on each Debtor and such Debtor’s successors and assigns. No Debtor may, except as expressly permitted
under the Indenture, assign any rights, duties, or obligations hereunder. Without limiting the generality of the foregoing clause
(ii), the Collateral Agent and the Holders may assign or otherwise transfer any of their respective rights under this Security
Agreement to any other Person in accordance with the terms and provisions of the Note Documents, and to the extent of such assignment
or transfer such Person shall thereupon become vested with all the rights and benefits in respect thereof granted herein or otherwise
to each Secured Party, as the case may be. Upon satisfaction of the conditions set forth in clause (i) of this Paragraph
10(a), the Collateral Agent shall execute and deliver or cause to be executed and delivered release(s) in accordance with
the provisions of the Indenture governing release of liens. If any of the Collateral shall be disposed of by any Debtor in a transaction
permitted by the Indenture, then the Collateral Agent, at the written request and sole expense of such Debtor, shall execute and
deliver to such Debtor (or its designee) releases or other documents reasonably necessary or desirable to release or reflect of
public record the release of the Liens created hereby on such Collateral; provided that, such Debtor or the Company
shall have delivered to the Lead Holder and the Collateral Agent a written request for release certifying that such transaction
is in compliance with the Indenture and the other Note Documents. No Obligor, if any, on any of the Collateral shall ever be obligated
to make inquiry as to the termination of this Security Agreement, but shall be fully protected in making payment directly to the
Collateral Agent until actual notice of discharge of the Liens hereby created.


 


(b)          Actions
Not Releases. The Security Interest and each Debtor’s obligations and each Secured Party’s rights hereunder shall
not be released, diminished, impaired, or adversely affected by the occurrence of any one or more of the following events: (i)
the taking or accepting of any other security or assurance for any or all of the Obligations; (ii) any release, surrender, exchange,
subordination, or loss of any security or assurance at any time existing in connection with any or all of the Obligations; (iii)
the modification of, amendment to, or waiver of compliance with any terms of any of the other Note Documents without the notification
or consent of such Debtor, except as required therein (the Right to such notification or consent being herein specifically
waived by each Debtor); (iv) the insolvency, bankruptcy, or lack of corporate or trust power of any party at any time liable for
the payment of any or all of the Obligations, whether now existing or hereafter occurring; (v) any renewal, extension, or rearrangement
of the payment of any or all of the Obligations, either with or without notice to or consent of any Debtor, or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by the Collateral Agent or any Holder to any Debtor; (vi) any
neglect, delay, omission, failure, or refusal of the Collateral Agent or any Holder to take or prosecute any action in connection
with any other agreement, document, guaranty, or instrument evidencing, securing, or assuring the payment of all or any of the
Obligations; (vii) any failure of the Collateral Agent or any Holder to notify any Debtor of any renewal, extension, or assignment
of the Obligations or any part thereof, or the release of any Collateral or other security, or of any other action taken or refrained
from being taken by the Collateral Agent or any Holder against any Debtor or any new agreement between or among the Collateral
Agent or one or more Holders and any Debtor, it being understood that except as expressly provided herein, neither the Collateral
Agent nor any Holder shall be required to give any Debtor any notice of any kind under any circumstances whatsoever with respect
to or in connection with the Obligations, including notice of acceptance of this Security Agreement or any Collateral ever delivered
to or for the account of the Collateral Agent hereunder; (viii) the illegality, invalidity, or unenforceability of all or any part
of the Obligations against any party obligated with respect thereto by reason of the fact that the Obligations, or the interest
paid or payable with respect thereto, exceeds the amount permitted by Law, the act of creating the Obligations, or any part thereof,
is ultra vires, or the officers, partners, or trustees creating same acted in excess of their authority, or for any other
reason; or (ix) if any payment by any party obligated with respect thereto is held to constitute a preference under applicable
Laws or for any other reason the Collateral Agent or any Holder is required to refund such payment or pay the amount thereof to
someone else.


 




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(c)          Waivers;
Remedies Cumulative. Except to the extent expressly otherwise provided herein or in other Note Documents and to the fullest
extent permitted by applicable Law, each Debtor waives (i) any right to require the Collateral Agent or any Holder to proceed against
any other Person, to exhaust its rights in Collateral, or to pursue any other right which the Collateral Agent or any Holder may
have; (ii) with respect to the Obligations, presentment and demand for payment, protest, notice of protest and nonpayment, and
notice of the intention to accelerate and notice of acceleration; and (iii) all rights of marshaling in respect of any and all
of the Collateral. No failure or delay on the part of the Collateral Agent in the exercise of any power, right or privilege hereunder
or under any other agreements related to the Security Interest or Collateral shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right
or privilege preclude other or further exercise thereof or of any other power, right or privilege. Each right, power, and remedy
of the Collateral Agent and the other Secured Parties, or any of them, as provided for in this Security Agreement or in any other
agreements related to the Security Interest or Collateral or now or hereafter existing at law or in equity or by statute or otherwise
shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Security
Agreement or in any other agreements related to the Security Interest or Collateral or now or hereafter existing at law or in equity
or by statute or otherwise, and the exercise or beginning of the exercise by the Collateral Agent or any other Secured Party of
any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by such Persons of any
or all such other rights, powers, or remedies.


 


(d)          Financing
Statement; Authorization. The Collateral Agent shall be entitled at any time to file this Security Agreement or a carbon, photographic,
or other reproduction of this Security Agreement, as a financing statement, but the failure of the Collateral Agent to do so shall
not impair the validity or enforceability of this Security Agreement. Each Debtor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any UCC jurisdiction any initial financing statements and amendments thereto
(without the requirement for such Debtor’s signature thereon) containing any information required by Article 9 of the UCC
of the state or such jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including
whether the Debtor is an organization, the type of organization, and any organization identification number issued to such Debtor.
Each Debtor agrees to furnish any such information to the Lead Holder or the Collateral Agent promptly upon request.


 


(e)          Amendments.
Except as otherwise set forth in the Indenture, this Security Agreement may be amended only by an instrument in writing executed
jointly by each Debtor to be bound thereby and the Collateral Agent (at the written direction of the Majority Holders), and supplemented
only by documents delivered or to be delivered in accordance with the express terms hereof; provided, however, that, notwithstanding
the foregoing, (a) any amendment, restatement, supplement or other modification of this Security Agreement that has the effect
solely of adding or maintaining Collateral, securing additional indebtedness or preserving, perfecting or establishing the Liens
thereon or the rights of the Collateral Agent therein will become effective when executed and delivered by the applicable Debtors
party thereto and the Collateral Agent, and (b) no amendment, restatement, supplement or other modification of this Security Agreement
that imposes any obligation upon the Collateral Agent or adversely affects the rights of the Collateral Agent, in each case, solely
in its capacity as such, will become effective without the consent of the Collateral Agent. Any waiver by the Collateral Agent
shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the Collateral Agent
or the obligations of the Debtors to the Collateral Agent in any other respect or at any other time. Notwithstanding the foregoing,
the Collateral Agent and each applicable Debtor may, without the consent of any other Secured Party, enter into any amendment,
restatement, supplement or other modification of this Security Agreement to cure any ambiguity, defect or inconsistency or to correct
or supplement any provision in such document that may be inconsistent with any other provision of any other document related to
the Security Interests or Collateral, or to further the intended purposes thereof or to provide additional benefits or rights to
the Secured Parties, so long as prior to the execution of any such amendment, restatement, supplement or other modification, each
applicable Debtor shall have delivered to the Collateral Agent an officers’ certificate in form and substance reasonably
satisfactory to the Collateral Agent to the effect that such amendment, modification or waiver complies with the foregoing requirements.


 




    	25



    	 



    

 


(f)          Multiple
Counterparts. This Security Agreement may be executed in one or more separate counterparts, each of which, when so executed,
shall be deemed an original for all purposes and all of which constitute, collectively, one agreement; but, in making proof of
this Security Agreement, it shall not be necessary to produce or account for more than one such counterpart. Delivery of an executed
signature page by facsimile or other electronic transmission (e.g. “pdf” or “tif” format) shall be effective
as delivery of a manually executed counterpart hereof.


 


(g)          Collateral
Agent. The Collateral Agent may, without the joinder of any Holder, exercise any and all rights in favor of the Secured Parties
hereunder, including conducting any foreclosure sales hereunder, and executing full or partial releases hereof, amendments or modifications
hereto, or consents or waivers hereunder.


 


(h)          Note
Documents. This Security Agreement is a Note Document.


 


(i)          GOVERNING
LAW.         THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION
AND THE EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).


 


(j)          Notices.
All notices, requests and other communications provided for hereunder shall be in writing and given in the manner provided in Section
11.02 of the Indenture, to the Lead Holder and the Collateral Agent at its address set forth in, or to any Debtor at its address
set forth in, Section 11.02 of the Indenture, or at such other address as shall be designated by the Collateral Agent or a Debtor,
as applicable, by written notice to the other parties hereto.


 


(k)          Fraudulent
Conveyance. Notwithstanding anything contained herein to the contrary, it is the intention of each Subsidiary Debtor and each
Secured Party that the amount of the Obligations secured hereunder by any Subsidiary Debtor’s interests in any of its respective
Collateral shall be in, but not in excess of, the maximum amount permitted by fraudulent conveyance, fraudulent transfer and other
similar law, rule or regulation of any Governmental Authority applicable to such Subsidiary Debtor. Accordingly, notwithstanding
anything to the contrary contained in this Security Agreement or in any other agreement or instrument executed in connection with
the payment of any of the Obligations, the amount of the Obligations secured by such Subsidiary Debtor’s interests in any
of its Collateral pursuant to this Security Agreement shall be limited to an aggregate amount equal to the largest amount that
would not render such Subsidiary Debtor’s obligations hereunder or the Liens and security interest granted to the Secured
Parties hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provision of any
other applicable law.


 


(l)          GOVERNING
LAW; Waiver of Jury Trial. This Security Agreement and any claim, controversy or dispute arising under or related to this Security
Agreement shall be governed by and construed in accordance with the laws of the State of New York, EXCEPT TO THE EXTENT
THAT THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION, AND PRIORITY OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Each Debtor and the Collateral Agent hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating to this Security Agreement or the transactions contemplated
hereby. 


 




    	26



    	 



    

 


(m)          Severability.
If any provision of this Security Agreement or any Security Agreement Supplement hereto is held to be illegal, invalid or unenforceable,
(a) the legality, validity and enforceability of the remaining provisions of this Security Agreement or such Security Agreement
Supplement, as applicable, shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations
to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as
possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction
shall not invalidate or render unenforceable such provision in any other jurisdiction.


 


11.         INTERCREDITOR
AGREEMENT.


 


(a)          The
Collateral Agent, by accepting the benefits of the security provided hereby, (i) consents (or is deemed to consent), to the subordination
of Liens provided for in the Intercreditor Agreement and (ii) agrees (or is deemed to agree) that it will be bound by, and will
take no actions contrary to, the provisions of the Intercreditor Agreement.


 


(b)          Notwithstanding
any other provision contained herein, this Security Agreement, the Liens created hereby and the rights, remedies, duties and obligations
provided for herein are subject in all respects to the provisions of the Intercreditor Agreement.  In the event of any conflict
or inconsistency between the provisions of this Security Agreement and the Intercreditor Agreement, the provisions of the Intercreditor
Agreement shall control.


 


(c)          Without
limiting the foregoing, at any time prior to the release of Liens related to the RBL Credit Agreement, any provision hereof requiring
any Debtor to deliver possession of any Collateral to the Collateral Agent, or to cause the Collateral Agent to control any Collateral,
shall be deemed to have been complied with, if and for so long as (i) the Intercreditor Agreement is in full force and effect and
(ii) the Priority Lien Collateral Agent shall have such possession or control for the benefit of the Collateral Agent and as bailee
or sub-agent of the Collateral Agent as provided in the Intercreditor Agreement; provided, however, notwithstanding anything
to the contrary set forth in the foregoing, the Issuers and Guarantors shall be required to deliver duly executed Deposit Account
Control Agreements and Investment Account Control Agreements with respect to Deposit Accounts and Investment Accounts as required
hereunder.


 


12.         ENTIRE
AGREEMENT. THIS SECURITY AGREEMENT AND THE OTHER NOTE DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.


 


Remainder of Page Intentionally Blank.


Signature Pages to Follow.


 




    	27



    	 



    

 


IN WITNESS WHEREOF, the parties hereto have
caused this Security Agreement to be executed as of the day first above written.


 


	 	DEBTORS:
	 	 	 
	 	BREITBURN ENERGY PARTNERS LP
	 	 	 
	 	By:	Breitburn GP LLC,
	 	 	its general partner


 


	 	/S/ James G. Jackson
	 	   Name:	James G. Jackson
	 	   Title:	Executive Vice President and
	 	 	Chief Financial Officer


 


	 	BREITBURN OPERATING LP
	 	 	 
	 	By:	Breitburn Operating GP LLC,
	 	 	its general partner


 


	 	/S/ James G. Jackson
	 	   Name:	James G. Jackson
	 	   Title:	Executive Vice President and
	 	 	Chief Financial Officer


 


	 	BREITBURN FINANCE CORPORATION 
	 	 	 
	 	/S/ James G. Jackson
	 	   Name:	James G. Jackson
	 	   Title:	Chief Financial Officer


 


Signature Page to Security Agreement


 




    	 



    	 



    

 


	 	ALAMITOS COMPANY
	 	BEAVER CREEK PIPELINE, L.L.C.
	 	GTG PIPELINE LLC
	 	MERCURY MICHIGAN COMPANY, LLC
	 	PHOENIX PRODUCTION COMPANY
	 	QRE GP, LLC
	 	TERRA ENERGY COMPANY LLC
	 	TERRA PIPELINE COMPANY LLC


 


	 	By:	/S/ James G. Jackson
	 	 	   Name:	James G. Jackson
	 	 	   Title: 	Chief Financial Officer


 


	 	BREITBURN OPERATING GP LLC
	 	BREITBURN GP LLC
	 	BREITBURN MANAGEMENT COMPANY LLC


 


	 	By:	/S/ James G. Jackson
	 	 	   Name:	James G. Jackson
	 	 	   Title:	Executive Vice President and
	 	 	 	Chief Financial Officer


 


	 	BREITBURN FLORIDA LLC
	 	BREITBURN OKLAHOMA LLC
	 	BREITBURN SAWTELLE
	 	BREITBURN TRANSPETCO GP LLC
	 	BREITBURN TRANSPETCO LP LLC


 


	 	By:	Breitburn Operating LP,
	 	 	its sole member
	 	 	 
	 	By:	Breitburn Operating GP LLC,
	 	 	its general partner


 


	 	By:	/S/ James G. Jackson
	 	 	   Name:	James G. Jackson
	 	 	   Title:	Executive Vice President and Chief Financial Officer


 


Signature Page to Security Agreement


 




    	 



    	 



    

 


	 	QR ENERGY, LP
	 	By:	QRE GP, LLC, 
	 	 	its general partner


 


	 	By:	/S/ James G. Jackson
	 	 	Name:	James G. Jackson
	 	 	Title:	Chief Financial Officer


 


	 	QRE OPERATING, LLC
	 	By:	QR Energy, LP,
	 	 	its sole member


 


	 	By:	QRE GP, LLC,
	 	 	its general partner


 


	 	By:	/S/ James G. Jackson
	 	 	Name:	James G. Jackson
	 	 	Title:	Chief Financial Officer


 


	 	TRANSPETCO PIPELINE COMPANY, L.P.
	 	 	 
	 	By:	Breitburn Operating LP,
	 	 	on behalf of itself and as the sole member of
	 	 	Breitburn Transpetco GP LLC, each a
	 	 	general partner
	 	 	 
	 	By:	Breitburn Operating GP LLC,
	 	 	its general partner


 


	 	By:	/S/ James G. Jackson
	 	 	Name:	James G. Jackson
	 	 	Title:	Executive Vice President and
	 	 	 	Chief Executive Officer


 


Signature Page to Security Agreement


 




    	 



    	 



    

 


	 	COLLATERAL AGENT:
	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, 
	 	as Collateral Agent


 


	 	By:	/S/ Leland Hansen
	 	Name: 	Leland Hansen
	 	Title:	Vice President


 


Signature Page to Security Agreement


 




    	 



    	 



    

 


ATTACHMENT A


 


TO SECURITY AGREEMENT


 


SECURITY AGREEMENT SUPPLEMENT


 


This SECURITY AGREEMENT
SUPPLEMENT, dated [_______________], is delivered by [Name of Debtor] a [Name of State of Incorporation] [Corporation] (the “Debtor”)
pursuant to the Security Agreement dated as of April 8, 2015 (as it may be from time to time amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”), among BREITBURN OPERATING LP,
Breitburn Energy Partners LP, BREITBURN FINANCE CORPORATION, the other Debtors named
therein and U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent. Capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed thereto in the Security Agreement.


 


By executing and delivering
this Security Agreement Supplement, Debtor hereby becomes a party to the Security Agreement with the same force and effect as if
originally named a “Debtor” therein, and without limiting the generality of the foregoing, (a) Debtor hereby expressly
assumes all obligations and liabilities of a Debtor thereunder and agrees to be bound by the terms thereof, and (b) confirms the
grant to the Collateral Agent set forth in Paragraph 2 of the Security Agreement of, and in order to secure the full
and complete payment and performance of the Obligations when due, Debtor hereby grants to the Collateral Agent, for its benefit
and for the benefit of the Holders, a security interest in and lien on, all of Debtor’s right, title and interest in and
to all Collateral, whether now or hereafter existing or in which Debtor now has or hereafter acquires an interest and wherever
the same may be located, and Debtor hereby pledges, collaterally transfers, and assigns the Collateral (whether now or hereafter
existing or in which Debtor now has or hereafter acquires an interest and wherever the same may be located), to the Collateral
Agent, for its benefit and the benefit of the Holders, all upon and subject to the terms and conditions of the Security Agreement.


 


Debtor represents and warrants
that the attached supplements to the Annexes to the Security Agreement accurately and completely set forth all information required
pursuant to the Security Agreement with respect to Debtor and its properties and assets, and hereby agrees that such supplements
to the Annexes to the Security Agreement shall constitute part of the Annexes to the Security Agreement. Debtor hereby represents
and warrants that each of the representations and warranties set forth in the Security Agreement as to such Debtor is true and
correct on and as of the date thereof (after giving effect to this Supplement) as if made on and as of such date.


 


This
Security Agreement Supplement shall be governed by and construed in accordance with the laws of the State of New York.


 


Attachment A to Security Agreement


 




    	 



    	 



    

 


IN WITNESS WHEREOF,
Debtor has caused this Security Agreement Supplement to be duly executed and delivered by its duly authorized officer as of
the date first set forth above.


 


	 	[NAME OF DEBTOR] 
	 	 	 
	 	By: 	 
	 	Name: 
	 	Title: 


 


Attachment A to Security Agreement


 




    	 



    	 



    

 


Attachments – Annexes A, B and C are
to be attached to each Security Agreement Supplement, in the same form as Annexes A, B and C to the Security Agreement.


 


ANNEX A TO SECURITY AGREEMENT


 


DEBTOR INFORMATION


 


The mailing address and location of books and records for Breitburn
Operating LP is:


 


515 S. Flower Street, Suite 4800


Los Angeles, California 90071


Attention: Chief Financial Officer


 


The mailing address and location of books and records for each of
the other debtors is:


 


c/o Breitburn Operating LP


515 S. Flower Street, Suite 4800


Los Angeles, California 90071


Attention: Chief Financial Officer


 


	Legal Name of Debtor	 	Type of Entity	 	Jurisdiction of

 Organization	 	
        State Issued

        Organizational

        Identification No.

	Alamitos Company	 	Corporation	 	California	 	C1491741
	Beaver Creek Pipeline, L.L.C. 	 	Limited Liability Company	 	Michigan	 	B50927
	Breitburn Energy Partners LP	 	Limited Partnership	 	Delaware	 	4096475
	Breitburn Finance Corporation	 	Corporation	 	Delaware	 	4693387
	Breitburn Florida LLC	 	Limited Liability Company	 	Delaware	 	4355916
	Breitburn GP LLC	 	Limited Liability Company	 	Delaware	 	4096474
	Breitburn Management Company LLC	 	Limited Liability Company	 	Delaware	 	4132203
	Breitburn Oklahoma LLC	 	Limited Liability Company	 	Delaware	 	5360372
	Breitburn Operating GP LLC	 	Limited Liability Company	 	Delaware	 	4169857
	Breitburn Operating LP	 	Limited Partnership	 	Delaware	 	4169880
	Breitburn Sawtelle LLC (f/k/a Breitburn Fulton LLC) 	 	Limited Liability Company	 	Delaware	 	3144632
	Breitburn Transpetco GP LLC	 	Limited Liability Company	 	Delaware	 	3958596


 


Annex A to Security Agreement


 




    	 



    	 



    

 


	Legal Name of Debtor	 	Type of Entity	 	Jurisdiction of

 Organization	 	
        State Issued

        Organizational

        Identification No.

	Breitburn Transpetco LP LLC	 	Limited Liability Company	 	Delaware	 	3958609
	GTG Pipeline LLC	 	Limited Liability Company	 	Virginia	 	S239225-8
	Mercury Michigan Company, LLC	 	Limited Liability Company	 	Michigan	 	D24776
	Phoenix Production Company	 	Corporation	 	Wyoming	 	1989-000257711
	QR Energy, LP	 	Limited Partnership	 	Delaware	 	4872553
	QRE GP, LLC	 	Limited Liability Company	 	Delaware	 	4872554
	QRE Operating, LLC	 	Limited Liability Company	 	Delaware	 	4891741
	Terra Energy Company LLC	 	Limited Liability Company	 	Michigan	 	D24772
	Terra Pipeline Company LLC	 	Limited Liability Company	 	Michigan	 	D2476X
	Transpetco Pipeline Company, L.P.	 	Limited Partnership	 	Delaware	 	2501840


 


Annex A to Security Agreement


 




    	 



    	 



    

 


ANNEX B TO SECURITY AGREEMENT


 


INFORMATION REGARDING CERTAIN COLLATERAL


 


Debtors


 


I.            INTELLECTUAL PROPERTY


 


A.           Registered
Copyrights, Copyright Applications, Material Unregistered Copyrights


 


None.


 


B.           Issued
Patents and Patent Applications


 


None.


 


C.           Registered
Trademarks, Trademark Applications, Unregistered Trademarks


 


	Mark	 	Int. Cl.	 	Identifier 	 	Registration Date
	BREITBURN	 	37	 	Reg. No. 3,435,162	 	May 27, 2008
		 	37	 	Reg. No. 4,675,322	 	January 20, 2015
		 	37	 	Reg. No. 4,681,437	 	February 3, 2015


 


Annex B to Security Agreement


 




    	 



    	 



    

 


ANNEX C TO SECURITY AGREEMENT


 


DESCRIPTION OF PLEDGED SHARES, LIMITED
LIABILITY COMPANY INTERESTS 


AND PARTNERSHIP INTERESTS


 


Pledged Stock:


 


	Issuer	 	Owner of Stock	 	Class of Stock	 	Certificate No.	 	No. of Shares
	
        Alamitos Company

         
	 	Breitburn Operating LP	 	Common  Stock	 	11	 	1,110
	Breitburn Finance Corporation	 	Breitburn Energy Partners LP	 	Common Stock	 	N/A	 	100%
	Phoenix Production Company	 	Breitburn Operating LP	 	Common Stock	 	6	 	2,500


 


Pledged LLC Interests:


 


	Name of LLC	 	Owner of 

Interests	 	Class of Interest	 	Certificate No.	 	Percentage Interest
	Beaver Creek Pipeline, L.L.C.	 	Breitburn Operating LP	 	Membership	 	N/A	 	50%
	Beaver Creek Pipeline, L.L.C.	 	Mercury Michigan Company, LLC	 	Membership	 	N/A	 	50%
	Breitburn Florida LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%
	Breitburn Management Company LLC	 	Breitburn Energy Partners LP	 	Membership	 	N/A	 	100%
	Breitburn Oklahoma LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%
	Breitburn Operating GP LLC	 	Breitburn Energy Partners LP	 	Membership	 	N/A	 	100%
	Breitburn Sawtelle LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%
	Breitburn Transpetco GP LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%
	Breitburn Transpetco LP LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%
	GTG Pipeline LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%
	Mercury Michigan Company, LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%
	Terra Energy Company LLC	 	Breitburn Operating LP	 	Membership	 	N/A	 	100%


 


Annex C to Security Agreement


 




    	 



    	 



    

 


	Name of LLC	 	Owner of 

Interests	 	Class of Interest	 	Certificate No.	 	Percentage Interest
	Terra Pipeline Company LLC	 	Terra Energy Company LLC	 	Membership	 	N/A	 	100%
	 	 	 	 	 	 	 	 	 
	QRE Operating, LLC	 	QR Energy, LP	 	Membership	 	1	 	100%


 


Pledged Partnership Interests:


 


	
        Name of 

        Partnership
	 	Owner of

 Interests	 	Class of Interest	 	Certificate No.	 	Percentage Interest
	Breitburn Operating LP	 	Breitburn Energy Partners LP	 	Limited Partner	 	N/A	 	99.999%
	Breitburn Operating LP	 	Breitburn Operating GP LLC 	 	General Partner	 	N/A	 	0.001%
	Terra-Westside Processing Company	 	Terra Energy Company LLC	 	General Partner	 	N/A	 	15%
	Transpetco Pipeline Company, L.P.	 	Breitburn Transpetco LP LLC	 	Limited Partner	 	N/A	 	59%
	Transpetco Pipeline Company, L.P.	 	Breitburn Transpetco GP LLC	 	General Partner	 	N/A	 	1%
	Transpetco Pipeline Company, L.P.	 	Breitburn Operating LP	 	Limited Partner	 	N/A	 	39%
	Transpetco Pipeline Company, L.P.	 	Breitburn Operating LP	 	General Partner	 	N/A	 	1%
	QR Energy, LP	 	Breitburn Operating LP	 	Limited Partner	 	N/A	 	100%


 


Annex C to Security Agreement


 




    	 



    	 



    

 


ANNEX D TO SECURITY AGREEMENT


 


ACKNOWLEDGMENT OF PLEDGE


 


CORPORATION/PARTNERSHIP/LIMITED LIABILITY COMPANY:
_______________________ (the “Issuer”)


 


INTEREST OWNER: __________________________
 (the “Interest Owner”)


 


SECURITY AGREEMENT: Security Agreement dated
as of April 8, 2015 (as amended, modified, supplemented, or restated from time to time, the “Security Agreement”).
Capitalized terms not defined herein have the meanings assigned thereto in the Security Agreement.


 


DATE: _______________


 


BY THIS ACKNOWLEDGMENT OF PLEDGE dated as of
the date first above written, the Issuer hereby acknowledges the pledge in favor of U.S. Bank, National Association (“Pledgee”),
in its capacity as the Collateral Agent under the Security Agreement, against, and a security interest in favor of Pledgee in,
all of the Interest Owner’s rights in connection with any equity interest in the Issuer now and hereafter owned by the Interest
Owner (“Issuer Interest”).


 


A.           Pledge
Records. The Issuer has identified Pledgee’s interest in all of the Interest Owner’s right, title, and interest
in and to all of the Interest Owner’s Issuer Interest as subject to a pledge and security interest in favor of Pledgee in
the Issuer’s books and records.


 


B.           Issuer
Distributions, Accounts, and Correspondence. The Issuer hereby agrees and acknowledges that if at any time the Issuer receives
instructions originated by Pledgee relating to the Issuer Interest, the Issuer shall comply with such instructions without further
consent by the Interest Owner or any other person. Without limiting the foregoing, the Issuer hereby acknowledges that upon demand
of Pledgee and subject to the Intercreditor Agreement, (i) all proceeds, distributions, and other amounts payable to the Interest
Owner, including upon the termination, liquidation, and dissolution of the Issuer, shall be paid and remitted to the Pledgee, (ii)
all funds in deposit accounts held for the account of, or otherwise payable to, the Interest Owner shall be held for the benefit
of Pledgee, and (iii) all future correspondence, accountings of distributions, and tax returns of the Issuer shall be provided
to the Pledgee. The Issuer acknowledges and accepts such direction and hereby agrees that it shall, upon the written demand by
the Pledgee, pay directly to the Pledgee (or the Priority Lien Collateral Agent in accordance with the Intercreditor Agreement)
to its offices as shall be specified by the Pledgee any and all distributions, income, and cash flow arising from the Issuer Interests
whether payable in cash, property or otherwise, subject to and in accordance with the terms and conditions of the organizational
documents of the Issuer. The Pledgee may from time to time notify the Issuer of any change of address to which such amounts are
to be paid.


 


Notwithstanding anything herein to the contrary,
this Acknowledgement of Pledge is subject to the provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of any Intercreditor Agreement and the terms of this Acknowledge of Pledge, the terms of such Intercreditor Agreement
shall govern and control.


 


Remainder of Page Intentionally Blank.


Signature Page to Follow.


 


Annex D to Security Agreement


 




    	 



    	 



    

 


EXECUTED as of the date first stated in this
Acknowledgment of Pledge.


 


[ISSUER]


 


	 	By:	,
	 	 	as [General Partner] [Manager]
	 	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 


 


Annex D to Security Agreement