**EXHIBIT 10.8**

 

ExecutionVersion

 

**SUBORDINATEDPLEDGE AGREEMENT**

 

THIS SUBORDINATED PLEDGE AGREEMENT dated as of March 17, 2008(this “Pledge Agreement”) is by and among CANO PETROLEUM, INC., aDelaware corporation (“Borrower”), each subsidiary of the Borrowersignatory hereto (together with the Borrower, the “Pledgors” andindividually, each a “Pledgor”) and UnionBanCal Equities, Inc. asAdministrative Agent (in such capacity the “Administrative Agent”) underthe Credit Agreement (as hereinafter defined), for its benefit and the benefitof the Lenders (as hereinafter defined).

 

**RECITALS**

 

A.                                   TheBorrower, the lenders party thereto from time to time (the “Lenders”;together with the Administrative Agent, the “‘Secured Parties”), and theAdministrative Agent have entered into that certain Subordinated CreditAgreement dated of even date herewith (as it may be amended, restated,supplemented or otherwise modified from time to time, the “Credit Agreement”).

 

B.                                     Itis a condition precedent to the extension of credit to the Borrower under theCredit Agreement that the Pledgors and the Administrative Agent, on behalf ofthe Lenders, execute and deliver this Pledge Agreement.

 

C.                                     EachPledgor (other than the Borrower) is a subsidiary of the Borrower, andtherefore shall derive direct and indirect benefits from the transactionscontemplated by the Credit Agreement.

 

**AGREEMENT**

 

NOW, THEREFORE, in consideration of theforegoing and other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged and confessed, each Pledgor herebyagrees with the Administrative Agent for the benefit of the Secured Parties asfollows:

 

Section 1.  Definitions.  All capitalized terms not otherwise definedin this Pledge Agreement that are defined in the Credit Agreement shall havethe meanings assigned to such terms by the Credit Agreement.  Any terms used in this Pledge Agreement thatare defined in the Uniform Commercial Code in effect in the State of Texas fromtime to time (the “UCC”) and not otherwise defined herein or in the CreditAgreement, shall have the meanings assigned to those terms by the UCC.  All meanings to defined terms, unlessotherwise indicated, are to be equally applicable to both the singular and pluralforms of the terms defined.  Article,Section, Schedule, and Exhibit references are to Articles and Sections ofand Schedules and Exhibits to this Pledge Agreement, unless otherwisespecified.  All references toinstruments, documents, contracts, and agreements are references to such instruments,documents, contracts, and agreements as the same may be amended, supplemented,and otherwise modified from time to time, unless otherwise specified.  The words “hereof”, “herein” and “hereunder”and words of similar import when used in this Pledge Agreement shall refer tothis Pledge Agreement as a whole and not to any particular provision of thisPledge Agreement.  As used herein, theterm “including” means “including, without limitation,”. Paragraph headingshave been inserted in this Pledge Agreement 

 

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as a matter of convenience forreference only and it is agreed that such paragraph headings are not a part ofthis Pledge Agreement and shall not be used in the interpretation of anyprovision of this Pledge Agreement.

 

Section 2.  Pledge.

 

2.01.                        Grantof Pledge.

 

(a)                                  EachPledgor hereby pledges to the Administrative Agent, and grants to theAdministrative Agent, for the benefit of the Secured Parties, a continuingsecurity interest in, the Pledged Collateral, as defined in Section 2.02below.  This Pledge Agreement shallsecure (i) all Obligations (as defined in the Credit Agreement) now orhereafter existing (ii) all other amounts now or hereafter owed by theBorrower, any Pledgor, or any of their respective Subsidiaries under thisPledge Agreement or the other Loan Documents to the Administrative Agent or anyother Lender, and (iii) any increases, extensions, modifications,substitutions, amendments, restatements and renewals of any of the foregoing obligations,whether for principal, interest, fees, expenses, indemnification or otherwise.**** Allsuch obligations shall be referred to in this Pledge Agreement as the “SecuredObligations”.

 

(b)                                 Notwithstandinganything contained herein to the contrary, it is the intention of each Pledgor,the Administrative Agent and the Lenders that the amount of the SecuredObligation secured by each Pledgor’s interests in any of its property or assets(whether real or personal, or mixed, tangible or intangible) (“Property”)shall be in, but not in excess of, the maximum amount permitted by fraudulentconveyance, fraudulent transfer and other similar law, rule or regulationof any Governmental Authority applicable to such Pledgor.  Accordingly, notwithstanding anything to thecontrary contained in this Pledge Agreement or in any other agreement orinstrument executed in connection with the payment of any of the SecuredObligations, the amount of the Secured Obligations secured by each Pledgor’sinterests in any of its Property pursuant to this Pledge Agreement shall belimited to an aggregate amount equal to the largest amount that would notrender such Pledgor’s obligations hereunder or the liens and security interestgranted to the Administrative Agent hereunder subject to avoidance under Section 548of the United States Bankruptcy Code or any comparable provision of any otherapplicable law.

 

2.02.                        PledgedCollateral.  “Pledged Collateral”shall mean all of each Pledgor’s right, title, and interest in the following,whether now owned or hereafter acquired:

 

(a)                                  (i) allof the membership interests listed in the attached Schedule 2.02(a) issuedto such Pledgor and all such additional membership interests of any issuer ofsuch interests hereafter acquired by such Pledgor (the “Membership Interests”),(ii) the certificates representing the Membership Interests, if any, and (iii) allrights to money or Property which such Pledgor now has or hereafter acquires inrespect of the Membership Interests, including, without limitation, (A) anyproceeds from a sale by or on behalf of such Pledgor of any of the MembershipInterests, and (B) any distributions, dividends, cash, instruments andother property from time-to-time received or otherwise distributed 

 

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in respect of the Membership Interests, whether regular, special ormade in connection with the partial or total liquidation of the issuer andwhether attributable to profits, the return of any contribution or investmentor otherwise attributable to the Membership Interests or the ownership thereof (collectively,the “Membership Interests Distributions”);

 

(b)                                 (i) allof the general and limited partnership interests listed in the attachedSchedule 2.02(b) issued to such Pledgor and all such additional limited orgeneral partnership interests of any issuer of such interests hereafteracquired by such Pledgor (the “Partnership Interests”), and (ii) allrights to money or Property which such Pledgor now has or hereafter acquires inrespect of the Partnership Interests, including, without limitation, (A) any proceeds from a sale by oron behalf of such Pledgor of any of the Partnership Interests, and (B) anydistributions, dividends, cash, instruments and other property fromtime-to-time received or otherwise distributed in respect of the PartnershipInterests, whether regular, special or made in connection with the partial ortotal liquidation of the issuer and whether attributable to profits, the returnof any contribution or investment or otherwise attributable to the PartnershipInterests or the ownership thereof (collectively, the “Partnership InterestsDistributions”);

 

(c)                                  (i) allof the shares of stock listed in the attached Schedule 2.02(c) issued tosuch Pledgor and all such additional shares of stock of any issuer of suchshares of stock hereafter issued to such Pledgor (the “Pledged Shares”),(ii) the certificates representing the Pledged Shares, and (iii) allrights to money or Property which such Pledgor now has or hereafter acquires inrespect of the Pledged Shares, including, without limitation, (A) anyproceeds from a sale by or on behalf of such Pledgor of any of the PledgedShares, and (B) any distributions, dividends, cash, instruments and otherproperty from time-to-time received or otherwise distributed in respect of thePledged Shares, whether regular, special or made in connection with the partialor total liquidation of the issuer and whether attributable to profits, thereturn of any contribution or investment or otherwise attributable to thePledged Shares or the ownership thereof (collectively, the “Pledged SharesDistributions”; together with the Membership Interests Distributions andthe Partnership Interest Distributions, the “Distributions”); and

 

(d)                                 allproceeds from the Pledged Collateral described in paragraphs (a), (b) and (c) ofthis Section 2.02.

 

2.03.                        Deliveryof Pledged Collateral.  Allcertificates or instruments, if any, representing the Pledged Collateral shallbe delivered to the Administrative Agent and shall be in suitable form fortransfer by delivery, or shall be accompanied by duly executed instruments oftransfer or assignment in blank, all in form and substance reasonablysatisfactory to the Administrative Agent. After the occurrence and during the continuance of an Event of Default,the Administrative Agent shall have the right, upon prior written notice to theapplicable Pledgor, to transfer to or to register in the name of theAdministrative Agent or any of its nominees any of the Pledged Collateral,subject to the rights specified in Section 2.04.  In addition, after the occurrence and duringthe continuance of an Event of Default, the Administrative Agent shall have theright at any time to exchange the certificates or instruments representing thePledged Collateral for certificates or instruments of smaller or largerdenominations.

 

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2.04.                        RightsRetained by Pledgor.  Notwithstandingthe pledge in Section 2.01,

 

(a)                                  solong as no Event of Default shall have occurred and remain uncured or unwaivedand except as otherwise provided in the Credit Agreement, (i) each Pledgorshall be entitled to receive and retain any dividends and other Distributionspaid on or in respect of the Pledged Collateral and the proceeds of any sale ofthe Pledged Collateral; and (ii) each Pledgor shall be entitled toexercise any voting and other consensual rights pertaining to its PledgedCollateral for any purpose not inconsistent with the terms of this PledgeAgreement or the Credit Agreement; provided, however, that noPledgor shall exercise nor shall it refrain from exercising any such right ifsuch action or inaction, as applicable, would have a materially adverse effecton the value of the Pledged Collateral; and

 

(b)                                 ifan Event of Default shall have occurred and remain uncured or unwaived,

 

(i)                                     untilsuch time thereafter as the Administrative Agent gives written notice of itselection to exercise such voting and other consensual rights pursuant to Section 5.02hereof, each Pledgor shall be entitled to exercise any voting and otherconsensual rights pertaining to its Pledged Collateral for any purpose notinconsistent with the terms of this Pledge Agreement or the Credit Agreement; provided,however, that no Pledgor shall exercise nor shall it refrain fromexercising any such right if such action or inaction, as applicable, would havea materially adverse effect on the value of the Pledged Collateral; and

 

(ii)                                  atand after such time as the Administrative Agent gives written notice of itselection to exercise such voting and other consensual rights pursuant to Section 5.02hereof, each Pledgor shall execute and deliver (or cause to be executed anddelivered) to the Administrative Agent all proxies and other instruments as theAdministrative Agent may reasonably request to enable the Administrative Agentto (A) exercise the voting and other rights which such Pledgor is entitledto exercise pursuant to paragraph (a) or paragraph (b)(i) ofthis Section 2.04, and (B) receive any Distributions and proceeds ofsale of the Pledged Collateral which such Pledgor is authorized to receive andretain pursuant to paragraph (a)(i) of this Section 2.04.

 

Section 3.  Pledgor’sRepresentations and Warranties.  EachPledgor represents and warrants to the Administrative Agent and the Lenders asfollows:

 

(a)                                  ThePledged Collateral applicable to such Pledgor listed on the attachedSchedules 2.02(a), 2.02(b) and 2.02(c) have been duly authorizedand validly issued to such Pledgor and are fully paid and nonassessable.

 

(b)                                 SuchPledgor is the legal and beneficial owner of the Pledged Collateral free andclear of any Lien or option, except for (i) the security interest createdby this Pledge Agreement and (ii) other Liens permitted under the CreditAgreement ( the “Permitted Liens”).

 

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(c)                                  Noauthorization, authentication, approval, or other action by, and no notice toor filing with, any Governmental Authority or regulatory body is requiredeither (a) for the pledge by such Pledgor of the Pledged Collateralpursuant to this Pledge Agreement or for the execution, delivery, orperformance of this Pledge Agreement by such Pledgor or (b) for theexercise by the Administrative Agent or any Secured Party of the voting orother rights provided for in this Pledge Agreement or the remedies in respectof the Pledged Collateral pursuant to this Pledge Agreement (except as may berequired in connection with such disposition by laws affecting the offering andsale of securities generally).

 

(d)                                 SuchPledgor has the full right, power and authority to deliver, pledge, assign andtransfer the Pledged Collateral to the Administrative Agent.

 

(e)                                  TheMembership Interests listed on the attached Schedule 2.02(a) constitutethe percentage of the issued and outstanding membership interests of therespective issuer thereof set forth on Schedule 2.02(a) and all of theEquity Interest in such issuer in which the Pledgor has any ownership interest.

 

(f)                                    ThePartnership Interests listed on the attached Schedule 2.02(b) constitutethe percentage of the issued and outstanding general and limited partnershipinterests of the respective issuer thereof set forth on Schedule 2.02(b) andall of the Equity Interest in such issuer in which the Pledgor has anyownership interest.

 

(g)                                 ThePledged Shares list on the attached Schedule 2.02(c) constitute thepercentage of the issued and outstanding shares of capital stock of therespective issuer thereof set forth on Schedule 2.02(c) and all of theEquity Interest in such issuer in which the Pledgor has any ownership interest.

 

(h)                                 Schedule3 sets forth its sole jurisdiction of formation, type of organization, federaltax identification number, the organizational number, and all names used by itduring the last five years prior to the date of this Pledge Agreement.

 

Section 4.  Pledgor’sCovenants.  During the term of thisPledge Agreement and until all of the Secured Obligations have been fully andfinally paid and discharged in full, the Commitments under the Credit Agreementhave been terminated or expired, and the Credit Agreement has been terminatedin writing, each Pledgor covenants and agrees with the Administrative Agentthat:

 

4.01.                        ProtectCollateral; Further Assurances.  EachPledgor will warrant and defend the rights and title herein granted unto theAdministrative Agent in and to the Pledged Collateral (and all right, title,and interest represented by the Pledged Collateral) against the claims anddemands of all Persons whomsoever.  EachPledgor agrees that, at the expense of such Pledgor, such Pledgor will promptlyexecute and deliver all further instruments and documents, and take all furtheraction, that may be reasonably necessary and that the Administrative Agent orany Secured Party may reasonably request, in order to perfect and protect anysecurity interest granted or purported to be granted hereby or to enable theAdministrative Agent or any Secured Party to exercise and enforce its rightsand remedies hereunder with respect to any Pledged 

 

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Collateral.  Each Pledgor hereby authorizes theAdministrative Agent to file any financing statements, amendments orcontinuations without the signature of such Pledgor to the extent permitted byapplicable law in order to perfect or maintain the perfection of any securityinterest granted under this Pledge Agreement.

 

4.02.                        Transfer,Other Liens, and Additional Shares. Each Pledgor agrees that it will not (a) except as otherwisepermitted by the Credit Agreement, sell or otherwise dispose of, or grant anyoption with respect to, any of the Pledged Collateral or (b) create orpermit to exist any Lien upon or with respect to any of the Pledged Collateral,except for Permitted Liens.  Each Pledgoragrees that it will (i) cause each issuer of the Pledged Collateral thatis a Subsidiary of such Pledgor not to issue any other Equity Interests inaddition to or in substitution for the Pledged Collateral issued by suchissuer, except to such Pledgor or any other Pledgor and (ii) pledgehereunder, immediately upon its acquisition (directly or indirectly) thereof,any additional Equity Interests of an issuer acquired by such Pledgor.  No Pledgor shall approve any amendment ormodification of any of the Pledged Collateral without the Administrative Agent’sprior written consent.

 

4.03.                        Jurisdictionof Formation; Name Change.  EachPledgor shall give the Administrative Agent at least 30 days’ prior writtennotice before it (i) in the case of a Pledgor that is not a “registeredorganization” (as defined in Section 9-102 of the UCC) changes thelocation of its principal place of business and chief executive office, or (ii) usesa trade name other than its current name used on the date hereof.  Other than as permitted by Section 6.11of the respective Credit Agreement, no Pledgor shall amend, supplement, modifyor restate its articles or certificate of incorporation, bylaws, limitedliability company agreements, or other equivalent organizational documents, noramend its name or change its jurisdiction of incorporation, organization orformation.

 

Section 5.  Remediesupon Default.  If any Event ofDefault shall have occurred and be continuing:

 

5.01.                        UCCRemedies.  To the extent permitted bylaw, the Administrative Agent may exercise in respect of the PledgedCollateral, in addition to other rights and remedies provided for in thisPledge Agreement or otherwise available to it, all the rights and remedies of aAdministrative Agent under the UCC (whether or not the UCC applies to theaffected Pledged Collateral).

 

5.02.                        Dividendsand Other Rights.

 

(a)                                  Allrights of the Pledgors to exercise the voting and other consensual rights whichit would otherwise be entitled to exercise pursuant to Section 2.04(a) maybe exercised by the Administrative Agent if the Administrative Agent so electsand gives written notice of such election to the affected Pledgor and allrights of the Pledgors to receive any Distributions on or in respect of thePledged Collateral and the proceeds of sale of the Pledged Collateral which itwould otherwise be authorized to receive and retain pursuant to Section 2.04(b) shallcease.

 

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(b)                                 AllDistributions on or in respect of the Pledged Collateral and the proceeds ofsale of the Pledged Collateral which are received by any Pledgor shall bereceived in trust for the benefit of the Administrative Agent, shall besegregated from other funds of such Pledgor, and shall be promptly paid over tothe Administrative Agent as Pledged Collateral in the same form as so received(with any necessary indorsement).

 

5.03.                        Saleof Pledged Collateral. The Administrative Agent may sell all or part of thePledged Collateral at public or private sale, at any of the AdministrativeAgent’s offices or elsewhere, for cash, on credit, or for future delivery, andupon such other terms as the Administrative Agent may deem commerciallyreasonable in accordance with applicable laws. Each Pledgor agrees that to the extent permitted by law such sales maybe made without notice.  If notice isrequired by law, each Pledgor hereby deems 10 days’ advance notice of the timeand place of any public sale or the time after which any private sale is to bemade reasonable notification, recognizing that if the Pledged Collateralthreatens to decline speedily in value or is of a type customarily sold on arecognized market shorter notice may be reasonable.  The Administrative Agent shall not beobligated to make any sale of the Pledged Collateral regardless of notice ofsale having been given.  TheAdministrative Agent may adjourn any public or private sale from time-to-timeby 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 soadjourned.  Each Pledgor shall fullycooperate with Administrative Agent in selling or realizing upon all or anypart of the Pledged Collateral.  In addition,each Pledgor shall fully comply with the securities laws of the United States,the State of Texas, and other states and take such actions as may be necessaryto permit Administrative Agent to sell or otherwise dispose of any securitiesrepresenting the Pledged Collateral in compliance with such laws.

 

5.04.                        ExemptSale.  If, in the opinion of theAdministrative Agent, there is any question that a public or semipublic sale ordistribution of any Pledged Collateral will violate any state or federalsecurities law, the Administrative Agent in its reasonable discretion (a) mayoffer and sell securities privately to purchasers who will agree to take themfor investment purposes and not with a view to distribution and who will agreeto imposition of restrictive legends on the certificates representing thesecurity, or (b) may sell such securities in an intrastate offering under Section 3(a)(11)of the Securities Act of 1933, as amended, and no sale so made in good faith bythe Administrative Agent shall be deemed to be not “commercially reasonable”solely because so made.  Each Pledgorshall cooperate fully with the Administrative Agent in selling or realizingupon all or any part of the Pledged Collateral.

 

5.05.                        Applicationof Collateral. The proceeds of any sale, or other realization (other thanthat received from a sale or other realization permitted by the CreditAgreement) upon all or any part of the Pledged Collateral pledged by thePledgors shall be applied by the Administrative Agent as set forth in Section 7.06of the Credit Agreement.

 

5.06.                        CumulativeRemedies.  Each right, power andremedy herein specifically granted to the Administrative Agent or otherwiseavailable to it shall be cumulative, and shall be in addition to every otherright, power and remedy herein specifically given or now or hereafter existingat law, in equity, or otherwise, and each such right, power and remedy, whetherspecifically granted herein or otherwise existing, may be exercised at any timeand from time-to-time as often and in such order as may be deemed expedient bythe Administrative Agent in its 

 

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sole discretion.  No failure on the part of the AdministrativeAgent to exercise, and no delay in exercising, and no course of dealing withrespect to, any such right, power or remedy, shall operate as a waiver thereof,nor shall any single or partial exercise of any such rights, power or remedypreclude any other or further exercise thereof or the exercise of any otherright.

 

Section 6.  AdministrativeAgent as Attorney-in-Fact for Pledgor.

 

6.01.                        AdministrativeAgent Appointed Attorney-in-Fact. Each Pledgor hereby irrevocably appoints the Administrative Agent assuch Pledgor’s attorney-in-fact, with full authority after the occurrence andduring the continuance of an Event of Default to act for such Pledgor and inthe name of such Pledgor, and, in the Administrative Agent’s discretion, totake any action and to execute any instrument which the Administrative Agentmay deem reasonably necessary or advisable to accomplish the purposes of thisPledge Agreement, including, without limitation, to receive, indorse, andcollect all instruments made payable to such Pledgor representing any dividend,or the proceeds of the sale of the Pledged Collateral, or other distribution inrespect of the Pledged Collateral and to give full discharge for the same.  **EachPledgor hereby acknowledges, consents and agrees that the power of attorneygranted pursuant to this Section is irrevocable and coupled with aninterest.**

 

6.02.                        AdministrativeAgent May Perform. The Administrative Agent may from time-to-time, atits option but at the Pledgors’ expense, perform any act which any Pledgoragrees hereunder to perform and which such Pledgor shall fail to perform afterbeing requested in writing so to perform (it being understood that no suchrequest need be given after the occurrence and during the continuance of anyEvent of Default and after notice thereof by the Administrative Agent to theaffected Pledgor) and the Administrative Agent may from time-to-time take anyother action which the Administrative Agent reasonably deems necessary for themaintenance, preservation or protection of any of the Pledged Collateral or ofits security interest therein.  TheAdministrative Agent shall provide notice to the affected Pledgor of any actiontaken hereunder; provided however, the failure to provide such notice shall notbe construed as a waiver of any rights of the Administrative Agent providedunder this Pledge Agreement or under applicable law.

 

6.03.                        AdministrativeAgent Has No Duty.  The powersconferred on the Administrative Agent hereunder are solely to protect itsinterest in the Pledged Collateral and shall not impose any duty on it toexercise any such powers.  Except forreasonable care of any Pledged Collateral in its possession and the accountingfor moneys actually received by it hereunder, the Administrative Agent shallhave no duty as to any Pledged Collateral or responsibility for taking anynecessary steps to preserve rights against prior parties or any other rightspertaining to any Pledged Collateral.

 

6.04.                        ReasonableCare.  The Administrative Agent shallbe deemed to have exercised reasonable care in the custody and preservation ofthe Pledged Collateral in its possession if the Pledged Collateral is accordedtreatment substantially equal to that which the Administrative Agent accordsits own property, it being understood that the Administrative Agent shall haveno responsibility for (a) ascertaining or taking action with respect tocalls, conversions, exchanges, maturities, tenders, or other matters relativeto any Pledged Collateral, whether or not the 

 

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Administrative Agent hasor is deemed to have knowledge of such matters, or (b) taking anynecessary steps to preserve rights against any parties with respect to anyPledged Collateral.

 

Section 7.  Miscellaneous.

 

7.01.                        Expenses.  The Pledgors will upon demand pay to theAdministrative Agent for its benefit and the benefit of the other SecuredParties the amount of any reasonable out-of-pocket expenses, including thereasonable fees and disbursements of its counsel and of any experts, which theAdministrative Agent and the other Lenders may incur in connection with (a) thecustody, preservation, use, or operation of, or the sale, collection, or otherrealization of, any of the Pledged Collateral, (b) the exercise orenforcement of any of the rights of the Administrative Agent or any Lender orany other Lenders hereunder, and (c) the failure by any Pledgor to performor observe any of the provisions hereof.

 

7.02.                        Amendments,Etc.  No amendment or waiver of anyprovision of this Pledge Agreement nor consent to any departure by any Pledgorherefrom shall be effective unless made in writing and executed by the affectedPledgor and the Administrative Agent, and such waiver or consent shall beeffective only in the specific instance and for the specific purpose for whichgiven.

 

7.03.                        Addressesfor Notices.  All notices and othercommunications provided for hereunder shall be in the manner and to theaddresses set forth in the Credit Agreement.

 

7.04.                        Continuing SecurityInterest; Transfer of Interest.

 

(a)                                  ThisPledge Agreement shall create a continuing security interest in the PledgedCollateral and, unless expressly released by the Administrative Agent, shall (i) remainin full force and effect until the indefeasible payment in full in cash of, andtermination of, the Secured Obligations and the termination of the Commitmentsunder the Credit Agreement, (ii) be binding upon the Pledgors, theAdministrative Agent, the Lenders and their successors, and assigns, and (iii) inure,together with the rights and remedies of the Administrative Agent hereunder, tothe benefit of and be binding upon, the Administrative Agent, and the Lendersand their respective successors, transferees, and assigns.  Without limiting the generality of theforegoing clause, when any Secured Party assigns or otherwise transfers anyinterest held by it under either the Credit Agreement or other Loan Document toany other Person pursuant to the terms of the Credit Agreement or such otherLoan Document, that other Person shall thereupon become vested with all thebenefits held by such Secured Party under this Pledge Agreement.

 

(b)                                 Uponthe indefeasible payment in full and termination of the Secured Obligations,the termination of all Commitments under the Credit Agreement, and thetermination of the Credit Agreement in writing, the security interest grantedhereby shall terminate and all rights to the Pledged Collateral shall revert tothe applicable Pledgor to the extent such Pledged Collateral shall not havebeen sold or otherwise applied pursuant to the terms hereof.  Upon any such termination, the AdministrativeAgent will, at the Pledgors’ expense, deliver all Pledged Collateral to theapplicable Pledgor, execute and 

 

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deliver to the applicable Pledgor such documents as such Pledgor shallreasonably request and take any other actions reasonably requested to evidenceor effect such termination.

 

7.05.                        Waivers.  Each Pledgor hereby waives:

 

(a)                                  promptness,diligence, notice of acceptance, and any other notice with respect to any ofthe Secured Obligations and this Pledge Agreement;

 

(b)                                 anyrequirement that the Administrative Agent or any Secured Party protect, secure,perfect, or insure any Lien or any Property subject thereto or exhaust anyright or take any action against any Pledgor, any Guarantor, or any otherPerson or any collateral; and

 

(c)                                  anyduty on the part of the Administrative Agent to disclose to any Pledgor anymatter, fact, or thing relating to the business, operation, or condition of anyPledgor, any Guarantor, or any other Person and their respective assets nowknown or hereafter known by such Person.

 

7.06.                        Severability.  Wherever possible each provision of thisPledge Agreement shall be interpreted in such manner as to be effective andvalid under applicable law, but if any provision of this Pledge Agreement shallbe prohibited by or invalid under such law, such provision shall be ineffectiveto the extent of such prohibition or invalidity, without invalidating theremainder of such provision or the remaining provisions of this PledgeAgreement.

 

7.07.                        Choiceof Law.  This Pledge Agreement shallbe governed by and construed and enforced in accordance with the laws of theState of Texas, except to the extent that the validity or perfection of thesecurity interests hereunder, or remedies hereunder, in respect of anyparticular Pledged Collateral are governed by the laws of a jurisdiction otherthan the State of Texas.

 

7.08.                        Counterparts.  The parties may execute this Pledge Agreementin counterparts, each of which constitutes an original, and all of which,collectively, constitute only one agreement. Delivery of an executed counterpart signature page by facsimile isas effective as executing and delivering this Pledge Agreement in the presenceof the other parties to this Pledge Agreement. In proving this Pledge Agreement, a party must produce or account onlyfor the executed counterpart of the party to be charged.

 

7.09.                        Headings.  Paragraph headings have been inserted in thisPledge Agreement as a matter of convenience for reference only and it is agreedthat such paragraph headings are not a part of this Pledge Agreement and shallnot be used in the interpretation of any provision of this Pledge Agreement.

 

7.10.                        Reinstatement.  If, at any time after payment in full of allSecured Obligations and termination of the Administrative Agent’s security interest,any payments on the Secured Obligations previously made must be disgorged byany Secured Party for any reason whatsoever, including, without limitation, theinsolvency, bankruptcy or reorganization of any Pledgor or any other Person,this Pledge Agreement and the Administrative Agent’s security interests herein 

 

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shall be reinstated as to alldisgorged payments as though such payments had not been made, and each Pledgorshall sign and deliver to the Administrative Agent all documents, and shall dosuch other acts and things, as may be necessary to reinstate and perfect theAdministrative Agent’s security interest. **EACH PLEDGOR SHALL DEFEND ANDINDEMNIFY THE ADMINISTRATIVE AGENT AND EACH OTHER****SECURED PARTY FROM ANDAGAINST ANY CLAIM, DAMAGE, LOSS, LIABILITY, COST OR EXPENSE UNDER THIS SECTION 7.10(INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES) IN THE DEFENSE OF ANY SUCHACTION OR SUIT INCLUDING SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSEARISING AS A RESULT OF THE INDEMNIFIED SECURED PARTY’S****OWNNEGLIGENCE BUT EXCLUDING SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSETHAT IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENTJURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED SECURED PARTY’S GROSSNEGLIGENCE OR WILLFUL MISCONDUCT.**

 

7.11.                        Conflicts.  In the event of any explicit or implicitconflict between any provisions of this Pledge Agreement and any provision ofthe Credit Agreement, the terms of the Credit Agreement shall be controlling.

 

7.12.                        AdditionalPledgors*.*  Pursuant to Section 6.15 of the CreditAgreement, certain Subsidiaries of the Borrower that were not in existence onthe date of the Credit Agreement are required to enter into this PledgeAgreement as Pledgors.  Upon executionand delivery after the date hereof by the Administrative Agent and suchSubsidiary of an instrument in the form of Annex 1, such Subsidiary shallbecome a Pledgor hereunder with the same force and effect as if originally namedas a Pledgor herein.  The execution anddelivery of any instrument adding an additional Pledgor as a party to thisPledge Agreement shall not require the consent of any other Pledgor hereunder.  The rights and obligations of each Pledgorhereunder shall remain in full force and effect notwithstanding the addition ofany new Pledgor as a party to this Pledge Agreement.

 

7.13.                        **Subordination and Intercreditor Agreement.  Reference is made to the Subordination andIntercreditor Agreement, dated as of March 17, 2008 (as amended, restated,supplemented or otherwise modified from time to time, the “Subordination and***Intercreditor Agreement***”),among Union Bank of California, N.A., as Senior Agent, and ****UnionBanCalEquities, Inc.,****************asSubordinated Agent, and certain other persons, party or that may become partythereto from time to time.  Notwithstandinganything herein to the contrary, this Pledge Agreement, the Liens grantedto the Administrative Agent pursuant to this Pledge Agreement and the exerciseof any right or remedy by the Administrative Agent or any of the Lendershereunder are subject to the provisions of the Subordination and IntercreditorAgreement.  In the event of any conflictbetween the terms of the Subordination and Intercreditor Agreement and this PledgeAgreement, the terms of the Subordination and Intercreditor Agreement shallgovern and control.**

 

7.14.                        EntireAgreement.  **THIS PLEDGE AGREEMENT, THE CREDIT AGREEMENT AND THEOTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOTBE CONTRADICTED BY**

 

11

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**EVIDENCEOF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.**

 

**THEREARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.**

 

[SIGNATURE PAGES FOLLOW]

 

12

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The partieshereto have caused this Pledge Agreement to be duly executed as of the datefirst above written.

 
|   | **PLEDGORS:**                    |
|--------|----------------------------------|
|   |                             |
|   | **CANO  PETROLEUM, INC.**        |
|   |                             |
|   | By:                              | /s/ Morris B. Smith |   |
|   |                             | Morris B. Smith |
|   |                             | Senior Vice President and Chief Financial   Officer |
|   |                             |   |
|   |                             |
|   | **W.O.  ENERGY, INC.**           |
|   | **W.O.  ENERGY OF NEVADA, INC.** |
|   |                             |
|   |                             |
|   | Each by:                         | /s/ Morris B. Smith |   |
|   |                             | Morris B. Smith |
|   |                             | Vice President |
|        |                                  |  |  |  |

 

 

*Signature Page toSubordinated Pledge Agreement*

 

----

 
|   | **ADMINISTRATIVE  AGENT:** |
|--------|----------------------------|
|   |                       |
|   | UNIONBANCAL EQUITIES, INC. |
|   |                       |
|   |                       |
|   | By:                        |  /s/  Henry Park |   |
|   |                       | Henry Park |
|   |                       | Senior Vice President |
|   |                       |
|   |                       |
|   | By:                        | /s/ Tom Thompson |   |
|   |                       | Tom Thompson |
|   |                       | Senior Vice President |
|        |                            |  |  |  |

* *

* *

*Signature Page toSubordinated Pledge Agreement*

 

----

** **

**SCHEDULE 2.02(a)**

 

**PLEDGED COLLATERAL**

 

Attached to and forming apart of that certain Subordinated Pledge Agreement dated March 17, 2008 byCano Petroleum, Inc., W.O. Energy of Nevada, Inc., and WO Energy, Inc.,as Pledgors, to UnionBanCal Equities, Inc., as the Administrative Agent.

 
| **Pledgor**               | ** ** | **Issuer**    | ** ** | **Type of Membership  Interest** | ** ** | **% of Membership Interest Owned** |
|---------------------------|------------|---------------|------------|--------------------------------------------|------------|---------------------------------------------------|
| Cano Petroleum, Inc. |       | Pantwist, LLC |       | Limited Liability                          |       | 100%                                              |

 

----

 

#### **SCHEDULE2.02(b)**

####  

**PLEDGED COLLATERAL**

 

Attached to and forming apart of that certain Subordinated Pledge Agreement dated March 17, 2008 byCano Petroleum, Inc., W.O. Energy of Nevada, Inc., and WO Energy, Inc.,as Pledgors, to UnionBanCal Equities, Inc., as the Administrative Agent.

 
| **Pledgor**                      | ** ** | **Issuer**                     | ** ** | **Type of Partnership  Interest** | ** ** | **% of Partnership Interest  Owned** |
|----------------------------------|------------|--------------------------------|------------|-----------------------------------|------------|--------------------------------------|
| W.O. Energy of Nevada, Inc. |       | W.O.  Operating Company, Ltd.  |       | Limited  Partnership Interest     |       | 95%  Limited Partnership Interest    |
| W.O. Energy of Nevada, Inc. |       | W.O.  Production Company, Ltd. |       | Limited  Partnership Interest     |       | 95%  Limited Partnership Interest    |
| WO  Energy, Inc.            |       | W.O.  Operating Company, Ltd.  |       | General  Partnership Interest     |       | 5%  General Partnership Interest     |
| WO  Energy, Inc.            |       | W.O.  Production Company, Ltd. |       | General  Partnership Interest     |       | 5%  General Partnership Interest     |

 

----

####  

#### **SCHEDULE2.02(c)**

####  

**PLEDGED COLLATERAL**

 

Attached to and forming apart of that certain Subordinated Pledge Agreement dated March 17, 2008 byCano Petroleum, Inc., W.O. Energy of Nevada, Inc., and WO Energy, Inc.,as Pledgors, to UnionBanCal Equities, Inc., as the Administrative Agent.

 
| **Pledgor**                       | ** ** | **Issuer**                           | ** ** | **Type of Shares** | ** ** | **Number of  Shares** | ** ** | **% of  Shares  Owned** | ** ** | **Certificate  No.** | ** ** |
|-----------------------------------|------------|--------------------------------------|------------|--------------------|------------|-----------------------|------------|-------------------------|------------|----------------------|------------|
| Cano  Petroleum, Inc.        |       | Square  One Energy, Inc.        |       | Common  Stock      |       | 1,500                 |       | 100                     | %          | 4                    |       |
| Cano  Petroleum, Inc.        |       | Ladder  Companies, Inc.         |       | Common  Stock      |       | 1,000                 |       | 100                     |       | 7                    |       |
| Cano  Petroleum, Inc.        |       | W.O.  Energy of Nevada, Inc.    |       | Common  Stock      |       | 1,200                 |       | 100                     | %          | 5                    |       |
| W.O.  Energy of Nevada, Inc. |       | WO  Energy, Inc.                |       | Common  Stock      |       | 1,100                 |       | 100                     | %          | 6                    |       |
| Cano  Petroleum Inc.              |       | Cano  Petro of New Mexico, Inc. |       | Common  Stock      |       | 100                   |       | 100                     | %          | 1                    |       |

 

----

 

**SCHEDULE 3**

 

**PLEDGOR INFORMATION**

 
| **Grantor:**                                       |   | Cano  Petroleum, Inc.          |
|----------------------------------------------------|--------|-------------------------------------|
|                                               |   |                                |
| **Sole Jurisdiction of Formation / Filing:**       |   | Delaware                            |
|                                               |   |                                |
| **Type of Organization:**                          |   | Corporation                         |
|                                               |   |                                |
| **Address where records for Collateral are kept:** |   | 801  Cherry Street, Suite 3200 |
|                                               |   | Fort  Worth, Texas 76102            |
|                                               |   |                                |
| **Organizational Number:**                         |   | 3664494                             |
|                                               |   |                                |
| **Federal Tax Identification Number:**             |   | 77-0635673                          |
|                                               |   |                                |
| **Prior Names:**                                   |   | Huron  Ventures, Inc.          |
|                                               |   |                                |
| **Grantor:**                                       |   | WO  Energy, Inc.               |
|                                               |   |                                |
| **Sole Jurisdiction of Formation / Filing:**       |   | Texas                               |
|                                               |   |                                |
| **Type of Organization:**                          |   | Corporation                         |
|                                               |   |                                |
| **Address where records for Collateral are kept:** |   | 801  Cherry Street, Suite 3200 |
|                                               |   | Fort  Worth, Texas 76102            |
|                                               |   |                                |
| **Organizational Number:**                         |   | 113518200                           |
|                                               |   |                                |
| **Federal Tax Identification Number:**             |   | 75-2303966                          |
|                                               |   |                                |
| **Prior Names:**                                   |   | None.                               |
|                                               |   |                                |
| **Grantor:**                                       |   | W.O.  Energy of Nevada, Inc.   |
|                                               |   |                                |
| **Sole Jurisdiction of Formation / Filing:**       |   | Nevada                              |
|                                               |   |                                |
| **Type of Organization:**                          |   | Corporation                         |
|                                               |   |                                |
| **Address where records for Collateral are kept:** |   | 801  Cherry Street, Suite 3200 |

 

----

 
|                                   |   | Fort  Worth, Texas 76102 |
|----------------------------------------|--------|--------------------------|
|                                   |   |                     |
| **Organizational Number:**             |   | C20757-1996-001          |
|                                   |   |                     |
| **Federal Tax Identification Number:** |   | 88-0369151               |
|                                   |   |                     |
| **Prior Names:**                       |   | None.                    |

 

----

 

Annex1 to the

SubordinatedPledge Agreement

 

SUPPLEMENT NO. [            ]  dated as of[               ](the “Supplement”), to the Pledge Agreement dated as of March       ,2008 (as amended, supplemented or otherwise modified from time to time, the “PledgeAgreement”) by and among CANO PETROLEUM, INC., a Delaware corporation (“Borrower”),each other party signatory hereto (together with the Borrower, the “Pledgors”and individually, each a “Pledgor”) and UnionBanCal Equities, Inc.as Administrative Agent (in such capacity, the “Administrative Agent”) underthe Credit Agreement (as hereinafter defined) for the benefit of the Lenders(as hereinafter defined).

 

**RECITALS**

 

A.            Reference is made to that certainSubordinated Credit Agreement dated as of March       ,2008 (as it may be amended, restated or otherwise modified from time to time,the “Credit Agreement”, among the Borrower, the lenders party theretofrom time to time (the “Lenders”), and the Administrative Agent; and

 

B.            The Pledgors have entered into the Pledge Agreement inorder to induce the Lenders to make the Advances under the CreditAgreement.  Pursuant to Section 6.15of the respective Credit Agreement, each Subsidiary of the Borrower that wasnot in existence on the date of the respective Master Debt Agreement isrequired to enter into the Pledge Agreement as a Pledgor upon becoming aSubsidiary.  Section 7.12 of thePledge Agreement provides that additional Subsidiaries of the Borrower maybecome Pledgors under the Pledge Agreement by execution and delivery of aninstrument in the form of this Supplement. The undersigned Subsidiary of the Borrower (the “New Pledgor”) isexecuting this Supplement in accordance with the requirements of the SeniorCredit Agreement to become a Pledgor under the Pledge Agreement.

 

C.            Capitalized terms used herein and not otherwise definedherein shall have the meanings assigned to such terms in the Pledge Agreementand the Credit Agreement.

 

Accordingly, theAdministrative Agent and the New Pledgor agree as follows:

 

SECTION 1.     In accordance with Section 7.12 of thePledge Agreement, the New Pledgor by its signature below becomes a Pledgorunder the Pledge Agreement with the same force and effect as if originallynamed therein as a Pledgor and the New Pledgor hereby agrees (a) to allthe terms and provisions of the Pledge Agreement applicable to it as a Pledgorthereunder and (b) represents and warrants that the representations andwarranties made by it as a Pledgor thereunder are true and correct on and as ofthe date hereof in all material respects. In furtherance of the foregoing, the New Pledgor, as security for thepayment and performance in full of the Secured Obligations, does hereby createand grant to the Administrative Agent, its successors and assigns, for thebenefit of the Secured Parties, their successors and assigns, a continuingsecurity interest in and lien on all of the New Pledgor’s right, title andinterest in and to the Pledged Collateral of the New Pledgor.  Each reference to a “Pledgor” in the PledgeAgreement shall be deemed to include the New Pledgor.  The Pledge Agreement is hereby incorporatedherein by reference.

 

1

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SECTION 2.     The New Pledgor represents and warrants tothe Administrative Agent and the other Secured Parties that this Supplement hasbeen duly authorized, executed and delivered by it and constitutes its legal,valid and binding obligation, enforceable against it in accordance with itsterms (subject to applicable bankruptcy, reorganization, insolvency, moratoriumor similar laws affecting creditors’ rights generally and subject, as toenforceability, to equitable principles of general application (regardless ofwhether enforcement is sought in a proceeding in equity or at law)).

 

SECTION 3.     This Supplement may be executed incounterparts, each of which shall constitute an original, but all of which whentaken together shall constitute a single contract.  This Supplement shall become effective whenthe Administrative Agent shall have received counterparts of this Supplementthat, when taken together, bear the signatures of the New Pledgor and the AdministrativeAgent.  Delivery of an executed signaturepage to this Supplement by facsimile transmission shall be as effective asdelivery of a manually signed counterpart of this Supplement.

 

SECTION 4.     The New Pledgor hereby represents andwarrants that (a) set forth on Schedules 2.02(a), 2.02(b), and 2.02(c) attachedhereto are true and correct schedules of all its Membership Interests,Partnership Interests and Pledged Shares, as each term is defined in the PledgeAgreement, and (b) set forth on Schedule 3 attached hereto are its solejurisdiction of formation, type of organization, its federal tax identificationnumber and the organizational number, and all names used by it during the lastfive years prior to the date of this Supplement.

 

SECTION 5.     Except as expressly supplemented hereby,the Pledge Agreement shall remain in full force and effect.

 

SECTION 6.     THIS SUPPLEMENT SHALL BE GOVERNED BY ANDCONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTSHEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGEDCOLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OFTEXAS.

 

SECTION 7.     In case any one or more of the provisionscontained in this Supplement should be held invalid, illegal or unenforceablein any respect, neither party hereto shall be required to comply with suchprovision for so long as such provision is held to be invalid, illegal orunenforceable, but the validity, legality and enforceability of the remainingprovisions contained herein and in the Pledge Agreement shall not in any way beaffected or impaired.  The parties heretoshall endeavor in good-faith negotiations to replace the invalid, illegal orunenforceable provisions with valid provisions the economic effect of whichcomes as close as possible to that of the invalid, illegal or unenforceableprovisions.

 

SECTION 8.     All communications and notices hereundershall be in writing and given as provided in the Pledge Agreement.  All communications and notices hereunder tothe New Pledgor shall be given to it at the address set forth under itssignature hereto.

 

2

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SECTION 9.     The New Pledgor agrees to reimburse theAdministrative Agent for its reasonable out-of-pocket expenses in connectionwith this Supplement, including the reasonable fees, other charges anddisbursements of counsel for the Administrative Agent.

 

**THISSUPPLEMENT, THE PLEDGE AGREEMENT, THE CREDIT AGREEMENT AND THE OTHER LOANDOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES.**

 

**THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIESHERETO.**

 

[SIGNATURES PAGES FOLLOW]

 

3

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INWITNESS WHEREOF, the New Pledgor and the Administrative Agent have dulyexecuted this Supplement to the Pledge Agreement as of the day and year firstabove written.

 
|   | **NEW PLEDGOR:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | [                                                                                                       ] |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | By:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|   | Name:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|   | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | **ADMINISTRATIVE AGENT:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | UNIONBANCAL EQUITIES, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | By:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|   | Name:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|   | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | By:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|   | Name:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|   | Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |  |  |  |  |  |  |

 

4

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Schedules

SupplementNo.     

tothe Pledge Agreement

 

#### Pledged Collateral of the New Pledgor

####  

#### SCHEDULE 2.02(a)

 
| **Issuer** | ** ** | **Type of Membership  Interest** | ** ** | **% of Membership Interest  Owned** |
|------------|------------|----------------------------------|------------|-------------------------------------|
|       |       |                             |       |                                |
|       |       |                             |       |                                |
|       |       |                             |       |                                |

 

SCHEDULE 2.02(b)

 
| **Issuer** | ** ** | **Type of Partnership  Interest** | ** ** | **% of Partnership Interest  Owned** |
|------------|------------|-----------------------------------|------------|--------------------------------------|
|       |       |                              |       |                                 |
|       |       |                              |       |                                 |
|       |       |                              |       |                                 |

 

SCHEDULE2.02(c)

 
| **Issuer** | ** ** | **Type of Shares** | ** ** | **Number of  Shares** | ** ** | **% of Shares  Owned** | ** ** | **Certificate No.** |
|------------|------------|--------------------|------------|-----------------------|------------|------------------------|------------|---------------------|
|       |       |               |       |                  |       |                   |       |                |
|       |       |               |       |                  |       |                   |       |                |
|       |       |               |       |                  |       |                   |       |                |

 

SCHEDULE 3

 
| New  Pledgor:                             |   |
|-------------------------------------------|--------|
|                                      |   |
| Sole  Jurisdiction of Formation / Filing: |   |
|                                      |   |
| Type  of Organization:                    |   |
|                                      |   |
| Organizational  Number:                   |   |
|                                      |   |
| Federal  Tax Identification Number:       |   |
|                                      |   |
| Prior  Names:                             |   |

 

5

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