**Exhibit 10.12**

 

**SUBORDINATEDPLEDGE AGREEMENT**

 

THIS SUBORDINATED PLEDGE AGREEMENT dated as of December 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 andplural forms of the terms defined. Article, Section, Schedule, and Exhibit references are to Articlesand Sections of and Schedules and Exhibits to this Pledge Agreement, unlessotherwise specified.  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 as a matter of convenience forreference only and it is agreed that such paragraph headings are 

 

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not a part of this PledgeAgreement and shall not be used in the interpretation of any provision of thisPledge 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 foregoingobligations, whether for principal, interest, fees, expenses, indemnificationor otherwise.**** All such obligations shall be referred to inthis Pledge Agreement as the “Secured Obligations”.

 

(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) any proceeds from a sale by oron behalf of such Pledgor of any of the Membership Interests, and (B) anydistributions, dividends, cash, instruments and other property fromtime-to-time received or otherwise distributed in respect of the MembershipInterests, whether regular, special or made in connection 

 

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with the partial or total liquidation of the issuer and whetherattributable to profits, the return of any contribution or investment orotherwise 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 Administrative Agent’soffices or elsewhere, for cash, on credit, or for future delivery, and uponsuch other terms as the Administrative Agent may deem commercially reasonablein accordance with applicable laws.  EachPledgor agrees that to the extent permitted by law such sales may be madewithout notice.  If notice is required bylaw, each Pledgor hereby deems 10 days’ advance notice of the time and place ofany public sale or the time after which any private sale is to be madereasonable notification, recognizing that if the Pledged Collateral threatensto decline speedily in value or is of a type customarily sold on a recognizedmarket shorter notice may be reasonable. The Administrative Agent shall not be obligated to make any sale of thePledged Collateral regardless of notice of sale having been given.  The Administrative Agent may adjourn anypublic or private sale from time-to-time by announcement at the time and placefixed therefor, and such sale may, without further notice, be made at the timeand place to which it was so adjourned. Each Pledgor shall fully cooperate with Administrative Agent in sellingor realizing upon all or any part of the Pledged Collateral.  In addition, each Pledgor shall fully complywith the securities laws of the United States, the State of Texas, and otherstates and take such actions as may be necessary to permit Administrative Agentto sell or otherwise dispose of any securities representing the PledgedCollateral 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 in thename of such Pledgor, and, in the Administrative Agent’s discretion, to takeany action and to execute any instrument which the Administrative Agent maydeem 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 such requestneed be given after the occurrence and during the continuance of any Event ofDefault and after notice thereof by the Administrative Agent to the affectedPledgor) and the Administrative Agent may from time-to-time take any otheraction 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 powers conferredon the Administrative Agent hereunder are solely to protect its interest in thePledged Collateral and shall not impose any duty on it to exercise any suchpowers.  Except for reasonable care ofany Pledged Collateral in its possession and the accounting for moneys actuallyreceived by it hereunder, the Administrative Agent shall have no duty as to anyPledged Collateral or responsibility for taking any necessary steps to preserverights against prior parties or any other rights pertaining to any PledgedCollateral.

 

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, the AdministrativeAgent, 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 securityinterest, any payments on the Secured Obligations previously made must bedisgorged by any Secured Party for any reason whatsoever, including, withoutlimitation, the insolvency, bankruptcy or reorganization of any Pledgor or anyother Person, this Pledge Agreement and the Administrative Agent’s securityinterests herein 

 

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shall be reinstated as toall disgorged payments as though such payments had not been made, and eachPledgor shall sign and deliver to the Administrative Agent all documents, andshall do such other acts and things, as may be necessary to reinstate andperfect the Administrative Agent’s security interest.  **EACHPLEDGOR SHALL DEFEND AND INDEMNIFY 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 originallynamed as a Pledgor herein.  The executionand delivery of any instrument adding an additional Pledgor as a party to thisPledge Agreement shall not require the consent of any other Pledgorhereunder.  The rights and obligations ofeach Pledgor hereunder shall remain in full force and effect notwithstandingthe addition of any 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 December 17, 2008 (as amended,restated, supplemented or otherwise modified from time to time, the “Subordinationand ***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 thisPledge Agreement, the terms of the Subordination and Intercreditor Agreementshall govern 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

----

 

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

 

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

 

[SIGNATURE PAGES FOLLOW]

 

12

----

 

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

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

 

SignaturePage to Subordinated Pledge Agreement

 

----

 
|   | **ADMINISTRATIVE  AGENT:**               |
|--------|------------------------------------------|
|   | ** **                               |
|   | UNIONBANCAL EQUITIES, INC., as           |
|   | Administrative Agent                     |
|   |                                     |
|   |                                     |
|   | By:                                      |   Ted A. McNulty |
|   |                                     |   Ted A. McNulty |
|   |                                     |   Senior Vice President |
|   |                                     |
|   |                                     |
|   | By:                                      |   /s/ Derrick Pan |
|   | Name:     Derrick Pan     |
|   | Title:     Vice President |
|        |                                          |  |  |

 

Signature Page toSubordinated Pledge Agreement

 

----

 

**SCHEDULE2.02(a)**

 

**PLEDGEDCOLLATERAL**

 

Attached toand forming a part of that certain Subordinated Pledge Agreement dated December 17,2008 by Cano Petroleum, Inc., W.O. Energy of Nevada, Inc., and WOEnergy, Inc., as Pledgors, to UnionBanCal Equities, Inc., as theAdministrative Agent.

 
| **Pledgor** | ** ** | **Issuer** | ** ** | **Type of Membership   Interest** | ** ** | **% of Membership Interest   Owned** |
|-------------|------------|------------|------------|--------------------------------------------------|------------|----------------------------------------------------------|
| None        |       |       |       |                                             |       |                                                     |

 

Schedule 2.02(a) to Subordinated Pledge Agreement

 

----

####  

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

####  

**PLEDGED COLLATERAL**

 

Attached toand forming a part of that certain Subordinated Pledge Agreement dated December 17,2008 by Cano Petroleum, Inc., W.O. Energy of Nevada, Inc., and WOEnergy, Inc., as Pledgors, to UnionBanCal Equities, Inc., as theAdministrative 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(b) to Subordinated Pledge Agreement

 

----

####  

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

####  

**PLEDGED COLLATERAL**

 

Attached toand forming a part of that certain Subordinated Pledge Agreement dated December 17,2008 by Cano Petroleum, Inc., W.O. Energy of Nevada, Inc., and WOEnergy, Inc., as Pledgors, to UnionBanCal Equities, Inc., as theAdministrative 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                    |       |

 

Schedule2.02(c) to Subordinated Pledge Agreement

 

----

 

**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            |

 

Schedule3 to Subordinated Pledge Agreement

 

----

 
| **Organizational Number:**             |   | C20757-1996-001 |
|----------------------------------------|--------|-----------------|
| ** **                             |   |            |
| **Federal Tax Identification Number:** |   | 88-0369151      |
| ** **                             |   |            |
| **Prior Names:**                       |   | None.           |

 

----

 

Annex 1 to the

Subordinated Pledge Agreement

 

SUPPLEMENTNO. [            ]  dated as of[               ](the “Supplement”), to the Subordinated Pledge Agreement dated as of December 17,2008 (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.                                   Referenceis made to that certain Subordinated Credit Agreement dated as of December 17,2008 (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.                                     ThePledgors have entered into the Pledge Agreement in order to induce the Lendersto make the Advances under the Credit Agreement.  Pursuant to Section 6.15 of the CreditAgreement, each Subsidiary of the Borrower that was not in existence on thedate of the respective Master Debt Agreement is required to enter into thePledge Agreement as a Pledgor upon becoming a Subsidiary.  Section 7.12 of the Pledge Agreementprovides that additional Subsidiaries of the Borrower may become Pledgors underthe Pledge Agreement by execution and delivery of an instrument in the form ofthis Supplement.  The undersignedSubsidiary of the Borrower (the “New Pledgor”) is executing thisSupplement in accordance with the requirements of the Senior Credit Agreementto become a Pledgor under the Pledge Agreement.

 

C.                                     Capitalizedterms used herein and not otherwise defined herein shall have the meaningsassigned to such terms in the Pledge Agreement and the Credit Agreement.

 

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

 

SECTION 1.                                Inaccordance with Section 7.12 of the Pledge Agreement, the New Pledgor byits signature below becomes a Pledgor under the Pledge Agreement with the sameforce and effect as if originally named therein as a Pledgor and the NewPledgor hereby agrees (a) to all the terms and provisions of the PledgeAgreement applicable to it as a Pledgor thereunder and (b) represents andwarrants that the representations and warranties made by it as a Pledgorthereunder are true and correct on and as of the date hereof in all materialrespects.  In furtherance of theforegoing, the New Pledgor, as security for the payment and performance in fullof the Secured Obligations, does hereby create and grant to the AdministrativeAgent, its successors and assigns, for the benefit of the Secured Parties,their successors and assigns, a continuing security interest in and lien on allof the New Pledgor’s right, title and interest in and to the Pledged Collateralof the New Pledgor.  Each reference to a “Pledgor”in the Pledge Agreement shall be deemed to include the New Pledgor.  The Pledge Agreement is hereby incorporatedherein by reference.

 

Annex 1 to Subordinated Pledge Agreement

 

----

 

SECTION 2.                                TheNew Pledgor represents and warrants to the Administrative Agent and the otherSecured Parties that this Supplement has been duly authorized, executed anddelivered by it and constitutes its legal, valid and binding obligation,enforceable against it in accordance with its terms (subject to applicable bankruptcy,reorganization, insolvency, moratorium or similar laws affecting creditors’rights generally and subject, as to enforceability, to equitable principles ofgeneral application (regardless of whether enforcement is sought in aproceeding in equity or at law)).

 

SECTION 3.                                ThisSupplement may be executed in counterparts, each of which shall constitute anoriginal, but all of which when taken together shall constitute a singlecontract.  This Supplement shall becomeeffective when the Administrative Agent shall have received counterparts ofthis Supplement that, when taken together, bear the signatures of the NewPledgor and the Administrative Agent. Delivery of an executed signature page to this Supplement byfacsimile transmission shall be as effective as delivery of a manually signedcounterpart of this Supplement.

 

SECTION 4.                                TheNew Pledgor hereby represents and warrants that (a) set forth on Schedules2.02(a), 2.02(b), and 2.02(c) attached hereto are true and correctschedules of all its Membership Interests, Partnership Interests and PledgedShares, as each term is defined in the Pledge Agreement, and (b) set forthon Schedule 3 attached hereto are its sole jurisdiction of formation, type oforganization, its federal tax identification number and the organizationalnumber, and all names used by it during the last five years prior to the dateof this Supplement.

 

SECTION 5.                                Exceptas expressly supplemented hereby, the Pledge Agreement shall remain in fullforce and effect.

 

SECTION 6.                                THISSUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITHTHE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT THAT THE VALIDITY ORPERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR REMEDIES HEREUNDER, INRESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF AJURISDICTION OTHER THAN THE STATE OF TEXAS.

 

SECTION 7.                                Incase any one or more of the provisions contained in this Supplement should beheld invalid, illegal or unenforceable in any respect, neither party heretoshall be required to comply with such provision for so long as such provisionis held to be invalid, illegal or unenforceable, but the validity, legality andenforceability of the remaining provisions contained herein and in the PledgeAgreement shall not in any way be affected or impaired.  The parties hereto shall endeavor ingood-faith negotiations to replace the invalid, illegal or unenforceableprovisions with valid provisions the economic effect of which comes as close aspossible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 8.                                Allcommunications and notices hereunder shall be in writing and given as providedin the Pledge Agreement.  Allcommunications and notices hereunder to the New Pledgor shall be given to it atthe address set forth under its signature hereto.

 

----

 

SECTION 9.                                TheNew Pledgor agrees to reimburse the Administrative Agent for its reasonableout-of-pocket expenses in connection with this Supplement, including thereasonable fees, other charges and disbursements of counsel for theAdministrative 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 ORAL AGREEMENTSOF THE PARTIES.**

 

**THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONGTHE PARTIES HERETO.**

 

[SIGNATURES PAGES FOLLOW]

 

----

 

IN WITNESS WHEREOF, the New Pledgor and the Administrative Agent haveduly executed this Supplement to the Pledge Agreement as of the day and yearfirst above written.

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

 

----

 

Schedules

Supplement No.     

to the 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** |
|------------|------------|----------------------------------|------------|--------------------------------------|
|       |       |                             |       |                                 |

####  

#### SCHEDULE 2.02(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:                             |   |

 

----