Exhibit 10.3


 


SECOND LIEN GUARANTEE AND PLEDGE AGREEMENT




made by


 


Kodiak Oil & Gas Corp.


 


in favor of




WELLS FARGO ENERGY CAPITAL, INC.,


 


as Administrative Agent


 


Dated as of November 30, 2010


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
  Section 1.02

  	
  Other
  Definitional Provisions; References

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  GUARANTEE

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Guarantee

  	
  3

  
	
  Section 2.02

  	
  Payments

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  GRANT
  OF SECURITY INTEREST

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Grant
  of Security Interest

  	
  4

  
	
  Section 3.02

  	
  Transfer
  of Pledged Securities

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  ACKNOWLEDGMENTS,
  WAIVERS AND CONSENTS

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Acknowledgments,
  Waivers and Consents

  	
  4

  
	
  Section 4.02

  	
  No
  Subrogation, Contribution or Reimbursement

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Representations
  in Credit Agreement

  	
  8

  
	
  Section 5.02

  	
  Benefit
  to the Guarantor

  	
  8

  
	
  Section 5.03

  	
  Solvency

  	
  8

  
	
  Section 5.04

  	
  Title;
  No Other Liens

  	
  8

  
	
  Section 5.05

  	
  Perfected
  Second Priority Liens

  	
  8

  
	
  Section 5.06

  	
  Legal
  Name, Organizational Status, Chief Executive Office

  	
  9

  
	
  Section 5.07

  	
  Prior
  Names, Addresses, Locations of Tangible Assets

  	
  9

  
	
  Section 5.08

  	
  Pledged
  Securities

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  COVENANTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Covenants
  in Credit Agreement

  	
  9

  
	
  Section 6.02

  	
  Maintenance
  of Perfected Security Interest; Further Documentation

  	
  9

  
	
  Section 6.03

  	
  Changes
  in Locations, Name, etc

  	
  10

  
	
  Section 6.04

  	
  Pledged
  Securities

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  REMEDIAL
  PROVISIONS

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Pledged
  Securities

  	
  11

  
	
  Section 7.02

  	
  Colorado
  UCC and Other Remedies

  	
  12

  
	
  Section 7.03

  	
  Private
  Sales of Pledged Securities

  	
  14

  
	
  Section 7.04

  	
  Waiver;
  Deficiency

  	
  14

  
	
  Section 7.05

  	
  Non-Judicial
  Enforcement

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  THE
  ADMINISTRATIVE AGENT

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 8.01

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

  	
  14

  
	
  Section 8.02

  	
  Duty
  of Administrative Agent

  	
  16

  
	
  Section 8.03

  	
  Execution
  of Financing Statements

  	
  16

  
	
  Section 8.04

  	
  Authority
  of Administrative Agent

  	
  17

  
				



 


i

















 


TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  SUBORDINATION
  OF INDEBTEDNESS

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Subordination
  of All Guarantor Claims

  	
  17

  
	
  Section 9.02

  	
  Claims
  in Bankruptcy

  	
  17

  
	
  Section 9.03

  	
  Payments
  Held in Trust

  	
  18

  
	
  Section 9.04

  	
  Liens
  Subordinate

  	
  18

  
	
  Section 9.05

  	
  Notation
  of Records

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Waiver

  	
  18

  
	
  Section 10.02

  	
  Notices

  	
  19

  
	
  Section 10.03

  	
  Payment
  of Expenses, Indemnities, Etc.

  	
  19

  
	
  Section 10.04

  	
  Amendments
  in Writing

  	
  19

  
	
  Section 10.05

  	
  Successors
  and Assigns

  	
  19

  
	
  Section 10.06

  	
  Invalidity

  	
  20

  
	
  Section 10.07

  	
  Counterparts

  	
  20

  
	
  Section 10.08

  	
  Survival

  	
  20

  
	
  Section 10.09

  	
  Captions

  	
  20

  
	
  Section 10.10

  	
  No
  Oral Agreements

  	
  20

  
	
  Section 10.11

  	
  Governing
  Law; Submission to Jurisdiction

  	
  20

  
	
  Section 10.12

  	
  Acknowledgments

  	
  21

  
	
  Section 10.13

  	
  Set-Off

  	
  22

  
	
  Section 10.14

  	
  Releases

  	
  22

  
	
  Section 10.15

  	
  Reinstatement

  	
  23

  
	
  Section 10.16

  	
  Acceptance

  	
  23

  
	
  Section 10.17

  	
  Intercreditor
  Agreement

  	
  23

  
	
  SCHEDULES:

  	
   

  	
   

  
	
  1.

  	
  Notice
  Address of Guarantor

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Description
  of Pledged Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Filings
  and Other Actions Required to Perfect Security Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Legal
  Name, Location of Jurisdiction of Organization, Organizational Identification
  Number, Taxpayor Identification Number and Chief Executive Office

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Prior
  Names and Prior Chief Executive Office

  	
   

  
					



 


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This
SECOND LIEN GUARANTEE AND PLEDGE AGREEMENT, dated as of November 30, 2010,
is made by KODIAK OIL & GAS CORP., a corporation continued under the
laws of Yukon Territories, Canada, (the “Guarantor”), in favor of WELLS
FARGO ENERGY CAPITAL, INC., as administrative agent (in such capacity,
together with its successors in such capacity, the “Administrative Agent”),
for the banks and other financial institutions (the “Lenders”) from time
to time parties to that certain Second Lien Credit Agreement, dated as of even
date herewith (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the Lenders, the
Administrative Agent, and the other Agents party thereto.


 


NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, the Guarantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders and the other Secured Parties, as follows:


 


ARTICLE I

Definitions


 


Section 1.01                                Definitions.


 


(a)                                  As used in this
Agreement, each term defined above shall have the meaning indicated above.  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and all uncapitalized terms which are defined
in the Colorado UCC on the date hereof are used herein as so defined.


 


(b)                                 The following
terms shall have the following meanings:


 


“Agreement”
shall mean this Guarantee and Pledge Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.


 


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


 


“Colorado
UCC” shall mean the Uniform Commercial Code, as it may be amended, from
time to time in effect in the State of Colorado.


 


“Discharge
of First Lien Obligations” shall have the meaning assigned to such term in
the Intercreditor Agreement.


 


“First
Lien Administrative Agent” has the meaning assigned to such term in the
Intercreditor Agreement.


 


“First
Lien Guarantee and Pledge Agreement” means that certain Guarantee and
Collateral Agreement, dated as of May 24, 2010, made by the Grantor party
thereto in favor of First Lien Administrative Agent.


 

















 


“First
Lien Obligations” has the meaning assigned to such term in the
Intercreditor Agreement.


 


“Intercreditor
Agreement” shall have the meaning assigned to such term in Section 10.17.


 


“Issuers”
shall mean, collectively, each issuer of a Pledged Security.


 


“Obligations”
shall mean, collectively, all Indebtedness, liabilities and obligations of the
Borrower and its Subsidiaries to the Secured Parties, of whatsoever nature and
howsoever evidenced, due or to become due, now existing or hereafter arising,
whether direct or indirect, absolute or contingent, which may arise under, out
of, or in connection with the Credit Agreement, the other Loan Documents and
all other agreements, guarantees, notes and other documents entered into by any
party in connection therewith, and any amendment, restatement or modification
of any of the foregoing, including, but not limited to, the full and punctual
payment when due of any unpaid principal of the Loans, interest (including,
without limitation, interest accruing at any post-default rate and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), fees,
reimbursement obligations, guaranty obligations, penalties, indemnities, legal
and other fees, charges and expenses, and amounts advanced by and expenses
incurred in order to preserve any collateral or security interest, whether due
after acceleration or otherwise.


 


“Pledged
Securities” shall mean: (i) the equity interests described or referred
to in Schedule 2; and (ii) (a) the certificates or instruments, if
any, representing such equity interests, (b) all dividends (cash, stock or
otherwise), cash, instruments, rights to subscribe, purchase or sell and all
other rights and property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such equity
interests, (c) all replacements, additions to and substitutions for any of
the property referred to in this definition, including, without limitation,
claims against third parties, (d) the proceeds, interest, profits and other
income of or on any of the property referred to in this definition and (e) all
books and records relating to any of the property referred to in this
definition.


 


“Secured
Parties” shall mean, collectively, the Administrative Agent and the
Lenders.


 


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


 


“Senior
Secured Parties” shall mean, collectively, the First Lien Administrative
Agent, the Issuing Bank (as defined in the Senior Revolving Credit Agreement),
the Senior Lenders, and any Senior Lender or Affiliate of a Senior Lender that
is a party to a Permitted Hedging Agreement (as defined in the Senior Revolving
Credit Agreement) and those counterparties to Permitted Hedging Agreements that
were entered into while such Person or its Affiliate was a Senior Lender,
regardless of whether such Person is a Senior Lender or an Affiliate
thereafter.


 


Section 1.02                                Other
Definitional Provisions; References.  The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.  The gender of all words shall
include the masculine, feminine, and neuter, as appropriate.  The words “herein,” “hereof,” “hereunder” and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or 


 


2

















 


subsection. 
Any reference herein to a Section shall be deemed to refer to the
applicable Section of this Agreement unless otherwise stated herein.  Any reference herein to an exhibit, schedule
or annex shall be deemed to refer to the applicable exhibit, schedule or annex
attached hereto unless otherwise stated herein.


 


ARTICLE II

Guarantee


 


Section 2.01                                Guarantee.


 


(a)                                  The Guarantor
hereby unconditionally and irrevocably guarantees to the Administrative Agent,
for the ratable benefit of the Secured Parties and each of their respective
successors, endorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower and its Subsidiaries when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations.  This is a guarantee of payment and not
collection and the liability of the Guarantor is primary and not secondary.


 


(b)                                 Anything herein
or in any other Loan Document to the contrary notwithstanding, the maximum
liability of the Guarantor hereunder and under the other Loan Documents shall
in no event exceed the amount which can be guaranteed by the Guarantor under
applicable federal and state laws relating to the insolvency of debtors.


 


(c)                                  The Guarantor
agrees that the Obligations may at any time and from time to time exceed the
amount of the liability of the Guarantor hereunder without impairing the
guarantee contained in this Article II or affecting the rights and
remedies of the Administrative Agent or any Secured Party hereunder.


 


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


 


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


 


3
















 


Section 2.02                                Payments.  The Guarantor hereby agrees and guarantees
that payments hereunder will be paid to the Administrative Agent without
set-off or counterclaim in United States dollars at the Administrative Agent’s
principal office in Denver, Colorado.


 


ARTICLE III

Grant of Security Interest


 


Section 3.01                                Grant of
Security Interest.  The
Guarantor hereby pledges, assigns and transfers to the Administrative Agent,
and grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a security interest in all of the following property now owned or at
any time hereafter acquired by the Guarantor or in which the Guarantor now has
or at any time in the future may acquire any right, title or interest and
whether now existing or hereafter coming into existence (collectively, the “Collateral”),
as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations:


 


(1)                                  all Pledged
Securities;


 


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


 


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


 


Section 3.02                                Transfer of
Pledged Securities.  All
certificates and instruments representing or evidencing the Pledged Securities
shall be delivered to and held pursuant hereto by the First Lien Administrative
Agent or a Person designated by the First Lien Administrative Agent, in either
case, which shall act as the Administrative Agent’s bailee and agent in
accordance with the terms of the Intercreditor Agreement, and, in the case of
an instrument or certificate in registered form, shall be duly indorsed to the
First Lien Administrative Agent or in blank by an effective indorsement
(whether on the certificate or instrument or on a separate writing), and
accompanied by any required transfer tax stamps to effect the pledge of the
Pledged Securities to the First Lien Administrative Agent.  As required by and in compliance with the
Intercreditor Agreement, upon the Discharge of First Lien Obligations, (i) the
First Lien Administrative Agent shall transfer the possession and control of
all certificates and instruments representing or evidencing the Pledged
Securities, together with any necessary endorsements but without recourse or
warranty, and (ii) all Pledged Securities must be delivered or transferred
in such manner, and the Guarantor shall take all such further action as may be
requested by the Administrative Agent, as to permit the Administrative Agent to
be a “protected purchaser” to the extent of its security interest as provided
in Section 8-303 of the Colorado UCC (if the Administrative Agent
otherwise qualifies as a protected purchaser).


 


ARTICLE IV

Acknowledgments, Waivers and Consents


 


Section 4.01                                Acknowledgments,
Waivers and Consents.


 


4

















 


(a)                                  The Guarantor
acknowledges and agrees that the obligations undertaken by it under this
Agreement involve the guarantee and provision of collateral security for the
obligations of Persons other than the Guarantor and that the Guarantor’s
guarantee and provision of collateral security for the Obligations are
absolute, irrevocable and unconditional under any and all circumstances.  In full recognition and furtherance of the
foregoing, the Guarantor understands and agrees, to the fullest extent
permitted under applicable law and except as may otherwise be expressly and
specifically provided in the Loan Documents, that the Guarantor  shall remain obligated hereunder (including,
without limitation, with respect to the guarantee by the Guarantor hereby and
the collateral security provided by the Guarantor herein) and the
enforceability and effectiveness of this Agreement and the liability of the
Guarantor, and the rights, remedies, powers and privileges of the
Administrative Agent and the other Secured Parties under this Agreement and the
other Loan Documents shall not be affected, limited, reduced, discharged or
terminated in any way:


 


(b)                                 notwithstanding
that, without any reservation of rights against the Guarantor and without
notice to or further assent by the Guarantor, (A) any demand for payment
of any of the Obligations made by the Administrative Agent or any other Secured
Party may be rescinded by the Administrative Agent or such other Secured Party
and any of the Obligations continued; (B) the Obligations, the liability
of any other Person upon or for any part thereof or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by, or any indulgence
or forbearance in respect thereof granted by, the Administrative Agent or any
other Secured Party; (C) the Credit Agreement, the other Loan Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Majority Lenders or all Lenders, as the case may
be) may deem advisable from time to time; (D) the Borrower, its
Subsidiaries or any other Person may from time to time accept or enter into new
or additional agreements, security documents, guarantees or other instruments
in addition to, in exchange for or relative to, any Loan Document, all or any
part of the Obligations or any Collateral now or in the future serving as
security for the Obligations; (E) any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any other
Secured Party for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released; and (F) any other event shall occur which
constitutes a defense or release of sureties generally; and


 


(c)                                  without regard
to, and the Guarantor hereby expressly waives to the fullest extent permitted
by law any defense now or in the future arising by reason of, (A) the
illegality, invalidity or unenforceability of the Credit Agreement, any other
Loan Document, any of the Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time
to time held by the Administrative Agent or any other Secured Party, (B) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Guarantor or any other Person against the Administrative Agent or any other
Secured Party, (C) the insolvency, bankruptcy arrangement, reorganization,
adjustment, composition, liquidation, disability, dissolution or lack of power
of the Guarantor or any other Person at any time liable for the payment of all
or part of the Obligations or the failure of the Administrative Agent or any
other Secured Party to file or enforce a claim in bankruptcy or other
proceeding with respect to any Person; or any sale, lease 


 


5

















 


or transfer of any or all of the assets of the
Guarantor, or any changes in the shareholders of the Guarantor; (D) the
fact that any Collateral or Lien contemplated or intended to be given, created
or granted as security for the repayment of the Obligations shall not be
properly perfected or created, or shall prove to be unenforceable or
subordinate to any other Lien, it being recognized and agreed by the Guarantor
that it is not entering into this Agreement in reliance on, or in contemplation
of the benefits of, the validity, enforceability, collectability or value of
any of the Collateral for the Obligations; (E) any failure of the
Administrative Agent or any other Secured Party to marshal assets in favor of
the Guarantor or any other Person, to exhaust any collateral for all or any
part of the Obligations, to pursue or exhaust any right, remedy, power or
privilege it may have against the Guarantor or any other Person or to take any
action whatsoever to mitigate or reduce the Guarantor’s liability under this
Agreement or any other Loan Document; (F) any law which provides that the
obligation of a surety or guarantor must neither be larger in amount nor in
other respects more burdensome than that of the principal or which reduces a
surety’s or guarantor’s obligation in proportion to the principal obligation; (G) the
possibility that the Obligations may at any time and from time to time exceed
the aggregate liability of the Guarantor under this Agreement; or (H) any
other circumstance or act whatsoever (with or without notice to or knowledge of
the Guarantor), which constitutes, or might be construed to constitute, an
equitable or legal discharge or defense of the Borrower for the Obligations, or
of the Guarantor under the guarantee contained in Article II or with
respect to the collateral security provided by the Guarantor herein, or which
might be available to a surety or guarantor, in bankruptcy or in any other
instance.


 


(d)                                 The Guarantor
hereby waives to the extent permitted by law: 
(i) except as expressly provided otherwise in any Loan Document,
all notices to the Guarantor, or to any other Person, including but not limited
to, notices of the acceptance of this Agreement, the guarantee contained in Article II
or the provision of collateral security provided herein, or the creation,
renewal, extension, modification, accrual of any Obligations, or notice of or
proof of reliance by the Administrative Agent or any other Secured Party upon
the guarantee contained in Article II or upon the collateral security
provided herein, or of default in the payment or performance of any of the
Obligations owed to the Administrative Agent or any other Secured Party and
enforcement of any right or remedy with respect thereto; or notice of any other
matters relating thereto; the Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in Article II
and the collateral security provided herein and no notice of creation of the
Obligations or any extension of credit already or hereafter contracted by or
extended to the Borrower need be given to the Guarantor; and all dealings
between the Borrower and the Guarantor, on the one hand, and the Administrative
Agent and the other Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in Article II and on the collateral security provided
herein; (ii) diligence and demand of payment, presentment, protest,
dishonor and notice of dishonor; (iii) any statute of limitations
affecting the Guarantor’s liability hereunder or the enforcement thereof; (iv) all
rights of revocation with respect to the Obligations, the guarantee contained
in Article II and the provision of collateral security herein; and (v) all
principles or provisions of law which conflict with the terms of this Agreement
and which can, as a matter of law, be waived.


 


(e)                                  When making any
demand hereunder or otherwise pursuing its rights and remedies hereunder
against the Guarantor, the Administrative Agent or any other Secured Party 


 


6

















 


may, but shall be under no obligation to, join or
make a similar demand on or otherwise pursue or exhaust such rights and
remedies as it may have against the Borrower or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any other
Secured Party to make any such demand, to pursue such other rights or remedies
or to collect any payments from the Borrower or any other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any other Secured Party against
the Guarantor.  For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.  Neither the Administrative Agent nor any
other Secured Party shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
the guarantee contained in Article II or any property subject thereto.


 


Section 4.02                                No Subrogation,
Contribution or Reimbursement.  Notwithstanding any payment made by the
Guarantor hereunder or any set-off or application of funds of the Guarantor by
the Administrative Agent or any other Secured Party, the Guarantor shall not be
entitled to be subrogated to any of the rights of the Administrative Agent or
any other Secured Party against the Borrower or any collateral security or
guarantee or right of offset held by the Administrative Agent or any other
Secured Party for the payment of the Obligations, nor shall the Guarantor seek
or be entitled to seek any indemnity, exoneration, participation, contribution
or reimbursement from the Borrower in respect of payments made by the Guarantor
hereunder, and the Guarantor hereby expressly waives, releases, and agrees not
to exercise any all such rights of subrogation, reimbursement, indemnity and
contribution.  The Guarantor further
agrees that to the extent that such waiver and release set forth herein is
found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement, indemnity and contribution
the Guarantor may have against the Borrower or against any collateral or
security or guarantee or right of offset held by the Administrative Agent or
any other Secured Party shall be junior and subordinate to any rights the
Administrative Agent and the other Secured Parties may have against the
Borrower and the Guarantor and to all right, title and interest the
Administrative Agent and the other Secured Parties may have in any collateral
or security or guarantee or right of offset. 
The Administrative Agent, for the benefit of the Secured Parties, may
use, sell or dispose of any item of Collateral or security as it sees fit
without regard to any subrogation rights the Guarantor may have, and upon any
disposition or sale, any rights of subrogation the Guarantor may have shall
terminate.


 


ARTICLE V

Representations and Warranties


 


To
induce the Administrative Agent and the other Secured Parties to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, the Guarantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that:


 


7

















 


Section 5.01                                Representations
in Credit Agreement.  The
representations and warranties set forth in Article VII of the Credit
Agreement as they relate to the Guarantor or to the Loan Documents to which the
Guarantor is a party are true and correct in all material respects, provided
that each reference in each such representation and warranty to the Borrower’s
knowledge shall, for the purposes of this Section 5.01, be deemed to be a
reference to the Guarantor’s knowledge.


 


Section 5.02                                Benefit to the
Guarantor.  The
Borrower is a member of an affiliated group of companies that includes the
Guarantor, and the Borrower and the Guarantor are engaged in related
businesses.  The Guarantor is the parent
of the Borrower and its guaranty and surety obligations pursuant to this
Agreement reasonably may be expected to benefit, directly or indirectly, it;
and it has determined that this Agreement is necessary and convenient to the
conduct, promotion and attainment of the business of the Guarantor and the
Borrower.


 


Section 5.03                                Solvency.  The Guarantor (i) is not insolvent as of
the date hereof and will not be rendered insolvent as a result of this Agreement
(after giving effect to Section 2.01(a)), (ii) is not engaged in a
business or a transaction, or about to engage in a business or a transaction,
for which any Property or assets remaining with it constitute unreasonably
small capital, and (iii) does not intend to incur, or believe it will
incur, debts that will be beyond its ability to pay as such debts mature.


 


Section 5.04                                Title; No Other
Liens.  Except for the security
interest granted to the Administrative Agent for the ratable benefit of the
Secured Parties pursuant to this Agreement and Excepted Liens, the Guarantor is
the legal and beneficial owner of the Collateral free and clear of any and all
Liens.  No financing statement or other
public notice with respect to all or any part of the Collateral is on file or
of record in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement, the Security Instruments or as are filed to secure Liens
permitted by Section 9.03 of the Credit Agreement.


 


Section 5.05                                Perfected
Second Priority Liens.  The
security interests granted pursuant to this Agreement (a) upon completion
of the filings and other actions specified on Schedule 3 (which, in the case of
all filings and other documents referred to on said Schedule, have been
delivered to the Administrative Agent in completed and duly executed form),
will constitute valid perfected security interests in all of the Collateral in
favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, as collateral security for the Guarantor’s obligations, enforceable in
accordance with the terms hereof against all creditors of the Guarantor (except
for the First Lien Administrative Agent and the Senior Lenders prior to the
Discharge of First Lien Obligations) and any Persons purporting to purchase any
Collateral from the Guarantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for Liens granted in
connection with the Senior Revolving Credit Documents and Excepted Liens which
have priority over the Liens on the Collateral by operation of law.  No effective financing statement or other
registration or instrument similar in effect covering any Collateral is on file
in any recording office except any that has been filed in favor of the Senior
Administrative Agent or the Senior Lenders in connection with the Senior
Revolving Credit Documents, those in favor of the Secured Parties relating to
this Agreement and any that has been filed to perfect or protect any Excepted
Lien.


 


8

















 


Section 5.06                                Legal Name,
Organizational Status, Chief Executive Office.  On the date hereof, the correct legal name of
the Guarantor, the Guarantor’s jurisdiction of organization, organizational
number, taxpayor identification number and the location of the Guarantor’s
chief executive office or sole place of business are specified on Schedule 4.


 


Section 5.07                                Prior Names,
Addresses, Locations of Tangible Assets.  Schedule 5 correctly sets forth (a) all
names and trade names that the Guarantor has used in the last five years and (b) the
chief executive office of the Guarantor over the last five years (if different
from that which is set forth in Section 5.06 above).


 


Section 5.08                                Pledged
Securities.  The shares
(or such other interests) of Pledged Securities pledged by the Guarantor
hereunder constitute all the issued and outstanding shares (or such other
interests) of all classes of the capital stock or other equity interests of
each Issuer owned by the Guarantor.  All
the shares (or such other interests) of the Pledged Securities have been duly
authorized and validly issued and are fully paid and nonassessable; and the
Guarantor is the record and beneficial owner of, and has good title to, the
Pledged Securities pledged by it hereunder, free of any and all Liens except
Excepted Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement or any other Security
Instrument, Liens on Property securing the Debt under the Senior Revolving
Credit Documents, and Excepted Liens.


 


ARTICLE VI

Covenants


 


The
Guarantor covenants and agrees with the Administrative Agent and the other
Secured Parties that, from and after the date of this Agreement until the
Obligations shall have been paid in full and the total Commitments shall have
terminated:


 


Section 6.01                                Covenants in
Credit Agreement.  The
Guarantor shall take, or shall refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, so that
no Default or Event of Default is caused by the failure to take such action or
to refrain from taking such action by the Guarantor.


 


Section 6.02                                Maintenance of
Perfected Security Interest; Further Documentation.


 


(a)                                  The Guarantor
shall maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 5.05
and shall, in accordance with the terms of the Intercreditor Agreement, defend
such security interest against the claims and demands of all Persons whomsoever
except for Excepted Liens.


 


(b)                                 At any time and
from time to time, upon the request of the Administrative Agent or any other
Secured Party, and at the sole expense of the Guarantor, the Guarantor will
promptly and duly give, execute, deliver, indorse, file or record any and all
financing statements, continuation statements, amendments, notices (including,
without limitation, notifications to financial institutions and any other
Person), contracts, agreements, assignments, certificates, stock powers or
other instruments, obtain any and all governmental approvals and consents and
take or cause to be taken any and all steps or acts that may be necessary or
advisable or as the Administrative Agent may reasonably request to create,
perfect, establish the priority of, or to 


 


9

















 


preserve the validity, perfection or priority of,
the Liens granted by this Agreement or to enable the Administrative Agent or
any other Secured Party to enforce its rights, remedies, powers and privileges
under this Agreement with respect to such Liens or to otherwise obtain or
preserve the full benefits of this Agreement and the rights, powers and
privileges herein granted.


 


(c)                                  This Section 6.02
and the obligations imposed on the Guarantor by this Section 6.02 shall be
interpreted as broadly as possible in favor of the Administrative Agent and the
other Secured Parties in order to effectuate the purpose and intent of this
Agreement.


 


Section 6.03                                Changes in
Locations, Name, etc.


 


The
Guarantor recognizes that financing statements pertaining to the Collateral
have been or may be filed where the Guarantor maintains any Collateral or is
organized.  Without limitation of any
other covenant herein, the Guarantor will not cause or permit (a) any
change to be made in its name, identity or corporate structure or (b) the
Guarantor’s jurisdiction of organization, unless the Guarantor shall have first
(i) notified the Administrative Agent and the other Secured Parties of
such change at least thirty (30) days prior to the effective date of such
change, and (ii) taken all action reasonably requested by the
Administrative Agent or any other Secured Party for the purpose of maintaining
the perfection and priority of the Administrative Agent’s security interests
under this Agreement.  In any notice
furnished pursuant to this Section 6.03, the Guarantor will expressly
state in a conspicuous manner that the notice is required by this Agreement and
contains facts that may require additional filings of financing statements or
other notices for the purposes of continuing perfection of the Administrative
Agent’s security interest in the Collateral.


 


Section 6.04                                Pledged
Securities.


 


(a)                                  If the
Guarantor shall become entitled to receive or shall receive any stock
certificate or other instrument (including, without limitation, any certificate
or instrument representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate or
instrument issued in connection with any reorganization), option or rights in
respect of the capital stock or other equity interests of any Issuer, whether
in addition to, in substitution of, as a conversion of, or in exchange for, any
shares (or such other interests) of the Pledged Securities, or otherwise in
respect thereof, the  Guarantor shall
accept the same as the agent of the Administrative Agent and the other Secured
Parties, hold the same in trust for the Administrative Agent and the other
Secured Parties and deliver the same forthwith to the Administrative Agent in
the exact form received, duly indorsed by the Guarantor to the Administrative
Agent, if required, together with an undated stock power or other equivalent
instrument of transfer acceptable to the Administrative Agent covering such
certificate or instrument duly executed in blank by the Guarantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations; provided, however, that if the foregoing occurs
prior to the Discharge of First Lien Obligations, such Grantor shall accept the
same as the agent of the First Lien Administrative Agent (for itself and as
bailee for the Administrative Agent) and the Senior Secured Parties, hold the
same in trust for the First Lien Administrative Agent (for itself and as bailee
for the Administrative Agent) and the Senior Secured Parties and deliver the
same forthwith to the First Lien Administrative Agent, for itself 


 


10

















 


and as bailee for the Administrative Agent, in the
exact form received, duly indorsed by such Grantor to the First Lien
Administrative Agent, if required, together with an undated stock power or
other equivalent instrument of transfer acceptable to the Administrative Agent
covering such certificate or instrument duly executed in blank by such Grantor
and with, if the Administrative Agent so requests, signature guaranteed, to be
held by the First Lien Administrative Agent, for itself and as bailee for the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations.


 


(b)                                 Subject to the
terms of the Intercreditor Agreement, without the prior written consent of the
Administrative Agent, the Guarantor will not (i) unless otherwise
permitted hereby, vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity interests of any nature or to issue
any other securities or interests convertible into or granting the right to
purchase or exchange for any stock or other equity interests of any nature of
any Issuer, (ii) sell, assign, transfer, exchange or otherwise dispose of,
or grant any option with respect to, the Pledged Securities or Proceeds thereof
(except pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien except for Excepted Liens
or option in favor of, or any claim of any Person with respect to, any of the
Pledged Securities or Proceeds thereof, or any interest therein, except for the
security interests created by this Agreement or any other Security Instrument
or Liens on Property securing the Debt under the Senior Revolving Credit
Documents or (iv) enter into any agreement or undertaking restricting the
right or ability of the Guarantor or the Administrative Agent to sell, assign
or transfer any of the Pledged Securities or Proceeds thereof.


 


(c)                                  The Guarantor
shall furnish to the Administrative Agent 
or the First Lien Administrative Agent, as the case may be, such stock
powers and other equivalent instruments of transfer as may be required by the
Administrative Agent to assure the transferability of and the perfection of the
security interest in the Pledged Securities when and as often as may be
reasonably requested by the Administrative Agent.


 


(d)                                 The Pledged
Securities will at all times constitute not less than 100% of the capital stock
or other equity interests of the Issuer thereof owned by the Guarantor.  The Guarantor will not permit any Issuer of
any of the Pledged Securities to issue any new shares (or other interests) of
any class of capital stock or other equity interests of such Issuer without the
prior written consent of the Administrative Agent.


 


ARTICLE VII

Remedial Provisions


 


Section 7.01                                Pledged
Securities.


 


(a)                                  Unless an Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have given notice to the Guarantor of the Administrative Agent’s intent
to exercise its corresponding rights pursuant to Section 7.01(b), the
Guarantor shall be permitted to receive all cash dividends paid in respect of
the Pledged Securities paid in the normal course of business of the relevant
Issuer, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Pledged Securities.


 


11

















 


(b)                                 If an Event of
Default shall occur and be continuing 
(and subject to the Intercreditor Agreement), then at any time in the
Administrative Agent’s discretion without notice, (i) the Administrative
Agent shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Pledged Securities and make application
thereof to the Obligations in accordance with Section 10.02 of the Credit
Agreement, and (ii) any or all of the Pledged Securities shall be
registered in the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise (x) all
voting, corporate and other rights pertaining to such Pledged Securities at any
meeting of shareholders (or other equivalent body) of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange
and subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the organizational structure of any Issuer, or upon
the exercise by the Guarantor or the Administrative Agent of any right,
privilege or option pertaining to such Pledged Securities, and in connection
therewith, the right to deposit and deliver any and all of the Pledged
Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Administrative Agent
may determine), all without liability except to account for property actually
received by it, but the Administrative Agent shall have no duty to the
Guarantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.


 


(c)                                  The Guarantor
hereby authorizes and instructs each Issuer of any Pledged Securities pledged by
the Gurantor hereunder (and each Issuer party hereto hereby agrees) to, upon
the Discharge of First Lien Obligations, (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from the Guarantor, and the Guarantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.


 


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


 


Section 7.02                                Colorado UCC
and Other Remedies.


 


(a)                                  If an Event of
Default shall occur and be continuing, the Administrative Agent, on behalf of
the Secured Parties, may exercise in its discretion, in addition to all other 


 


12

















 


rights, remedies, powers and privileges granted to
them in this Agreement, the other Loan Documents and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights,
remedies, powers and privileges of a secured party under the Colorado UCC
(whether the Colorado UCC is in effect in the jurisdiction where such rights,
remedies, powers or privileges are asserted) or any other applicable law or
otherwise available at law or equity.  Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Guarantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any other Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. 
The Administrative Agent or any other Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Guarantor,
which right or equity is hereby waived and released.  If an Event of Default shall occur and be
continuing, the Guarantor further agrees, at the Administrative Agent’s
request  (subject to the Intercreditor
Agreement), to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at the Guarantor’s premises or elsewhere.  Any such sale or transfer by the Administrative
Agent either to itself or to any other Person shall be absolutely free from any
claim of right by the Guarantor, including any equity or right of redemption,
stay or appraisal which the Guarantor has or may have under any rule of
law, regulation or statute now existing or hereafter adopted.  Upon any such sale or transfer, the
Administrative Agent shall have the right to deliver, assign and transfer to
the purchaser or transferee thereof the Collateral so sold or transferred.  The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 7.02, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the other Secured Parties hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements, to the
payment in whole or in part of the Obligations, in accordance with Section 10.02
of the Credit Agreement, and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615 of the Colorado UCC,
need the Administrative Agent account for the surplus, if any, to the
Guarantor.  To the extent permitted by
applicable law, the Guarantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any other Secured Party arising out
of the exercise by them of any rights hereunder.  If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition.


 


(b)                                 In the event
that the Administrative Agent elects not to sell the Collateral, the
Administrative Agent retains its rights to dispose of or utilize the Collateral
or any part or parts thereof in any manner authorized or permitted by law or in
equity, and to apply the 


 


13

















 


proceeds of the same towards payment of the
Obligations.  Each and every method of
disposition of the Collateral described in this Agreement shall constitute
disposition in a commercially reasonable manner.  The Administrative Agent may appoint any
Person as agent to perform any act or acts necessary or incident to any sale or
transfer of the Collateral.


 


Section 7.03                                Private Sales
of Pledged Securities.  The
Guarantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof.  The Guarantor acknowledges and agrees that
any such private sale may result in prices and other terms less favorable than
if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner.  The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do
so.  The Guarantor agrees to use
commercially reasonable efforts to do or cause to be done all such other acts
as may reasonably be necessary to make such sale or sales of all or any portion
of the Pledged Securities pursuant to this Section 7.03 valid and binding
and in compliance with any and all other applicable Governmental
Requirements.  The Guarantor further
agrees that a breach of any of the covenants contained in this Section 7.03
will cause irreparable injury to the Administrative Agent and the other Secured
Parties, that the Administrative Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 7.03 shall be
specifically enforceable against the Guarantor, and the Guarantor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants.


 


Section 7.04                                Waiver;
Deficiency.  To the
extent permitted by applicable law, the Guarantor waives and agrees not to
assert any rights or privileges which it may acquire under the Colorado UCC or
any other applicable law.  The Guarantor
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay its Obligations and the
fees and disbursements of any attorneys employed by the Administrative Agent or
any other Secured Party to collect such deficiency.


 


Section 7.05                                Non-Judicial
Enforcement.  The
Administrative Agent may enforce its rights hereunder without prior judicial
process or judicial hearing, and to the extent permitted by law, the Guarantor
expressly waives any and all legal rights which might otherwise require the
Administrative Agent to enforce its rights by judicial process.


 


ARTICLE VIII

The Administrative Agent


 


Section 8.01                                Administrative
Agent’s Appointment as Attorney-in-Fact, Etc.


 


14
















 


(a)           The Guarantor hereby
irrevocably constitutes and appoints the Administrative Agent and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Guarantor and in the name of the Guarantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
reasonably appropriate action and to execute any and all documents and
instruments which may be reasonably necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, the Guarantor hereby gives the Administrative Agent the power and
right, on behalf of the Guarantor, without notice to or assent by the
Guarantor, to do any or all of the following:


 


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


 


(ii)           execute, in connection with
any sale provided for in Section 7.02 or Section 7.03, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral; and


 


(iii)          (A) direct any party
liable for any payment under any of the Collateral to make payment of any and
all moneys due or to become due thereunder directly to the Administrative Agent
or as the Administrative Agent shall direct; (B) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral; (C) defend any suit, action or proceeding brought against
the Guarantor with respect to any Collateral; (D) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem appropriate;
and (E) generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent’s option and the Guarantor’s
expense, at any time, or from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s and the other Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as the Guarantor might do.


 


Anything
in this Section 8.01(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 8.01(a) unless an
Event of Default shall have occurred and be continuing and in accordance with
the Intercreditor Agreement.


 


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


 


(c)           The expenses of the
Administrative Agent incurred in connection with actions undertaken as provided
in this Section 8.01, together with interest thereon at the post-default
rate specified in Section 3.02(c) of the Credit Agreement from the
date of payment by the 


 


15

















 


Administrative Agent to the date reimbursed by the
Guarantor, shall be payable by the Guarantor to the Administrative Agent on
demand.


 


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


 


Section 8.02           Duty of Administrative Agent.  The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Colorado UCC or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account and shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which comparable secured parties accord comparable collateral.  Neither the Administrative Agent, any other
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of
the Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of the Guarantor
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.  The
powers conferred on the Administrative Agent and the other Secured Parties
hereunder are solely to protect the Administrative Agent’s and the other
Secured Parties’ interests in the Collateral and shall not impose any duty upon
the Administrative Agent or any other Secured Party to exercise any such
powers.  The Administrative Agent and the
other Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to the
Guarantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.  To the
fullest extent permitted by applicable law, the Administrative Agent shall be
under no duty whatsoever to make or give any presentment, notice of dishonor,
protest, demand for performance, notice of non-performance, notice of intent to
accelerate, notice of acceleration, or other notice or demand in connection
with any Collateral or the Obligations, or to take any steps necessary to
preserve any rights against the Guarantor or other Person or ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not it has or
is deemed to have knowledge of such matters. 
The Guarantor, to the extent permitted by applicable law, waives any
right of marshaling in respect of any and all Collateral, and waives any right
to require the Administrative Agent or any other Secured Party to proceed
against the Guarantor or other Person, exhaust any Collateral or enforce any other
remedy which the Administrative Agent or any other Secured Party now has or may
hereafter have against the Guarantor or other Person.


 


Section 8.03           Execution of Financing
Statements.  Pursuant to
the Colorado UCC and any other applicable law, the Guarantor authorizes the
Administrative Agent, its counsel or its representative, at any time and from
time to time, to file or record financing statements, continuation statements,
amendments thereto and other filing or recording documents or instruments with
respect to the Collateral without the signature of the Guarantor in such form
and in such offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement.  A photographic or other 


 


16

















 


reproduction of this Agreement shall be sufficient
as a financing statement or other filing or recording document or instrument
for filing or recording in any jurisdiction.


 


Section 8.04           Authority of Administrative
Agent.  The Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and Guarantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Guarantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.


 


ARTICLE IX

Subordination of Indebtedness


 


Section 9.01           Subordination of All Guarantor
Claims.  As used herein, the term “Guarantor
Claims” shall mean all debts and obligations of the Borrower to the Guarantor,
whether such debts and obligations now exist or are hereafter incurred or
arise, or whether the obligation of the debtor thereon be direct, contingent,
primary, secondary, several, joint and several, or otherwise, and irrespective
of whether such debts or obligations be evidenced by note, contract, open
account, or otherwise, and irrespective of the Person or Persons in whose favor
such debts or obligations may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by. After and during the continuation of an Event of Default, the Guarantor
shall not receive or collect, directly or indirectly, from any obligor in
respect thereof any amount upon the Guarantor Claims.


 


Section 9.02           Claims in Bankruptcy.  In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief or other insolvency proceedings
involving the Guarantor, the Administrative Agent on behalf of the Secured
Parties shall have the right to prove their claim in any proceeding, so as to
establish their rights hereunder and receive directly from the receiver,
trustee or other court custodian, dividends and payments which would otherwise
be payable upon Guarantor Claims.  The
Guarantor hereby assigns such dividends and payments to the Administrative
Agent for the benefit of the Secured Parties for application against the
Obligations as provided under Section 10.02 of the Credit Agreement.  Should any Agent or Secured Party receive,
for application upon the Obligations, any such dividend or payment which is
otherwise payable to the Guarantor, and which, as between the Guarantor, shall
constitute a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the intended recipient shall become subrogated to the rights of
the Administrative Agent and the other Secured Parties to the extent that such
payments to the Administrative Agent and the other Secured Parties on the
Guarantor Claims have contributed toward the liquidation of the Obligations,
and such subrogation shall be with respect to that proportion of the
Obligations which would have been unpaid if the Administrative Agent and the
other Secured Parties had not received dividends or payments upon the Guarantor
Claims.


 


17

















 


Section 9.03           Payments Held in Trust.  In the event that notwithstanding Section 9.01
and Section 9.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, then it agrees: (a) to
hold in trust prior to the Discharge of First Lien Obligations for the First
Lien Administrative Agent and the Senior Lenders and after the Discharge of
First Lien Obligations for the Administrative Agent and the other Secured
Parties an amount equal to the amount of all funds, payments, claims or
distributions so received, and (b) that it shall have absolutely no
dominion over the amount of such funds, payments, claims or distributions
except to pay them promptly to the First Lien Administrative Agent for the
benefit of the Senior Lenders or to the Administrative Agent, for the benefit
of the Secured Parties (as applicable); and the Guarantor covenants promptly to
pay the same to the First Lien Administrative Agent or the Administrative Agent
(as applicable).


 


Section 9.04           Liens Subordinate.  The Guarantor agrees that, until the
Obligations are paid in full and the total Commitments terminated, any Liens
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any Liens securing payment of the Obligations, regardless of
whether such encumbrances in favor of the Guarantor, the Administrative Agent
or any other Secured Party presently exist or are hereafter created or
attach.  Without the prior written
consent of the Administrative Agent, the Guarantor, during the period in which
any of the Obligations are outstanding or the total Commitments are in effect,
shall not (a) exercise or enforce any creditor’s right it may have against
any debtor in respect of the Guarantor Claims, or (b) foreclose,
repossess, sequester or otherwise take steps or institute any action or
proceeding (judicial or otherwise, including without limitation the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any Lien held by it.


 


Section 9.05           Notation of Records.  Upon the request of the Administrative Agent,
all promissory notes and all accounts receivable ledgers or other evidence of
the Guarantor Claims accepted by or held by the Guarantor shall contain a
specific written notice thereon that the indebtedness evidenced thereby is
subordinated under the terms of this Agreement and the Guarantee and Pledge
Agreement dated as of May 24, 2010, made by the Guarantor in favor of the
First Lien Administrative Agent.


 


ARTICLE X

Miscellaneous


 


Section 10.01         Waiver.  No failure on the part of the Administrative
Agent or any other Secured Party to exercise and no delay in exercising, and no
course of dealing with respect to, any right, remedy, power or privilege under
any of the Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under any of the
Loan Documents preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. 
The rights, remedies, powers and privileges provided herein are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.  The exercise by the
Administrative Agent of any one or more of the rights, powers and remedies
herein shall not be construed as a waiver of any other rights, powers and
remedies, including, without limitation, any rights of set-off.


 


18

















 


Section 10.02         Notices.  All notices and other communications provided
for herein shall be given in the manner and subject to the terms of Section 12.01
of the Credit Agreement; provided that any such notice, request or demand to or
upon the Guarantor shall be addressed to the Guarantor at its notice address
set forth on Schedule 1.


 


Section 10.03         Payment of Expenses, Indemnities, Etc.


 


(a)           The Guarantor agrees to pay
or promptly reimburse the Administrative Agent and each other Secured Party for
all advances, charges, costs and expenses (including, without limitation, all
costs and expenses of holding, preparing for sale and selling, collecting or
otherwise realizing upon the Collateral and all attorneys’ fees, legal expenses
and court costs) incurred by any Secured Party in connection with the exercise
of its respective rights and remedies hereunder, including, without limitation,
any advances, charges, costs and expenses that may be incurred in any effort to
enforce any of the provisions of this Agreement or any obligation of the
Guarantor in respect of the Collateral or in connection with (i) the
preservation of the Lien of, or the rights of the Administrative Agent or any
other Secured Party under this Agreement, (ii) any actual or attempted
sale, lease, disposition, exchange, collection, compromise, settlement or other
realization in respect of, or care of, the Collateral, including all such costs
and expenses incurred in any bankruptcy, reorganization, workout or other
similar proceeding, or (iii) collecting against the Guarantor under the
guarantee contained in Article II or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which the Guarantor
is a party.


 


(b)           The Guarantor agrees to pay,
and to save the Administrative Agent and the other Secured Parties harmless
from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, reasonable costs, reasonable expenses or disbursements of any
kind or nature whatsoever (including, without limitation, court costs and
reasonable attorneys’ fees, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement) incurred because of, incident to, or with respect to, the
Collateral (including, without limitation, any exercise of rights or remedies
in connection therewith) or the execution, delivery, enforcement, performance
and administration of this Agreement, to the extent the Borrower would be
required to do so pursuant to Section 12.03 of the Credit Agreement.  All amounts for which the Guarantor is liable
pursuant to this Section 10.03 shall be due and payable by the Guarantor
to the Secured Parties upon demand.


 


Section 10.04         Amendments in Writing.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 12.02 of the Credit Agreement.


 


Section 10.05         Successors and Assigns.  This Agreement shall be binding upon the
successors and assigns of the Guarantor and shall inure to the benefit of the
Administrative Agent and the other Secured Parties and their successors and
assigns permitted under the Credit Agreement; provided that except as set forth
in Section 9.11 of the Credit Agreement, the Guarantor may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and the Lenders.


 


19

















 


Section 10.06         Invalidity.  In the event that any one or more of the
provisions contained in this Agreement or in any of the Loan Documents to which
the Guarantor is a party shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or such other Loan
Document and the remaining provisions hereof shall remain in full force and
effect and shall be liberally construed to carry out the provisions and intent
hereof; provided, if any one or more of the provisions contained in this
Agreement shall be determined or held to be invalid or unenforceable because
such provision is overly broad as to duration, geographic scope, activity, subject
or otherwise, such provision shall be deemed amended (and any court or other
tribunal shall be entitled to reform this Agreement accordingly) by limiting
and reducing it to the extent necessary to make such provision valid and
enforceable


 


Section 10.07         Counterparts.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.


 


Section 10.08         Survival.  The obligations of the parties under Section 10.03
shall survive the repayment of the Loans and the termination of the Credit
Agreement and total Commitments.  To the
extent that any payments on the Obligations or proceeds of any Collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s and
the other Secured Parties’ Liens, security interests, rights, powers and
remedies under this Agreement and each Security Instrument shall continue in
full force and effect.  In such event,
each Security Instrument shall be automatically reinstated and the Guarantor
shall take such action as may be reasonably requested by the Administrative
Agent and the other Secured Parties to effect such reinstatement.


 


Section 10.09         Captions.  Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.


 


Section 10.10         No Oral Agreements.  The Loan Documents (other than the Letters of
Credit) embody the entire agreement and understanding between the parties and
supersede all other agreements and understandings between such parties relating
to the subject matter hereof and thereof. 
The Loan Documents represent the final agreement between the parties and
may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties.  There
are no unwritten oral agreements between the parties.


 


Section 10.11         Governing Law; Submission to
Jurisdiction.


 


(a)           This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Colorado.


 


(b)           Any legal action or
proceeding with respect to this Agreement or any other Loan Documents to which
the Guarantor is a party shall be brought in the courts of the State of 


 


20

















 


Colorado or of the United States of America for the
District of Colorado, and each of the Lenders, the Administrative Agent and the
Guarantor hereby accepts for itself and (to the extent permitted by law) in
respect of its Property, generally and unconditionally, the jurisdiction of the
aforesaid courts.  Each of the Lenders,
the Administrative Agent and the Guarantor hereby irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any such action or proceeding in such respective
jurisdictions.  This submission to
jurisdiction is non-exclusive and does not preclude the Administrative Agent or
any Lender from obtaining jurisdiction over the Guarantor in any court
otherwise having jurisdiction.


 


(c)           Each of the Lenders, the
Administrative Agent and the Guarantor irrevocably consents to the service of
process of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage prepaid,
to such Person at the address specified on its signature page of this
Agreement or the Credit Agreement, as applicable, such service to become
effective thirty (30) days after such mailing. 
Nothing herein shall affect the right of the Administrative Agent or any
Lender or any holder of a Note or the Guarantor to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Guarantor in any other jurisdiction.


 


(d)           The Guarantor and each
Lender hereby (i) irrevocably and unconditionally waive, to the fullest
extent permitted by law, trial by jury in any legal action or proceeding
relating to this Agreement or any other Loan Document and for any counterclaim
therein; (ii) irrevocably waive, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any such litigation any
special, exemplary, punitive or consequential damages, or damages other than,
or in addition to, actual damages; (iii) certify that no party hereto nor
any representative or agent of counsel for any party hereto has represented,
expressly or otherwise, or implied that such party would not, in the event of
litigation, seek to enforce the foregoing waivers, and (iv) acknowledge
that it has been induced to enter into this Agreement, the Loan Documents and
the transactions contemplated hereby and thereby by, among other things, the
mutual waivers and certifications contained in this Section 10.11.


 


Section 10.12         Acknowledgments.  The Guarantor hereby acknowledges that:


 


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


 


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


 


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


 


21

















 


(d)           each of the parties hereto
specifically agrees that it has a duty to read this Agreement and the Security
Instruments and agrees that it is charged with notice and knowledge of the
terms of this Agreement and the Security Instruments; that it has in fact read
this Agreement and is fully informed and has full notice and knowledge of the
terms, conditions and effects of this Agreement; that it has been represented
by independent legal counsel of its choice throughout the negotiations
preceding its execution of this Agreement and the Security Instruments; and has
received the advice of its attorney in entering into this Agreement and the
Security Instruments; and that it recognizes that certain of the terms of this
Agreement and the Security Instruments result in one party assuming the
liability inherent in some aspects of the transaction and relieving the other
party of its responsibility for such liability. 
Each party hereto agrees and covenants that it will not contest the
validity or enforceability of any exculpatory provision of this Agreement and
the Security Instruments on the basis that the party had no notice or knowledge
of such provision or that the provision is not “conspicuous.”


 


(e)           the Guarantor warrants and
agrees that each of the waivers and consents set forth in this Agreement are
made voluntarily and unconditionally after consultation with outside legal
counsel and with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which the Guarantor
otherwise may have against the Borrower, the Secured Parties or any other
Person or against any collateral.  If,
notwithstanding the intent of the parties that the terms of this Agreement
shall control in any and all circumstances, any such waivers or consents are
determined to be unenforceable under applicable law, such waivers and consents
shall be effective to the maximum extent permitted by law.


 


Section 10.13         Set-Off.  The Guarantor agrees that, in addition to
(and without limitation of) any right of set-off, bankers’ lien or counterclaim
a Secured Party may otherwise have, each Secured Party shall have the right and
be entitled (after consultation with the Administrative Agent), at its option,
to offset balances held by it or by any of its Affiliates for account of the
Guarantor or any Subsidiary at any of its offices, in United States dollars or
in any other currency against any principal of or interest on any of such
Secured Party’s Loans, or any other amount due and payable to such Secured
Party hereunder, which is not paid when due (regardless of whether such
balances are then due to such Person), in which case it shall promptly notify
the Borrower and the Administrative Agent thereof, provided that such Secured
Party’s failure to give such notice shall not affect the validity thereof.


 


Section 10.14         Releases.


 


(a)           Release Upon Payment in Full.  The grant of a security interest hereunder
and all of rights, powers and remedies in connection herewith shall remain in
full force and effect until the Administrative Agent has (i) retransferred
and delivered all Collateral in its possession to the Guarantor, and (ii) executed
a written release or termination statement and reassigned to the Guarantor
without recourse or warranty any remaining Collateral and all rights conveyed
hereby.  Upon the complete payment of the
Obligations, the termination of the Credit Agreement and the total Commitments
and the compliance by the Guarantor with all covenants and agreements hereof,
the Administrative Agent, at the written request and expense of the Borrower,
will promptly release, reassign and transfer the Collateral to the Guarantor
and declare this Agreement to be of no further force or effect.


 


22
















 


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


 


(c)           Retention in Satisfaction.  Except as may be expressly applicable
pursuant to Section 9-620 of the Colorado UCC, no action taken or omission
to act by the Administrative Agent or the other Secured Parties hereunder,
including, without limitation, any exercise of voting or consensual rights or
any other action taken or inaction, shall be deemed to constitute a retention
of the Collateral in satisfaction of the Obligations or otherwise to be in full
satisfaction of the Obligations, and the Obligations shall remain in full force
and effect, until the Administrative Agent and the other Secured Parties shall
have applied payments (including, without limitation, collections from
Collateral) towards the Obligations in the full amount then outstanding or
until such subsequent time as is provided in Section 10.14(a).


 


Section 10.15         Reinstatement.  The obligations of the Guarantor under this
Agreement (including, without limitation, with respect to the guarantee
contained in Article II and the provision of collateral herein) shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or the Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.


 


Section 10.16         Acceptance.  The Guarantor hereby expressly waives notice
of acceptance of this Agreement, acceptance on the part of the Administrative
Agent and the other Secured Parties being conclusively presumed by their
request for this Agreement and delivery of the same to the Administrative
Agent.


 


Section 10.17         Intercreditor Agreement.  Reference is made to the Intercreditor
Agreement dated as of November 30, 2010 (as amended, restated,
supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), among the Company, Wells Fargo Bank, National Association, as
First Lien Administrative Agent (as defined therein), and Wells Fargo Energy
Capital, Inc., as Second Lien Administrative Agent (as defined therein).
Notwithstanding anything herein to the contrary, the lien and security interest
granted to the Administrative Agent, for the benefit of the Secured Parties,
pursuant to this Agreement and the 


 


23

















 


exercise of any right or remedy by the
Administrative Agent and the other Secured Parties hereunder are subject to the
provisions of the Intercreditor Agreement. 
In the event of any conflict or inconsistency between the provisions of
the Intercreditor Agreement and this Agreement, the provisions of the
Intercreditor Agreement shall control.


 


24

















 


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


 


 


	
  GUARANTOR:

  	
  KODIAK OIL & GAS CORP., a corporation
  continued under the laws of Yukon Territories, Canada

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Henderson

  
	
   

  	
   

  	
  James P. Henderson

  
	
   

  	
   

  	
  Chief Financial Officer

  



 


SIGNATURE PAGE

GUARANTEE AND PLEDGE AGREEMENT


 

















 


Acknowledged
and Agreed to as

of the date hereof by:


 


 


 


	
  ADMINISTRATIVE AGENT:

  	
  WELLS FARGO ENERGY CAPITAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryan McDavid

  
	
   

  	
   

  	
  Bryan McDavid

  
	
   

  	
   

  	
  Vice President

  



 


SIGNATURE PAGE

GUARANTEE AND PLEDGE AGREEMENT


 

















 


Schedule 1


 


NOTICE ADDRESS OF GUARANTOR


 


1.            Kodiak Oil & Gas Corp.


 


Notice
Address:


 


1625
Broadway, Suite 250

Denver, Colorado 80202


Attention:  Lynn Peterson

Telephone: 303-592-8071

Facsimile: 303-592-8075


 

















 


Schedule 2


 


DESCRIPTION OF PLEDGED SECURITIES


 


Pledged
Securities:


 


	
  Owner

  	
   

  	
  Issuer

  	
   

  	
  Class of Stock or

  other Equity Interest

  	
   

  	
  No. of

  Shares

  	
   

  	
  Certificated or

  Uncertificated

  
	
  Kodiak Oil & Gas Corp.

  	
   

  	
  Kodiak Oil & Gas (USA) Inc.

  	
   

  	
  Common

  	
   

  	
  1

  	
   

  	
  Certificated

  



 

















 


Schedule 3


 


FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS


 


Delivery
to Administrative Agent of Pledged Securities


 

















 


Schedule 4


 


CORRECT LEGAL NAME, LOCATION OF JURISDICTION OF ORGANIZATION,

ORGANIZATIONAL IDENTIFICATION NUMBER, TAXPAYOR IDENTIFICATION

NUMBER AND CHIEF EXECUTIVE OFFICE


 


1.                                       Kodiak Oil &
Gas Corp., a corporation continued under the laws of Yukon Territories, Canada


Organizational Identification Number:  20061166885


Taxpayer Identification Number:  N/A


Chief Executive Office: 1625 Broadway, Suite 250,
Denver, Colorado 80202


 

















 


Schedule 5


 


PRIOR NAMES AND PRIOR CHIEF EXECUTIVE OFFICE


 


1.                                       Kodiak Oil &
Gas Corp., a corporation continued under the laws of Yukon Territories, Canada


Prior Names: 
None


Prior
Chief Executive Office:  1625 Broadway, Suite 330


Denver, Colorado 80202