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                                                                    EXHIBIT 10.4



                                PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT (this "Agreement") is made as of May 15, 1998,
by UNITED STATES EXPLORATION, INC., a Colorado corporation (herein called
"Debtor"), in favor of ING (U.S.) CAPITAL CORPORATION, in its capacity as Agent
for itself and certain other lenders from time to time parties to the Credit
Agreement described herein (together with its successors and assignees herein
called "Secured Party").

                                   RECITALS:

         1.  Debtor, Secured Party, and the other financial institutions named
therein as Lenders ("Lenders") are parties to a Credit Agreement of even date
herewith (herein, as from time to time amended, supplemented or restated,
called the "Credit Agreement"), pursuant to which Secured Party has agreed to
advance funds to Debtor under the Note (described below).

         2.  Pursuant to the Credit Agreement, Debtor has executed in favor of
the initial Lender a certain promissory note payable to the order of the
initial Lender in the aggregate principal amount of $35,000,000 (such
promissory note, as from time to time amended, and all promissory notes given
in substitution, renewal or extension therefor or thereof, in whole or in part,
being herein collectively called the "Note").

         3.  It is a condition precedent to Secured Party's obligation to
advance funds pursuant to the Credit Agreement that Debtor, among other things,
shall execute and deliver this Agreement to Secured Party for the benefit of
Lenders.

         NOW, THEREFORE, in consideration of the premises, of the benefits
which will inure to Debtor from Secured Party's extension of credit under the
Credit Agreement, and of Ten Dollars and other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, and in
order to induce Secured Party to extend credit under the Credit Agreement,
Debtor hereby agrees with Secured Party as follows:


                                   AGREEMENTS

                    ARTICLE I -- Definitions and References

         Section 1.1.  General Definitions.  As used herein, the terms
"Agreement", "Debtor", "Secured Party", "Note", "Lenders", and "Credit
Agreement" shall have the meanings indicated above, and the following terms
shall have the following meanings:

         "Collateral" means all property, of whatever type, which is described
in Section 2.1 as being at any time subject to a security interest granted
hereunder to Secured Party.
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         "Commitment" means the agreement or commitment by the Lenders to make
loans or otherwise extend credit to Debtor under the Credit Agreement, and any
other agreement, commitment, statement of terms or other document contemplating
the making of loans or advances or other extension of credit by the Lenders to
or for the account of Debtor which is now or at any time hereafter intended to
be secured by the Collateral under this Agreement.

         "Issuer" means any issuer of Pledged Shares, the Partnership, and any
successor of such Issuer.

         "Obligation Documents" means the Credit Agreement, all other Loan
Documents, and all other documents and instruments under, by reason of which,
or pursuant to which any or all of the Secured Obligations are evidenced,
governed, secured, guarantied, or otherwise dealt with, and all other
agreements, certificates, and other documents, instruments and writings
heretofore or hereafter delivered in connection herewith or therewith.

         "Other Liable Party" means any Person, other than Debtor, who may now
or may at any time hereafter be primarily or secondarily liable for any of the
Secured Obligations or who may now or may at any time hereafter have granted to
Secured Party a Lien upon any property as security for the Secured Obligations.

         "Other Partnership Rights" has the meaning given it in Section 2.1(b).

         "Partnership" means the Weld County Partnership, a Colorado general
partnership formed under and governed by the Weld County Partnership Agreement
dated December 31, 1982 by and between Champlin Petroleum Company and True Oil
Company, and any successors of any such partnerships.

         "Partnership Agreements", "Partnership Rights", and "Partnership
Rights to Payments" have the meanings given them in Section 2.1(b).

         "Person" means an individual, corporation, partnership, association,
joint stock company, trust, unincorporated organization or joint venture, or a
court or governmental unit or any agency or subdivision thereof, or any other
legally recognizable entity.

         "Pledged Shares" has the meaning given it in Section 2.1(a).

         "Purchase and Sale Agreement" means that Asset Purchase and Sale
Agreement dated April 9, 1998 between Debtor and Union Pacific.

         "Related Person" means Debtor, each Subsidiary of Debtor, and each 
Other Liable Party.

         "Secured Obligations" shall have the meaning given it in Section 2.2.

         "UCC" means the Uniform Commercial Code in effect in the State of New
York on the date hereof.


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         "Union Pacific " means Union Pacific Resources Corporation.

         Section 1.2.  Incorporation of Other Definitions.  Reference is hereby
made to the Credit Agreement for a statement of the terms thereof.  All
capitalized terms used in this Agreement which are defined in the Credit
Agreement and not otherwise defined herein shall have the same meanings herein
as set forth therein.  All terms used in this Agreement which are defined in
the UCC and not otherwise defined herein or in the Credit Agreement shall have
the same meanings herein as set forth therein, except where the context
otherwise requires.

         Section 1.3.  Attachments.  All exhibits or schedules which may be
attached to this Agreement are a part hereof for all purposes.

         Section 1.4.  Amendment of Defined Instruments.  Unless the context
otherwise requires or unless otherwise provided herein, references in this
Agreement to a particular agreement, instrument or document (including, but not
limited to, references in Section 2.1) also refer to and include all renewals,
extensions, amendments, modifications, supplements or restatements of any such
agreement, instrument or document, provided that nothing contained in this
Section shall be construed to authorize any Person to execute or enter into any
such renewal, extension, amendment, modification, supplement or restatement.

         Section 1.5.  References and Titles.  All references in this Agreement
to Exhibits, Articles, Sections, subsections, and other subdivisions refer to
the Exhibits, Articles, Sections, subsections and other subdivisions of this
Agreement unless expressly provided otherwise.  Titles appearing at the
beginning of any subdivision are for convenience only and do not constitute any
part of any such subdivision and shall be disregarded in construing the
language contained in this Agreement.  The words "this Agreement", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited.  The phrases "this Section" and "this subsection" and similar phrases
refer only to the Sections or subsections hereof in which the phrase occurs.
The word "or" is not exclusive, and the word "including" (in all of its forms)
means "including without limitation".  Pronouns in masculine, feminine and
neuter gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless
the context otherwise requires.

                        ARTICLE II -- Security Interest

         Section 2.1.  Grant of Security Interest.  As collateral security for
all of the Secured Obligations, Debtor hereby pledges and assigns to Secured
Party and grants to Secured Party, for the benefit of Lenders, a continuing
security interest in and to the following, whether now or hereafter existing,
which are owned by Debtor or in which Debtor otherwise has any rights:

         (a)  Pledged Shares.  All of the following, whether now or hereafter
existing, which are owned by Debtor or in which Debtor otherwise has any
rights: (i) the shares of stock described in Exhibit A hereto, (ii) all other
shares of stock or other equity interests now owned or hereafter acquired by
Debtor, whether of the Issuers listed on Exhibit A or any other Person, (iii)
all certificates representing any such shares, all options and other rights,
contractual or otherwise, at





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any time existing with respect to such shares, and (iv) all dividends, cash,
instruments and other property now or hereafter received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares (any and all such shares, certificates, options, rights, dividends,
cash, instruments and other property, collectively, the "Pledged Shares").

         (b)  Partnership Rights.  All of the following (collectively, the
"Partnership Rights"), whether now or hereafter existing, which are owned by
Debtor or in which Debtor otherwise has any rights:

                 (i)  all interests and rights of Debtor arising under or
         pursuant to the Purchase and Sale Agreement in respect of the
         Partnership, including without limitation any right to receive an
         assignment from Union Pacific of Union Pacific's interest in the
         Partnership and all interests and rights of Debtor in and to the
         Partnership if and when such an assignment is made;

                 (ii)  all proceeds, interest, profits, and other payments or
         rights to payment attributable to Debtor's interests in the
         Partnership, and all distributions, cash, instruments and other
         property now or hereafter received, receivable or otherwise made with
         respect to or in exchange for any interest of Debtor in the
         Partnership, including interim distributions, returns of capital, loan
         repayments, and payments made in liquidation of the Partnership, and
         whether or not the same arise or are payable under any partnership
         agreement or certificate forming the Partnership or any other
         agreement governing the Partnership or the relations among the
         partners in the Partnership (any and all such proceeds, interest,
         profits, payments, rights to payment, distributions, cash,
         instruments, other property, interim distributions, returns of
         capital, loan repayments, and payments made in liquidation,
         collectively, the "Partnership Rights to Payments", and any and all
         such partnership agreements, certificates, and other agreements,
         collectively, the "Partnership Agreements"); and

                 (iii)  all other interests and rights of Debtor in the
         Partnership, whether under the Partnership Agreements or otherwise,
         including without limitation any right to cause the dissolution of the
         Partnership or to appoint or nominate a successor to Debtor as a
         partner in the Partnership (all such other interests and rights,
         collectively, the "Other Partnership Rights").

         (c) Other Collateral.  All indebtedness, notes, bonds, convertible
securities or other obligations of any Issuer, the Partnership or any other
Person and all other general intangibles and accounts.

         (d)  Proceeds.  All proceeds of any and all of the foregoing
Collateral and, to the extent not otherwise included, all payments under
insurance (whether or not Secured Party is the loss payee thereof) or under any
indemnity, warranty or guaranty by reason of loss to or otherwise with respect
to any of the foregoing Collateral.





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In each case, the foregoing shall be covered by this Agreement, whether
Debtor's ownership or other rights therein are presently held or hereafter
acquired and however Debtor's interests therein may arise or appear (whether by
ownership, security interest, claim or otherwise).

         The granting of the foregoing security interest does not make Secured
Party a successor to Debtor as a partner in the Partnership, and neither
Secured Party nor any of its successors or assigns hereunder shall be deemed to
have become a partner in the Partnership by accepting this Agreement or
exercising any right granted herein unless and until such time, if any, when
Secured Party or any such successor or assign expressly becomes a partner in
the Partnership after a foreclosure upon Other Partnership Rights.
Notwithstanding anything herein to the contrary (except to the extent, if any,
that Secured Party or any of its successors or assigns hereafter expressly
becomes a partner in the Partnership), neither Secured Party nor any of its
successors or assigns shall be deemed to have assumed or otherwise become
liable for any debts or obligations of the Partnership or of Debtor to or under
the Partnership, and the above definition of "Other Partnership Rights" shall
be deemed modified, if necessary, to prevent any such assumption or other
liability.

         Section 2.2.  Secured Obligations.  The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, indebtedness and liabilities, whether now existing
or hereafter incurred or arising:

         (a)     The payment by Debtor, as and when due and payable, of the
"Obligations", as defined in the Credit Agreement, and of all amounts from time
to time owing by Debtor under or in respect of the Credit Agreement, the Note,
or any of the other Obligation Documents, and the due performance by Debtor of
all of its other obligations under or in respect of the various Obligation
Documents.

         (b)     All indebtedness and other obligations now or hereafter
incurred or arising pursuant to or permitted by the provisions of the Note, the
Credit Agreement, or any other instrument now or hereafter evidencing,
governing, guaranteeing or securing the Obligations or any part thereof or
otherwise executed in connection with any advance or loan evidenced or governed
by the Note or the Credit Agreement;

         (c)     All present or future "Hedging Obligations" incurred or owing
by Debtor to any one or more members of the "Credit Group," as hereinafter
defined; as used in this paragraph and the following paragraph (e): (i) "Credit
Group" means ING (U.S.) Capital Corporation, any other party from time to time
constituting a lender under the Credit Agreement, and/or any affiliate of any
such party, and (ii) "Hedging Obligations" means any indebtedness or
obligations, however arising, to make payments or take actions under or
pursuant to any present or future agreement (including any individual agreement
or any master agreement and the various transactions and confirmations made
thereunder) governing any swap, put, call, cap, floor or collar transaction, or
other type of agreement or transaction relating to interest rates, currency
exchange rates, or the





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price or delivery (at any one or more locations or in any one or more markets)
of crude oil, natural gas, natural gas liquids, petroleum products, other
hydrocarbons, agricultural products, precious metals, stocks or bonds or
indices thereof, or any other commodity, contract or other item of property
traded in any market, and all interest thereon and expenses and other amounts
payable in connection therewith (any agreement or document, however entitled or
described, evidencing or governing any Hedging Obligations owing by Debtor to
any one or more members of the Credit Group being herein called a "Hedging
Agreement");

         (d)     All present or future indebtedness or obligations incurred or
owing to any one or more members of the Credit Group by Debtor, however
arising, to make reimbursements or similar payments to any one or more members
of the Credit Group as a result of or relating to any payments made by any one
or more members of the Credit Group to any third person on account of or for
the benefit of Debtor, including without limitation any obligation to reimburse
any one or more members of the Credit Group for payments it makes under or
pursuant to any letter of credit, bond, guaranty, or indemnity agreement issued
or made for the account of or for the benefit of Debtor (such as a letter of
credit, guaranty or indemnity by any one or more members of the Credit Group of
any Hedging Obligations owed by Debtor to a third person) and all interest
thereon and expenses and other amounts payable in connection therewith (any
agreement or document, however entitled or described, evidencing or governing
any such indebtedness or obligation owing to any one or more members of the
Credit Group by Debtor being herein called a "Reimbursement Agreement");

         (e)     All other loans and future advances made by one or more
members of the Credit Group to Debtor and all other debts, obligations and
liabilities of Debtor of every kind and character now or hereafter existing in
favor of one or more members of the Credit Group, whether direct or indirect,
primary or secondary, joint or several, fixed or contingent, and whether such
debts, obligations or liabilities are evidenced by notes, open account,
overdraft, endorsement, security agreement, guaranty or otherwise (it being
contemplated that Debtor may hereafter become indebted to the Credit Group in
further sum or sums but the Credit Group shall have no obligation to extend
further indebtedness by reason of this Agreement); and

         (f)     All renewals, extensions, amendments, modifications,
supplements, or restatements of or substitutions for any of the foregoing.

         As used herein, the term "Secured Obligations" refers to all present
and future indebtedness, obligations, and liabilities of whatever type which
are described above in this section, including any interest which accrues after
the commencement of any case, proceeding, or other action relating to the
bankruptcy, insolvency, or reorganization of the Debtor.  Debtor hereby
acknowledges that the Secured Obligations are owed to the various Lenders who
are parties to the Credit Agreement from time to time and that each such Lender
is entitled to the benefit of the Liens given under this Agreement.





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            ARTICLE III -- Representations, Warranties and Covenants

         Section 3.1.  Representations and Warranties.  Debtor represents and
warrants to Secured Party and Lenders as follows:

         (a)  Ownership Free of Liens.  Debtor has good and marketable title to
the Collateral free and clear of all Liens, encumbrances or adverse claims,
except for the security interest created by this Agreement.  No dispute, right
of setoff, counterclaim or defense exists with respect to all or any part of
the Collateral, except such matters which may exist from time to time with
respect to the Partnership Rights which will not, in the aggregate have a
material adverse effect on the value of such Partnership Rights.  No effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any recording office except any which have
been filed in favor of Secured Party relating to this Agreement.

         (b)  No Conflicts or Consents.  Neither the ownership or the intended
use of the Collateral by Debtor, nor the grant of the security interest by
Debtor to Secured Party herein, nor the exercise by Secured Party of its rights
or remedies hereunder, will (i) conflict with any provision of (a) any domestic
or foreign law, statute, rule or regulation, (b) the articles or certificate of
incorporation, charter or bylaws of Debtor or any Issuer, or the Partnership
Agreement, subject to the consent requirements contained in the Partnership
Agreements, or (c) any agreement, judgment, license, order or permit applicable
to or binding upon Debtor or any Issuer, or (ii) result in or require the
creation of any Lien, charge or encumbrance upon any assets or properties of
Debtor or of any Issuer or Related Person except as expressly contemplated in
the Obligation Documents.  Except as expressly contemplated in the Obligation
Documents and subject to the consent requirements contained in the Partnership
Agreements, no consent, approval, authorization or order of, and no notice to
or filing with, any court, governmental authority, Issuer or third party is
required in connection with the grant by Debtor of the security interest
herein, or the exercise by Secured Party of its rights and remedies hereunder.

         (c)  Security Interest.  Debtor has and will have at all times full
right, power and authority to grant a security interest in the Collateral to
Secured Party as provided herein, free and clear of any Lien, adverse claim, or
encumbrance.  This Agreement creates a valid and binding first priority
security interest in favor of Secured Party in the Collateral, which security
interest secures all of the Secured Obligations.  The taking possession by
Secured Party of all certificates, instruments and cash constituting Collateral
from time to time and the filing of the financing statements delivered
concurrently herewith by Debtor to Secured Party will perfect, and establish
the first priority of, Secured Party's security interest hereunder in the
Collateral securing the Secured Obligations.  No further or subsequent filing,
recording, registration, other public notice or other action is necessary or
desirable to perfect or otherwise continue, preserve or protect such security
interest except for continuation statements and for filings described in
Section 3.3(d).

         (d)  Location of Debtor and Records.  Debtor's chief executive office
and principal place of business and the office where the records concerning the
Collateral are kept is located at its address set forth in the Credit
Agreement.





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         (e)  Pledged Shares.  Debtor has delivered to Secured Party all
certificates evidencing Pledged Shares.  All such certificates are valid and
genuine and have not been altered.  All shares and other securities
constituting the Pledged Shares have been duly authorized and validly issued,
are fully paid and non-assessable, and were not issued in violation of the
preemptive rights of any Person or of any agreement by which Debtor or the
Issuer thereof is bound.  All documentary, stamp or other taxes or fees owing
in connection with the issuance, transfer or pledge of Pledged Shares (or
rights in  respect thereof) have been paid.  No restrictions or conditions
exist with respect to the transfer, voting or capital of any Pledged Shares.
The Pledged Shares constitute the percentage of the class of issued shares of
capital stock which is indicated on Exhibit A.  No Issuer of any Pledged Shares
has any outstanding stock rights, rights to subscribe, options, warrants or
convertible securities outstanding or any other rights outstanding whereby any
Person would be entitled to have issued to him capital stock of such Issuer.

         (f)  Partnership Rights.   Neither the making of this Agreement nor
the exercise of any rights or remedies of Secured Party hereunder will cause a
default under any of the Partnership Agreements or otherwise adversely affect
or diminish any of the Partnership Rights, subject to the consent requirements
contained in the Partnership Agreements.  From and after the conveyance to
Debtor by Union Pacific of its interest in the Partnership pursuant to the
Purchase and Sale Agreement, (i) Debtor will own the interests in the
Partnership which are described on Exhibit A, (ii) Debtor will not be in
default under the Partnership Agreements, and (iii) Debtor's rights under the
Partnership Agreements will be enforceable in accordance with their terms,
except as such enforcement may be limited by bankruptcy, insolvency or similar
laws of general application relating to the enforcement of creditors' rights.

         Section 3.2.  Affirmative Covenants.  Unless Secured Party shall
otherwise consent in writing, Debtor will at all times comply with the
covenants contained in this Section 3.2 from the date hereof and so long as any
part of the Secured Obligations or the Commitment is outstanding.

         (a)  Ownership and Liens.  Debtor will maintain good and marketable
title to all Collateral free and clear of all Liens, encumbrances or adverse
claims, except for the security interest created by this Agreement.  Debtor
will not permit any dispute, right of setoff, counterclaim or defense to exist
with respect to all or any part of the Collateral.  Debtor will cause to be
terminated any financing statement or other registration or instrument similar
in effect covering all or any part of the Collateral, except any which have
been filed in favor of Secured Party relating to this Agreement.  Debtor will
defend Secured Party's right, title and special property and security interest
in and to the Collateral against the claims of any Person.

         (b)  Further Assurances.  Debtor will, at its expense and at any time
and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or desirable or
that Secured Party may request in order (i) to perfect and protect the security
interest created or purported to be created hereby and the first priority of
such security interest; (ii) to enable Secured Party to exercise and enforce
its rights and remedies hereunder in respect of the Collateral; or (iii) to
otherwise effect the purposes of this Agreement, including but not limited to:
(A) executing and filing such financing or continuation statements, or
amendments thereto, as may be necessary or desirable or that Secured Party may
request in order to perfect and preserve the security interest created or
purported to be created hereby; (B)





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delivering to Secured Party (upon request, to the extent not otherwise required
hereunder to be delivered without request) all originals of chattel paper,
documents or instruments which are from time to time included in the
Collateral; and (C) furnishing to Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail.

         (c)  Inspection and Information.  Debtor will keep adequate records
concerning the Collateral and will permit Secured Party and all representatives
appointed by Secured Party, including independent accountants, agents,
attorneys, appraisers and any other persons, to inspect any of the Collateral
and the books and records of or relating to the Collateral at any time during
normal business hours, and to make photocopies and photographs thereof, and to
write down and record any information as such representatives shall obtain.
Debtor will furnish to Secured Party any information which Secured Party may
from time to time request concerning any covenant, provision or representation
contained herein or any other matter in connection with the Collateral or
Debtor's business, properties, or financial condition.

         (d)  Partnership Rights.  From and after the assignment to Debtor by
Union Pacific of its rights in the Partnership pursuant to the Purchase and
Sale Agreement: (i) Debtor will maintain its ownership of the interests in the
Partnership, (ii) Debtor will timely honor all calls under any Partnership
Agreement to provide capital to the Partnership, and (iii) Debtor will not
otherwise default in performing any of its obligations under any Partnership
Agreement or allow any Partnership Rights to be adversely affected or
diminished.  Debtor will promptly inform Secured Party of any such failure to
honor a capital call, default, adverse effect, or diminution.  Debtor will
promptly inform Secured Party of any such failure to honor a capital call or
default by another partner in the Partnership.  The Partnership Rights shall at
all times be duly authorized and validly issued and will not violate any
agreement by which Debtor or the Partnership is bound.

         (e)  Delivery of Pledged Shares.  All instruments and writings
evidencing the Pledged Shares and any certificates or instruments evidencing
the Partnership Rights shall be delivered to Secured Party on or prior to the
execution and delivery of this Agreement, together with a true copy of the
Partnership Agreements and all amendments and supplements thereto.  All other
instruments and writings hereafter evidencing or constituting Pledged Shares or
evidencing Partnership Rights, and all amendments and supplements to the
Partnership Agreements (whether or not authorized hereunder) shall be delivered
to Secured Party promptly upon the receipt thereof by or on behalf of Debtor.
All such Pledged Shares, certificates and instruments shall be held by or on
behalf of Secured Party pursuant hereto and shall be delivered in suitable form
for transfer by delivery with any necessary endorsement or shall be accompanied
by fully executed instruments of transfer or assignment in blank, all in form
and substance satisfactory to Secured Party.

         (f)  Proceeds of Pledged Shares and Partnership Rights.  If Debtor
shall receive, by virtue of its being or having been an owner of any Pledged
Shares or Partnership Rights, any (i) stock certificate, certificate,
instrument, deed, bill of sale, promissory note, or other instrument or writing
(including any certificate representing a stock dividend or distribution or any
given in





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connection with any increase or reduction of capital, reorganization,
reclassification, merger, consolidation, sale of assets, liquidation, or
partial liquidation, combination of shares, stock split, spinoff or split-off),
promissory note or other instrument or writing; (ii) option or right, whether
as an addition to, substitution for, or in exchange for, any Pledged Shares or
Partnership Rights, or otherwise; (iii) dividends or distributions payable in
cash (except such dividends or distributions permitted to be retained by Debtor
pursuant to Section 4.8 hereof) or in securities or other property, or (iv)
dividends or other distributions in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in surplus, Debtor shall receive the same in trust for
the benefit of Secured Party, shall segregate it from Debtor's other property,
and shall promptly deliver it to Secured Party in the exact form received, with
any necessary endorsement or appropriate stock powers or instruments of
transfer duly executed in blank, to be held by Secured Party as Collateral.

         (g)  Status of Pledged Shares and Partnership Rights.  The
certificates evidencing the Pledged Shares and the Partnership Rights shall at
all times be valid and genuine and shall not be altered.  The Pledged Shares at
all times shall be duly authorized, validly issued, fully paid, and
non-assessable, and shall not be issued in violation of the preemptive rights
of any Person or of any agreement by which Debtor or the Issuer thereof is
bound and shall not be subject to any restrictions with respect to transfer,
voting or capital of such Pledged Shares or Partnership Rights, other than
restrictions on the transfer of Partnership Rights contained in the Partnership
Agreements.

         (h)  Notices from Issuer.  Debtor will promptly deliver to Secured
Party a copy of each notice or other communication received by Debtor from any
Issuer in respect of any Pledged Shares or Partnership Rights.

         Section 3.3.  Negative Covenants.  Unless Secured Party shall
otherwise consent in writing, Debtor will at all times comply with the
covenants contained in this Section 3.3 from the date hereof and so long as any
part of the Secured Obligations or the Commitment is outstanding.

         (a)  Transfer or Encumbrance.  Debtor will not sell, assign (by
operation of law or otherwise), transfer, exchange, lease or otherwise dispose
of any of the Collateral, nor will Debtor grant a Lien upon or execute, file or
record any financing statement or other registration with respect to the
Collateral, nor will Debtor allow any such Lien, financing statement, or other
registration to exist or deliver actual or constructive possession of the
Collateral to any other Person, other than Liens in favor of Secured Party.

         (b)  Impairment of Security Interest.  Debtor will not take or fail to
take any action which would in any manner impair the value or enforceability of
Secured Party's first priority security interest in any Collateral.

         (c)  Compromise of Collateral.  Debtor will not adjust, settle,
compromise, amend or modify any of its rights in the Collateral.

         (d)  Financing Statement Filings.  Debtor recognizes that financing
statements pertaining to the Collateral have been or may be filed where Debtor
maintains any Collateral, has its records





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concerning any Collateral or has its chief executive office or chief place of
business.  Without limitation of any other covenant herein, Debtor will not
cause or permit any change to be made in its name, identity or corporate
structure, or any change to be made to a jurisdiction other than as represented
in Section 3.1 hereof in (i) the location of any records concerning any
Collateral or (ii) in the location of its chief executive office or chief place
of business, unless Debtor shall have notified Secured Party of such change at
least thirty (30) days prior to the effective date of such change, and shall
have first taken all action required by Secured Party for the purpose of
further perfecting or protecting the security interest in favor of Secured
Party in the Collateral.  In any notice furnished pursuant to this subsection,
Debtor will expressly state 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 Secured Party's
security interest in the Collateral.

         (e)  Dilution of Shareholdings; Diminution of Partnership Rights.
Debtor will not adjust, settle, compromise, amend or modify any of the
Partnership Rights or any Partnership Agreement.  Debtor will not permit the
issuance or creation of (i) any additional shares of any class of capital stock
of, or any additional interests in, any Issuer (unless immediately upon
issuance or creation the same are pledged and delivered to Secured Party
pursuant to the terms hereof to the extent necessary to give Secured Party a
first priority security interest after such issue in, or a security interest in
Partnership Rights after such creation which are in the aggregate, at least the
same percentage of such Issuer's outstanding shares as Debtor had, or the
outstanding rights of the same kind in Issuer as were subject hereto, before
such issue), whether such additional interests are presently vested or will
vest upon the payment of money or the occurrence or nonoccurrence of any other
condition (ii) any securities convertible voluntarily by the holder thereof or
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such shares of capital stock or interests, or
(iii) any warrants, options, contracts or other commitments entitling any
Person to purchase or otherwise acquire any such shares of capital stock or
interests not outstanding as of the date of this Agreement.

         (f)  Restrictions on Pledged Shares and Partnership Rights.  Debtor
will not enter into any agreement (other than the Obligation Documents)
creating, or otherwise permit to exist, any restriction or condition upon the
transfer, voting or control of any Pledged Shares or Partnership Rights.

               ARTICLE IV -- Remedies, Powers and Authorizations

         Section 4.1.  Provisions Concerning the Collateral.

         (a)  Additional Filings.  Debtor hereby authorizes Secured Party to
file, without the signature of Debtor where permitted by law, one or more
financing or continuation statements, and amendments thereto, relating to the
Collateral.  Debtor further agrees that a carbon, photographic or other
reproduction of this Security Agreement or of any financing statement
describing any Collateral is sufficient as a financing statement and may be
filed in any jurisdiction by Secured Party that Secured Party may deem
appropriate.





                                       11
<PAGE>   12
         (b)  Power of Attorney.  Debtor hereby irrevocably appoints Secured
Party as Debtor's attorney-in-fact and proxy, with full authority in the place
and stead of Debtor and in the name of Debtor or otherwise, from time to time
in Secured Party's discretion, to take any action, and to execute or indorse
any instrument, certificate or notice, which Secured Party may deem necessary
or advisable to accomplish the purposes of this Agreement including any action
or instrument: (i) to request or instruct each Issuer (and each registrar,
transfer agent, or similar Person acting on behalf of each Issuer) to register
the pledge or transfer of the Collateral to Secured Party; (ii) to otherwise
give notification to any Issuer, registrar, transfer agent, financial
intermediary, or other Person of Secured Party's security interests hereunder;
(iii) to ask, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral; (iv) to receive, indorse and collect any drafts or
other instruments or documents; (v) to enforce any obligations included among
the Collateral; and (vi) to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce, perfect, or
establish the priority of the rights of Secured Party with respect to any of
the Collateral.  Debtor hereby acknowledges that such power of attorney and
proxy are coupled with an interest, and are irrevocable.

         (c)  Performance by Secured Party.  If Debtor fails to perform any
agreement or obligation contained herein, Secured Party may itself perform, or
cause performance of, such agreement or obligation, and the expenses of Secured
Party incurred in connection therewith shall be payable by Debtor under Section
4.5.

         (d)  Collection Rights.  Secured Party shall have the right at any
time, after the occurrence of an Event of Default, to notify (or require Debtor
to notify) any or all Persons (including any Issuer) obligated to make payments
which are included among the Collateral (whether accounts, general intangibles,
dividends, distributions, Partnership Rights to Payment, or otherwise) of the
assignment thereof to Secured Party under this Agreement and to direct such
obligors to make payment of all amounts due or to become due to Debtor
thereunder directly to Secured Party and, upon such notification and at the
expense of Debtor and to the extent permitted by law, to enforce collection
thereof and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as Debtor could have done.  After Debtor
receives notice that Secured Party has given (and after Secured Party has
required Debtor to give) any notice referred to above in this subsection:

         (i) all amounts and proceeds (including instruments and writings)
         received by Debtor in respect of such distributions, accounts, or
         general intangibles or Partnership Rights to Payments shall be
         received in trust for the benefit of Secured Party hereunder, shall be
         segregated from other funds of Debtor and shall be forthwith paid over
         to Secured Party in the same form as so received (with any necessary
         indorsement) to be applied as specified in Section 4.3, and

         (ii) Debtor will not adjust, settle or compromise the amount or
         payment of any such account or general intangible or Partnership Right
         to Payments or release wholly or partly any account debtor or obligor
         thereof (including any Issuer) or allow any credit or discount
         thereon.





                                       12
<PAGE>   13
         Section 4.2.  Event of Default Remedies.  If an Event of Default shall
have occurred and be continuing, Secured Party may from time to time in its
discretion, without limitation and without notice except as expressly provided
below:

         (a)  exercise in respect of the Collateral, in addition to any other
rights and remedies provided for herein, under the other Obligation Documents
or otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral);

         (b)  require Debtor to, and Debtor hereby agrees that it will at its
expense and upon request of Secured Party, promptly assemble all or part of the
Collateral as directed by Secured Party and make it (together with all books,
records and information of Debtor relating thereto) available to Secured Party
at a place to be designated by Secured Party which is reasonably convenient to
both parties;

         (c)  reduce its claim to judgment or foreclose or otherwise enforce,
in whole or in part, the security interest created hereby by any available
judicial procedure;

         (d)  dispose of, at its office, on the premises of Debtor or
elsewhere, all or any part of the Collateral, as a unit or in parcels, by
public or private proceedings, and by way of one or more contracts (it being
agreed that the sale of any part of the Collateral shall not exhaust Secured
Party's power of sale, but sales may be made from time to time, and at any
time, until all of the Collateral has been sold or until the Secured
Obligations have been paid and performed in full), and at any such sale it
shall not be necessary to exhibit any of the Collateral;

         (e)  buy the Collateral, or any part thereof, at any public sale;

         (f)  buy the Collateral, or any part thereof, at any private sale if
the Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations;

         (g)  apply by appropriate judicial proceedings for appointment of a
receiver for the Collateral, or any part thereof, and Debtor hereby consents to
any such appointment; and

         (h)  at its discretion, retain the Collateral in satisfaction of the
Secured Obligations whenever the circumstances are such that Secured Party is
entitled to do so under the UCC or otherwise (provided that Secured Party shall
in no circumstances be deemed to have retained the Collateral in satisfaction
of the Secured Obligations in the absence of an express notice by Secured Party
to Debtor that Secured Party has either done so or intends to do so).

Debtor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' notice to Debtor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification.  Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.  Secured Party
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.





                                       13
<PAGE>   14
         Section 4.3.  Application of Proceeds.  If any Event of Default shall
have occurred and be continuing, Secured Party may in its discretion apply any
cash held by Secured Party as Collateral, and any cash proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral, to any or all of the following in such
order as Secured Party may elect:

         (a)  To the repayment of all costs and expenses, including reasonable
attorneys' fees and legal expenses, incurred by Secured Party in connection
with (i) the administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization
upon, any Collateral, (iii) the exercise or enforcement of any of the rights of
Secured Party hereunder, or (iv) the failure of Debtor to perform or observe
any of the provisions hereof;

         (b)  To the payment or other satisfaction of any Liens, encumbrances,
or adverse claims upon or against any of the Collateral;

         (c)  To the reimbursement of Secured Party for the amount of any
obligations of Debtor or any Other Liable Party paid or discharged by Secured
Party pursuant to the provisions of this Agreement or the other Obligation
Documents, and of any expenses of Secured Party payable by Debtor hereunder or
under the other Obligation Documents;

         (d)  To the satisfaction of any other Secured Obligations;

         (e)  By holding the same as Collateral;

         (f)  To the payment of any other amounts required by applicable law
(including any provision of the UCC); and

         (g)  By delivery to Debtor or to whomever shall be lawfully entitled
to receive the same or as a court of competent jurisdiction shall direct.

         Section 4.4.  Deficiency.  In the event that the proceeds of any sale,
collection or realization of or upon Collateral by Secured Party are
insufficient to pay all Secured Obligations and any other amounts to which
Secured Party is legally entitled, Debtor shall be liable for the deficiency,
together with interest thereon as provided in the governing Obligation
Documents or (if no interest is so provided) at such other rate as shall be
fixed by applicable law, together with the costs of collection and the
reasonable fees of any attorneys employed by Secured Party to collect such
deficiency.

         Section 4.5.  Indemnity and Expenses.  In addition to, but not in
qualification or limitation of, any similar obligations under other Obligation
Documents:





                                       14
<PAGE>   15
         (a)  Debtor will indemnify Secured Party and each Lender from and
against any and all claims, losses and liabilities growing out of or resulting
from this Agreement (including enforcement of this Agreement), WHETHER OR NOT
SUCH CLAIMS, LOSSES AND LIABILITIES ARE IN ANY WAY OR TO ANY EXTENT OWED, IN
WHOLE OR PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED BY
OR ARISING OUT OF SUCH INDEMNIFIED PARTY'S OWN NEGLIGENCE, except to the extent
such claims, losses or liabilities are proximately caused by such indemnified
party's individual gross negligence or willful misconduct.

         (b)  Debtor will upon demand pay to Secured Party the amount of any
and all costs and expenses, including the reasonable fees and disbursements of
Secured Party's counsel and of any experts and agents, which Secured Party may
incur in connection with (i) the perfection and preservation of this security
interest created under this Agreement, (ii) the preparation of this Agreement
and the perfection and preservation of the security interest created under this
Agreement, (iii) the administration of this Agreement; (iv) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any Collateral; (v) the exercise or enforcement of any of the
rights of Secured Party hereunder; or (vi) the failure by Debtor to perform or
observe any of the provisions hereof, except expenses resulting from Secured
Party's gross negligence or willful misconduct.

         Section 4.6.  Non-Judicial Remedies.  In granting to Secured Party the
power to enforce its rights hereunder without prior judicial process or
judicial hearing, Debtor expressly waives, renounces and knowingly relinquishes
any legal right which might otherwise require Secured Party to enforce its
rights by judicial process.  In so providing for non-judicial remedies, Debtor
recognizes and concedes that such remedies are consistent with the usage of
trade, are responsive to commercial necessity, and are the result of a bargain
at arm's length.  Nothing herein is intended, however, to prevent Secured Party
or Debtor from resorting to judicial process at its option.

         Section 4.7.  Other Recourse.  Debtor waives any right to require
Secured Party to proceed against any other Person, to exhaust any Collateral or
other security for the Secured Obligations, or to have any Other Liable Party
joined with Debtor in any suit arising out of the Secured Obligations or this
Agreement, or pursue any other remedy in Secured Party's power.  Debtor further
waives any and all notice of acceptance of this Agreement and of the creation,
modification, rearrangement, renewal or extension for any period of any of the
Secured Obligations of any Other Liable Party from time to time.  Debtor
further waives any defense arising by reason of any disability or other defense
of any Other Liable Party or by reason of the cessation from any cause
whatsoever of the liability of any Other Liable Party.  This Agreement shall
continue irrespective of the fact that the liability of any Other Liable Party
may have ceased and irrespective of the validity or enforceability of any other
Obligation Document to which Debtor or any Other Liable Party may be a party,
and notwithstanding any death, incapacity, reorganization, or bankruptcy of any
Other Liable Party or any other event or proceeding affecting any Other Liable
Party.  Until all of the Secured Obligations shall have been paid in full,
Debtor shall have no right to subrogation and Debtor waives the right to
enforce any remedy which Secured Party or any Lender has or may hereafter have
against any Other Liable Party, and waives any benefit of and any right to
participate in any other security whatsoever now or





                                       15
<PAGE>   16
hereafter held by Secured Party.  Debtor authorizes Secured Party and each
Lender, without notice or demand, without any reservation of rights against
Debtor, and without in any way affecting Debtor's liability hereunder or on the
Secured Obligations, from time to time to (a) take or hold any other property
of any type from any other Person as security for the Secured Obligations, and
exchange, enforce, waive and release any or all of such other property, (b)
apply the Collateral or such other property and direct the order or manner of
sale thereof as Secured Party may in its discretion determine, (c) renew,
extend for any period, accelerate, modify, compromise, settle or release any of
the obligations of any Other Liable Party in respect to any or all of the
Secured Obligations or other security for the Secured Obligations, (d) waive,
enforce, modify, amend, restate or supplement any of the provisions of any
Obligation Document with any Person other than Debtor, and (e) release or
substitute any Other Liable Party.

         Section 4.8.  Voting Rights, Dividends, Etc. in Respect of Pledged
Shares; Exercise of Partnership Rights.

         (a)  So long as no Event of Default shall have occurred and be
continuing:

                 (i)  Debtor may exercise any and all voting and other
         consensual rights pertaining to the Pledged Shares, Partnership
         Rights, or any part thereof for any purpose not inconsistent with the
         terms of this Agreement or any other Obligation Document; provided,
         however, that Debtor will not exercise or refrain from exercising any
         such right, as the case may be, if Secured Party gives it notice that,
         in Secured Party's judgment, such action would have a material adverse
         effect on the value of the Pledged Shares, the Partnership Rights, or
         the benefits to Secured Party of its security interest hereunder;

                 (ii)  Debtor may receive and retain any and all dividends or
         interest or distributions paid in cash in respect of the Pledged
         Shares and Partnership Rights to Payments; provided, however, that any
         and all dividends and interest paid or payable other than in cash in
         respect of, and instruments and other property received, receivable or
         otherwise distributed in respect of or in exchange for, any Pledged
         Shares or Partnership Rights shall be, and shall forthwith be
         delivered to Secured Party to hold as, Pledged Shares or Collateral
         and shall, if received by Debtor, be received in trust for the benefit
         of Secured Party, be segregated from the other property or funds of
         Debtor, and be forthwith delivered to Secured Party in the exact form
         received with any necessary indorsement or appropriate stock powers
         duly executed in blank, to be held by Secured Party as Collateral; and

                 (iii)  Secured Party will execute and deliver (or cause to be
         executed and delivered) to Debtor all such proxies and other
         instruments as Debtor may reasonably request for the purpose of
         enabling Debtor to exercise the voting and other rights which it is
         entitled to exercise pursuant to subsection (a)(i) of this section and
         to receive the dividends which it is authorized to receive and retain
         pursuant to subsection (a)(ii) of this section.





                                       16
<PAGE>   17
         (b)  Upon the occurrence and during the continuance of an Event of
Default:

                 (i)  all rights of Debtor to exercise the voting and other
         consensual rights which it would otherwise be entitled to exercise
         pursuant to subsection (a)(i) of this section shall, at the election
         of Secured Party, cease, and all such rights shall thereupon become
         vested in Secured Party which shall thereupon have the sole right to
         exercise such voting and consensual rights;

                 (ii)  all rights of Debtor to receive and retain the dividends
         and interest payments or any distributions of profits or other
         payments of any kind in respect of Partnership Rights to Payment which
         such Pledgor would otherwise be authorized to receive and retain
         pursuant to subsection (a)(ii) of this section shall, at the election
         of Secured Party, cease, and all such rights shall thereupon become
         vested in Secured Party which shall thereupon have the sole right to
         receive and hold as Pledged Shares or Collateral such dividends and
         interest payments and all such distributions and payments;

                 (iii)  without limiting the generality of the foregoing,
         Secured Party may at its option exercise any and all rights of
         conversion, exchange, subscription or any other rights, privileges or
         options pertaining to any of the Pledged Shares or Partnership Rights,
         other than voting rights pertaining to the Pledged Shares, Partnership
         Rights, or any part thereof, as if it were the absolute owner thereof,
         including, without limitation, the right to exchange, in its
         discretion, any and all of the Pledged Shares or Partnership Rights
         upon the merger, consolidation, reorganization, recapitalization or
         other adjustment of any Issuer, or upon the exercise by any Issuer of
         any right, privilege or option pertaining to any Pledged Shares or
         Partnership Rights, and, in connection therewith, to deposit and
         deliver any and all of the Pledged Shares and Partnership Rights with
         any committee, depository, transfer agent, registrar or other
         designated agent upon such terms and conditions as it may determine
         and any and all rights to dissolve any Issuer or to compel
         distribution of any Issuer's assets; and

                 (iv)  all dividends and interest payments and distributions of
         profits and other payments of any kind in respect of Partnership
         Rights to Payments which are received by Debtor contrary to the
         provisions of subsection (b)(ii) of this section shall be received in
         trust for the benefit of Secured Party, shall be segregated from other
         funds of Debtor, and shall be forthwith paid over to Secured Party as
         Pledged Shares in the exact form received, to be held by Secured Party
         as Collateral.

         Section 4.9.  Private Sale of Pledged Shares and Partnership Rights.
Debtor recognizes that Secured Party may deem it impracticable to effect a
public sale of all or any part of the Pledged Shares or Partnership Rights and
that Secured Party may, therefore, determine to make one or more private sales
of any such securities or Partnership Rights to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire such
securities or Partnership Rights for their own account, for investment and not
with a view to the distribution or resale thereof.  Debtor acknowledges that
any such private sale may be at prices and on terms less favorable to the
seller than the prices and other terms which might have been obtained at a
public sale and, notwithstanding the foregoing, agrees that such private sales
shall be deemed to have been made in a commercially reasonable manner and that
Secured Party shall have no obligation to delay sale of any such securities or
Partnership Rights for the period of time





                                       17
<PAGE>   18
necessary to permit the Issuer of such securities to register such securities
for, or their registration for, public sale under the Securities Act, which as
to the Partnership Rights shall be to the extent, if any, that it is applicable
thereto.  Debtor further acknowledges and agrees that any offer to sell such
securities or Partnership Rights which has been (i) publicly advertised on a
bona fide basis in a newspaper or other publication of general circulation in
the financial community of New York, New York (to the extent that such an offer
may be so advertised without prior registration under the Securities Act), or
(ii) made privately in the manner described above to not less than fifteen (15)
bona fide offerees shall be deemed to involve a "public sale" for the purposes
of Section 9.504(c) of the UCC (or any successor or similar, applicable
statutory provision) as then in effect in the State of New York,
notwithstanding that such sale may not constitute a "public offering" under the
Securities Act, and that Secured Party or one or more Lenders may, in such
event, bid for the purchase of such securities or Partnership Rights.

                          ARTICLE V. -- Miscellaneous

         Section 5.1.  Notices.  Any notice or communication required or
permitted hereunder shall be given as provided in the Credit Agreement.

         Section 5.2.  Amendments.  No amendment of any provision of this
Agreement shall be effective unless it is in writing and signed by Debtor and
Secured Party, and no waiver of any provision of this Agreement, and no consent
to any departure by Debtor therefrom, shall be effective unless it is in
writing and signed by Secured Party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given and to the extent specified in such writing.

         Section 5.3.  Preservation of Rights.  No failure on the part of
Secured Party or any Lender to exercise, and no delay in exercising, any right
hereunder or under any other Obligation Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right.
Neither the execution nor the delivery of this Agreement shall in any manner
impair or affect any other security for the Secured Obligations.  The rights
and remedies of Secured Party provided herein and in the other Obligation
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law.  The rights of Secured Party under any
Obligation Document against any party thereto are not conditional or contingent
on any attempt by Secured Party to exercise any of its rights under any other
Obligation Document against such party or against any other Person.

         Section 5.4.  Unenforceability.  Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or invalidity
without invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.

         Section 5.5.  Survival of Agreements.  All representations and
warranties of Debtor herein, and all covenants and agreements herein shall
survive the execution and delivery of this Agreement, the execution and
delivery of any other Obligation Documents and the creation of the Secured
Obligations.





                                       18
<PAGE>   19
         Section 5.6.  Other Liable Party.  Neither this Agreement nor the
exercise by Secured Party or the failure of Secured Party to exercise any
right, power or remedy conferred herein or by law shall be construed as
relieving any Other Liable Party from liability on the Secured Obligations or
any deficiency thereon.  This Agreement shall continue irrespective of the fact
that the liability of any Other Liable Party may have ceased or irrespective of
the validity or enforceability of any other Obligation Document to which Debtor
or any Other Liable Party may be a party, and notwithstanding the
reorganization, death, incapacity, bankruptcy or other event or proceeding
affecting any Other Liable Party.

         Section 5.7.  Binding Effect and Assignment.  This Agreement creates a
continuing security interest in the Collateral and (a) shall be binding on
Debtor and its successors and permitted assigns and (b) shall inure, together
with all rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors, transferees and assigns.  Without limiting
the generality of the foregoing, Secured Party or any Lender may (except as
otherwise provided in the Credit Agreement) pledge, assign or otherwise
transfer any or all of its rights under any or all of the Obligation Documents
to any other Person, and such other Person shall thereupon become vested with
all of the benefits in respect thereof granted to Secured Party, herein or
otherwise.  None of the rights or duties of Debtor hereunder may be assigned or
otherwise transferred without the prior written consent of Secured Party.

         Section 5.8.  Termination.  It is contemplated by the parties hereto
that there may be times when no Secured Obligations are outstanding, but
notwithstanding such occurrences, this Agreement shall remain valid and shall
be in full force and effect as to subsequent outstanding Secured Obligations.
Upon the satisfaction in full of the Secured Obligations, upon the termination
or expiration of the Credit Agreement and any other commitment of Lenders to
extend credit to Debtor, and upon written request for the termination hereof
delivered by Debtor to Secured Party, this Agreement and the security interest
created hereby shall terminate and all rights to the Collateral shall revert to
Debtor.  Secured Party will, upon Debtor's request and at Debtor's expense, (a)
return to Debtor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms hereof; and (b) execute
and deliver to Debtor such documents as Debtor shall reasonably request to
evidence such termination.

         Section 5.9.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State, except as
required by mandatory provisions of law and except to the extent that the
perfection and the effect of perfection or non-perfection of the security
interest created hereunder, in respect of any particular collateral, are
governed by the laws of a jurisdiction other than such State.

         Section 5.10.  Counterparts.  This Agreement may be separately
executed in any number of counterparts, all of which when so executed shall be
deemed to constitute one and the same Agreement.

         Section 5.11.  "Loan Document".  This Agreement is a "Loan Document",
as defined in the Credit Agreement, and, except as expressly provided herein to
the contrary, this Agreement is subject to all provisions of the Credit
Agreement governing such Loan Documents.





                                       19
<PAGE>   20
         THIS WRITTEN PLEDGE AGREEMENT AND THE OTHER 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.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]





                                       20
<PAGE>   21
         IN WITNESS WHEREOF, Debtor has caused this Agreement to be executed
and delivered this Agreement by its officer thereunto duly authorized, as of
the date first above written.


                                       UNITED STATES EXPLORATION, INC.


                                       By: /s/ BRUCE D. BENSON
                                          -------------------------------------
                                          Bruce D.  Benson, President and Chief
                                          Executive Officer





                                       21
<PAGE>   22
                                                                       EXHIBIT A

                      DESCRIPTION OF INITIAL PLEDGED STOCK

<TABLE>
<CAPTION>
Pledgor                               Issuer                                 Cert. No.        No. of Shares
-------                               ------                                 ---------        -------------
<S>                                   <C>                                    <C>              <C>
United States Exploration, Inc.,      Performance Petroleum Co.,                  6               50 common
 a Colorado corporation                a Colorado corporation                     7               50 common

United States Exploration, Inc.,      United States Gas Gathering                 42            1000 common
 a Colorado corporation                Co., Inc., an Oklahoma corporation

United States Exploration, Inc.,      Pacific Osage, Inc.,                        5           10,000 common
 a Colorado corporation                an Oklahoma corporation

United States Exploration, Inc.,      Producers Service Incorporated,             8              100 common
 a Colorado corporation                a Kansas corporation
</TABLE>

              DESCRIPTION OF  PARTNERSHIP INTERESTS TO BE ASSIGNED
                  PURSUANT TO THE PURCHASE AND SALE AGREEMENT

<TABLE>
<CAPTION>
Pledgor                               Issuer                                 Interest
-------                               ------                                 --------
<S>                                   <C>                                   <C>
United States Exploration, Inc.       Weld County Partnership                91% partnership interest
</TABLE>





                                       22
<PAGE>   23
                              FINANCING STATEMENT

         This instrument is prepared and is intended to be a Financing
Statement complying with the formal requisites therefor as set forth in the
Uniform Commercial Code.

         1.  The name and address of the debtor ("Debtor") is:

                 United States Exploration, Inc.
                 1560 Broadway, Suite 1900
                 Denver, Colorado 80202

         2.  The name and address of the secured party ("Secured Party") is:

                 ING (U.S.) Capital Corporation, as Agent for itself
                 and the parties who are Lenders from time to time
                 under the Credit Agreement described on Exhibit B
                 135 East 57th Street
                 New York, New York 10022-2101

         3.  This Financing Statement covers the following types or items of
property (collectively, the "Collateral"):

         All of the following, whether now or hereafter existing, which are
owned by Debtor or in which Debtor otherwise has any rights:

         (a)  Pledged Shares.  All of the following, whether now or hereafter
existing, which are owned by Debtor or in which Debtor otherwise has any
rights: (i) the shares of stock described in Exhibit A hereto, (ii) all other
shares of stock or other equity interests now owned or hereafter acquired by
Debtor whether of the Issuers listed on Exhibit A or any other Person, (iii)
all certificates representing any such shares, all options and other rights,
contractual or otherwise, at any time existing with respect to such shares, and
(iv) all dividends, cash, instruments and other property now or hereafter
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares (any and all such shares, certificates, options,
rights, dividends, cash, instruments and other property, collectively, the
"Pledged Shares").

         (b)  Partnership Rights.  All of the following (collectively, the
"Partnership Rights"), whether now or hereafter existing, which are owned by
Debtor or in which Debtor otherwise has any rights:

                 (i)  all interests and rights of Debtor arising under or
         pursuant to the Purchase and Sale Agreement dated April 9, 1998
         between Debtor and Union Pacific Resources Company ("Union Pacific")
         in respect of the Partnership, including without limitation any right
         to receive an assignment from Union Pacific of Union Pacific's
         interest in the Partnership, including without limitation any right to
         receive an assignment from Union Pacific of Union Pacific's interest
         in the Partnership and all interests and rights of Debtor in and to
         the Partnership if and when such an assignment is made;





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<PAGE>   24
                 (ii)  all proceeds, interest, profits, and other payments or
         rights to payment attributable to Debtor's interests in the
         Partnership, and all distributions, cash, instruments and other
         property now or hereafter received, receivable or otherwise made with
         respect to or in exchange for any interest of Debtor in the
         Partnership, including interim distributions, returns of capital, loan
         repayments, and payments made in liquidation of the Partnership, and
         whether or not the same arise or are payable under any partnership
         agreement or certificate forming the Partnership or any other
         agreement governing the Partnership or the relations among the
         partners in the Partnership (any and all such proceeds, interest,
         profits, payments, rights to payment, distributions, cash,
         instruments, other property, interim distributions, returns of
         capital, loan repayments, and payments made in liquidation,
         collectively, the "Partnership Rights to Payments", and any and all
         such partnership agreements, certificates, and other agreements,
         collectively, the "Partnership Agreements"); and

                 (iii)  all other interests and rights of Debtor in the
         Partnership, whether under the Partnership Agreements or otherwise,
         including without limitation any right to cause the dissolution of the
         Partnership or to appoint or nominate a successor to Debtor as a
         partner in the Partnership (all such other interests and rights,
         collectively, the "Other Partnership Rights").

         (c) Other Collateral.  All indebtedness, notes, bonds, convertible
securities or other obligations of any Issuer or any other Person and all other
general intangibles and accounts.

         (d)  Proceeds.  All proceeds of any and all of the foregoing
Collateral and, to the extent not otherwise included, all payments under
insurance (whether or not Secured Party is the loss payee thereof) or under any
indemnity, warranty or guaranty by reason of loss to or otherwise with respect
to any of the foregoing Collateral.

In each case, the foregoing shall be covered by this Financing Statement,
whether Debtor's ownership or other rights therein are presently held or
hereafter acquired and however Debtor's interests therein may arise or appear
(whether by ownership, security interest, claim or otherwise).

As used above, the following definitions have the following meanings:

         "Issuer" means any issuer of Pledged Shares and any successor of such
         Issuer.

         "Partnership" means the Weld County Partnership, a Colorado general
         partnership formed under and governed by the Weld County Partnership
         Agreement dated December 31, 1982 by and between Champlin Petroleum
         Company and True Oil Company, and any successors of any such
         partnerships.

         "Person" means an individual, corporation, partnership, association,
         joint stock company, trust, unincorporated organization or joint
         venture, or a court or governmental unit or any agency or subdivision
         thereof, or any other legally recognizable entity.





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<PAGE>   25


         4.  This Financing Statement is presented for filing to the Secretary
of State of Colorado.


                                       UNITED STATES EXPLORATION, INC.


                                       By:
                                          -------------------------------------
                                          Bruce D.  Benson, President and Chief
                                          Executive Officer





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<PAGE>   26
                                                                       EXHIBIT B
                                    LENDERS

Credit Agreement dated May 15, 1998 among United States Exploration, Inc.,
jointly and severally as Borrower, ING (U.S.) Capital Corporation, as Agent and
Certain Financial Institutions as Lenders.

ING (U.S.) Capital Corporation
135 East 57th Street
New York, New York 10022-2101