Document:

Exhibit 10.31

 

PLEDGE AGREEMENT

 

This Pledge Agreement (“Agreement”),
dated March 20, 2009, is made by Evergreen Operations, LLC a Delaware
limited liability company (“Pledgor”) in
favor of Centurion Credit Funding LLC (“Secured Party”).

 

Background

 

A.            To
induce Secured Party to extend credit to Pledgor, Evergreen Energy Inc., and
Buckeye Industrial Mining Co. (collectively, the “Companies”),
as evidenced by that certain Note Purchase Agreement of even date herewith
among Companies and Secured Party (as it may be amended, supplemented, replaced
or restated from time to time, the “Purchase Agreement”),
Pledgor executes and delivers this Agreement to Secured Party.  All capitalized terms used herein and not
otherwise defined shall have the same meanings assigned to such terms in the
Purchase Agreement, or if not expressly defined in the Purchase Agreement, the
Security Agreement.

 

B.            This
Agreement is given and is intended to provide additional security for the
Obligations.

 

NOW THEREFORE, for other good and sufficient
consideration, the receipt of which is hereby acknowledged, Pledgor, intending
to be legally bound hereby, covenants and agrees as follows:

 

1.             Pledgor, for the purpose of
granting a continuing lien and security interest, does hereby assign, pledge,
hypothecate, deliver and set over to Secured Party, its successors and assigns,
the investment property described on Schedule I attached hereto and made
part hereof, together with any additions, exchanges, replacements and
substitutions therefor, dividends and distributions from time to time with
respect thereto, and the proceeds thereof, including, without limitation, the
following property (collectively, the “Pledged Collateral”):
all of the shares of capital stock in the corporation listed on Schedule I
attached hereto, whether now owned or hereafter acquired by such Pledgor or in
which such Pledgor now or hereafter has any rights, options or warrants,
together with all certificates representing such shares and all rights (but
none of the obligations) under or arising out of the applicable organizational
documents of such corporation.

 

2.             The pledge and security interest
described herein shall continue in effect to secure all Obligations from time
to time incurred or arising unless and until all Obligations have been
indefeasibly paid and satisfied in full in cash and the Purchase Agreement has
been terminated.

 

3.             Pledgor hereby represents and
warrants that:

 

(a)           Except as pledged herein, Pledgor has
not sold, assigned, transferred, pledged or granted any option or security
interest in or otherwise hypothecated the Pledged Collateral in any manner
whatsoever and the Pledged Collateral is pledged herewith free and clear of any
and all liens, security interests, encumbrances, claims, pledges, restrictions,
legends, and options;

 

(b)           Pledgor has the full power and
authority to execute, deliver, and perform under this Agreement and to pledge
the Pledged Collateral hereunder;

 

(c)           This Agreement constitutes the valid
and binding obligation of Pledgor, enforceable in accordance with its terms and
the pledge of the Pledged Collateral referred to herein is 

 

 

not in violation of and shall
not create any default under any agreement, undertaking or obligation of
Pledgor;

 

(d)           The Pledged Collateral has been duly and
validly authorized and issued by the issuer thereof and such Pledged Collateral
is fully paid for and non-assessable;

 

(e)           Pledgor is pledging hereunder all of
the Pledgor’s interest and ownership in all entities listed on Schedule I
attached hereto;

 

(f)            Contemporaneously with the execution
hereof, Pledgor is delivering to Secured Party all certificates representing or
evidencing the Pledged Collateral, accompanied by duly executed instruments of
transfer or assignments in blank, to be held by Secured Party in accordance
with the terms hereof; and

 

4.             If an Event of Default occurs and
is continuing under the Purchase Agreement, the Notes or any other Transaction
Document, then Secured Party may, at its sole option in accordance with the
terms of the Purchase Agreement, exercise from time to time with respect to the
Pledged Collateral any and/or all rights and remedies available to it
hereunder, under the Uniform Commercial Code as adopted in the State of New
York (“UCC”), or otherwise available to it, at
law or in equity, including, without limitation, the right to dispose of the
Pledged Collateral at public or private sale(s) or other proceedings and
Pledgor agrees that, if permitted by law, Secured Party or its nominee may
become the purchaser at any such sale(s).

 

5.             (a)           In
addition to all other rights granted to Secured Party herein or otherwise
available at law or in equity, Secured Party shall have the following rights,
each of which may be exercised at Secured Party’s sole discretion exercised in
good faith (but without any obligation to do so), at any time following the
occurrence and during the continuance of an Event of Default under the Purchase
Agreement, the Notes or any other Transaction Document, without further consent
of Pledgor: (i) transfer the whole or any part of the Pledged Collateral
into the name of itself or its nominee or to conduct a sale of the Pledged
Collateral pursuant to the UCC or pursuant to any other applicable law; (ii) vote
the Pledged Collateral; (iii) notify the persons obligated on any of the
Pledged Collateral to make payment to Secured Party of any amounts due or to
become due thereon; and (iv) release, surrender or exchange any of the
Pledged Collateral at any time, or to compromise any dispute with respect to
the same.  Secured Party may proceed
against the Pledged Collateral, or any other collateral securing the
Obligations, in any order, and against Pledgor and any other obligor
(including, without limitation, the Companies), jointly and/or severally, in
any order to satisfy the Obligations. 
Pledgor waives and releases any right to require Secured Party to first
collect any of the Obligations secured hereby from any other collateral of
Pledgor or any other party (including, without limitation, the Companies)
securing the Obligations under any theory of marshalling of assets, or
otherwise.  All rights and remedies of
Secured Party are cumulative, not alternative.

 

(b)           Pledgor hereby irrevocably appoints
Secured Party its attorney-in-fact, subject to the terms hereof, following the
occurrence and during the continuance of an Event of Default under the Purchase
Agreement, the Notes or any other Transaction Document, at Secured Party’s
option, (i) to effectuate the transfer of the Pledged Collateral on the
books of the issuer thereof to the name of Secured Party or to the name of
Secured Party’s nominee, designee or assignee; (ii) to endorse and collect
checks payable to such Pledgor representing distributions or other payments on
the Pledged Collateral; and (iii) to carry out the terms and provisions
hereof.

 

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6.             The proceeds of any Pledged
Collateral received by Secured Party at any time, whether from the sale of
Pledged Collateral or otherwise, may be applied to or on account of the
Obligations and in such order as Secured Party may elect.  In addition, Secured Party may apply any such
proceeds to or on account of the payment of all costs, fees and expenses
(including, without limitation, reasonable attorneys’ fees) which may be
incurred by Secured Party.

 

7.             Pledgor recognizes that Secured
Party may be unable to effect, or may effect only after such delay which would
adversely affect the value that might be realized from the Pledged Collateral,
a public sale of all or part of the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (“Securities Act”) and may be compelled to resort to one or
more private sales to a restricted group of purchasers who 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.  Pledgor agrees that any such private sale may
be at prices and on terms less favorable to Secured Party or the seller than if
sold at public sales, and therefore recognizes and confirms that such private
sales shall not be deemed to have been made in a commercially unreasonable
manner solely because they were made privately. 
Pledgor agrees that Secured Party has no obligation to delay the sale of
any such securities for the period of time necessary to permit the issuer of
such securities to register such securities for public sale under the
Securities Act.

 

8.             In the event that any change is
made or declared in the capital structure of the corporation listed on Schedule
I attached hereto, or Pledgor acquires or in any other manner receives
additional shares in such entity, or any option included within the Pledged
Collateral is exercised, any and all new, substituted or additional
certificates representing or evidencing such shares which have been issued by
reason of any such change or exercise, shall be delivered to and held by
Secured Party under the terms hereof in the same manner as the Pledged
Collateral originally pledged hereunder.

 

9.             So long as no Event of Default has
occurred and is continuing under the Purchase Agreement, the Notes or any other
Transaction Document, and, until Secured Party notifies Pledgor in writing of
the exercise of its rights hereunder, Pledgor shall retain the sole right to
vote the Pledged Collateral and exercise all rights of ownership with respect
to all corporate questions for all purposes not inconsistent with the terms
hereof.

 

10.           Secured Party shall have no
obligation to take any steps to preserve, protect or defend the rights of
Pledgor or Secured Party in the Pledged Collateral against other parties.  Secured Party shall have no obligation to
sell or otherwise deal with the Pledged Collateral at any time for any reason, whether
or not upon request of any Pledgor, and whether or not the value of the Pledged
Collateral, in the opinion of Secured Party or Pledgor, is more or less than
the aggregate amount of the Obligations secured hereby, and any such refusal or
inaction by Secured Party shall not be deemed a breach of any duty which
Secured Party may have under law to preserve the Pledged Collateral.  Except as provided by applicable law, no
duty, obligation or responsibility of any kind is intended to be delegated to
or assumed by Secured Party at any time with respect to the Pledged Collateral.

 

11.           To the extent Secured Party is
required by law to give Pledgor prior notice of any public or private sale, or
other disposition of the Pledged Collateral, Pledgor agrees that ten (10) days
prior written notice to Pledgor shall be a commercially reasonable and
sufficient notice of such sale or other intended disposition.  Pledgor further recognizes and agrees that if
the Pledged Collateral, or a portion thereof, threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Pledgor shall
not be entitled to any prior notice of sale or other intended disposition.

 

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12.           Pledgor shall indemnify, defend and
hold harmless Secured Party from and against any and all claims, losses and
liabilities resulting from any breach by Pledgor of Pledgor’s, or any of their,
representations and covenants under this Agreement.

 

13.           Pledgor hereby waives notice of (a) acceptance
of this Agreement, (b) the existence and incurrence from time to time of
any Obligations under the Purchase Agreement, the Notes or any other
Transaction Document, (c) the existence of any Event of Default, the
making of demand, or the taking of any action by Secured Party under the
Purchase Agreement, the Notes or any other Transaction Document and (d) demand
and default hereunder.

 

14.           This Agreement shall remain in full
force and effect and shall not be limited, impaired or otherwise affected in any
way by reason of (a) any delay in making demand on Pledgor for, or delay
in enforcing or failure to enforce, performance or payment of Companies’
Obligations, (b) any failure, neglect or omission on Secured Party’s part
to perfect any lien upon, protect, exercise rights against, or realize on, any
property of Pledgor, any Borrower or any other party securing the Obligations, (c) any
failure to obtain, retain or preserve, or the lack of prior enforcement of, any
rights against any person or persons or in any property, (d) the
invalidity or unenforceability of any Obligations or rights in any Collateral
under the Purchase Agreement, the Notes, the Security Agreement, the Mortgage
or any other Transaction Document, (e) the existence or nonexistence of
any defenses which may be available to Companies, or any of them, with respect
to the Obligations, or (f) the commencement of any bankruptcy,
reorganization, liquidation, dissolution or receivership proceeding or case
filed by or against any Borrower.

 

15.           Pledgor covenants and agrees that
Pledgor shall not, without the prior written consent of Secured Party, sell,
encumber or grant any lien, security interest or option on or with respect to
any of the Pledged Collateral except as permitted in the Purchase Agreement.

 

16.           Pledgor hereby authorizes and hereby
instructs the issuer of the Pledged Collateral to comply with any instruction
received by it from Secured Party in writing that states that an Event of
Default has occurred and is continuing and, without any other or further
instructions from Pledgor, and Pledgor agrees that the issuer shall be fully
protected in so complying.

 

17.           Any failure of or delay by Secured
Party to exercise any right or remedy hereunder shall not be construed as a
waiver of the right to exercise the same or any other right or remedy at any
other time.

 

18.           This Agreement constitutes the entire
agreement between the parties hereto regarding the subject matter hereof and
may be modified only by a written instrument signed by Pledgor and Secured
Party.

 

19.           This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York.  Any judicial proceeding brought by or against
Pledgor with respect to this Agreement or any related agreement may be brought
in any court of competent jurisdiction in the State of New York, United States
of America, and, by execution and delivery of this Agreement, Pledgor accepts
for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement.  Pledgor hereby
waives personal service of any and all process upon it and 

 

4

 

consents that all such service
of process may be made by registered mail (return receipt requested) or by
nationally recognized overnight courier directed to Pledgor at their address as
set forth on the signature page hereto, unless Pledgor notifies Secured
Party of a change in such address, and service so made shall be deemed
completed three (3) days after the same shall have been so deposited in
the mail of the United States of America. 
Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of Secured Party to bring proceedings
against Pledgor in the courts of any other jurisdiction.  Pledgor waives any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens.  Pledgor waives the right to remove any
judicial proceeding brought against such Pledgor in any state court to any
federal court.  Any judicial proceeding
by Pledgor against Secured Party involving, directly or indirectly, any matter
or claim in any way arising out of, related to or connected with this Agreement
or any related agreement, shall be brought only in a federal or state court
located in New York.

 

20.           All communications which Secured
Party may provide to Pledgor herein shall be sent to Pledgor at the address set
forth below in writing, and may be delivered in a manner described in Section 7.4
of the Purchase Agreement.

 

21.           This Agreement shall be binding upon
and inure to the benefit of the parties hereto, and their respective successors
and assigns.

 

22.           PLEDGOR HEREBY WAIVES THE RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE PURCHASE AGREEMENT, THE
OBLIGATIONS OR THE PLEDGED COLLATERAL.

 

SIGNATURE ON FOLLOWING PAGE

 

5

 

IN WITNESS WHEREOF, this Agreement has been
executed and delivered as of the date first set forth above.

 

 

	
   

  	
  EVERGREEN OPERATIONS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Diana L.
  Kubik

  
	
   

  	
  Name:

  	
  Diana L.
  Kubik

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1225 17th Street, Suite 1300

  
	
   

  	
   

  	
  Denver, Colorado 80202

  
	
   

  	
   

  	
  Attn: Chief Financial Officer

  
	
   

  	
   

  	
  Facsimile: 303-293-8430

  
				

 

[SIGNATURE PAGE TO PLEDGE AGREEMENT]

 

S-1

 

SCHEDULE I

 

Pledged Collateral

 

The following
Collateral is hereby pledged by Pledgor to Secured Party pursuant to the
Collateral Pledge Agreement to which this Schedule is attached:

 

Pledged Shares

 

	
  Name of Corporation

  	
   

  	
  State

  of

  Incorp.

  	
   

  	
  Total

  Number

  of

  Shares

  Authorized

  to be

  Issued

  	
   

  	
  Total

  Number

  Of

  Shares

  Issued

  	
   

  	
  Number

  of

  Shares

  Issued

  to

  Owner

  	
   

  	
  Class

  of

  Shares

  Issued

  to

  Owner

  	
   

  	
  Stock

  Certificate

  Number(s)

  	
   

  	
  Owner

  of

  Shares

  	
   

  
	
  Buckeye Industrial Mining Co.

  	
   

  	
  OH

  	
   

  	
  100

  	
   

  	
  100

  	
   

  	
  100

  	
   

  	
  Common Stock

  	
   

  	
  1

  	
   

  	
  PledgorExhibit 10.32

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (this “Agreement”),
dated as of March 20, 2009, among the Grantors listed on the signature pages hereof
and those additional entities that hereafter become parties hereto by executing
the form of Supplement attached hereto as Annex 1 (collectively, jointly
and severally, the “Grantors” and each, individually, a “Grantor”),
and CENTURION CREDIT FUNDING LLC (together
with its successors and assigns, the “Secured Party”).

 

W I T N E S S E T H:

 

WHEREAS, the Secured Party, Evergreen Energy Inc.,
Evergreen Operations, LLC, and Buckeye Industrial Mining Co. (collectively, the
“Companies” and each individually referred to as a “Company”)  are parties to that certain Note Purchase
Agreement bearing even date herewith (as may be amended, restated,
supplemented, replaced or otherwise modified from time to time, the “Purchase
Agreement”), and

 

WHEREAS, pursuant to the terms and conditions of the
Purchase Agreement, the Secured Party has agreed to extend loans to the
Companies, repayment of which is evidenced by the Notes, and

 

WHEREAS, in order to induce Secured Party to enter
into the Purchase Agreement and the other Transaction Documents and to extend
the loans pursuant to the Purchase Agreement, the Grantors have agreed to
execute and deliver to the Secured Party this Agreement and other collateral
documents and to grant the Secured Party a continuing security interest in and
to the Collateral in order to secure the prompt and complete payment,
observance and performance of, among other things, the Secured Obligations, and

 

NOW,
THEREFORE, for and in
consideration of the recitals made above and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Defined Terms. All
capitalized terms used herein (including in the preamble and recitals hereof)
without definition shall have the meanings ascribed thereto in the Notes, or if
not expressly defined in the Notes, then in the Purchase Agreement.  Any terms used in this Agreement that are
defined in the Code (whether or not capitalized) shall be construed and defined
as set forth in the Code unless otherwise defined herein or in the Notes or the
Purchase Agreement; provided, however, that if the Code is used
to define any term used herein and if such term is defined differently in
different Articles of the Code, the definition of such term contained in Article 9
of the Code shall govern. In addition to those terms defined elsewhere in this
Agreement, as used in this Agreement, the following terms shall have the
following meanings:

 

(a)                                  “Account”
means an account (as that term is defined in the Code).

 

 

(b)                                 “Account
Debtor” means an account debtor (as that term is defined in the Code).

 

(c)                                  “Bankruptcy
Code” means Title 11 of the United States Code entitled “Bankruptcy,” as
now and hereafter in effect, or any successor statute.

 

(d)                                 “Books”
means books and records (including each Grantor’s Records indicating,
summarizing, or evidencing such Grantor’s assets (including the Collateral) or
liabilities, each Grantor’s Records relating to such Grantor’s business
operations or financial condition, and each Grantor’s goods or General
Intangibles related to such information).

 

(e)                                  “Chattel
Paper” means chattel paper (as that term is defined in the Code) and
includes tangible chattel paper and electronic chattel paper.

 

(f)                                    “Closing
Date” has the meaning specified therefor in the Purchase Agreement.

 

(g)                                 “Code”
means the New York Uniform Commercial Code, as in effect from time to time; provided,
however, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection, priority, or remedies with
respect to Secured Party’s Liens on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “Code” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority, or remedies.

 

(h)                                 “Collateral”
has the meaning specified therefor in Section 2; provided, however,
that “Collateral” shall not include any Excluded Property; and provided,
further, that if and when any property shall cease to be Excluded Property,
such property shall be deemed at all times from and after the date hereof to
constitute Collateral.

 

(i)                                     “Commercial
Tort Claims” means commercial tort claims (as that term is defined in the
Code), and includes those commercial tort claims listed on Schedule 9
attached hereto.

 

(j)                                     “Company”
and “Companies” have the meaning specified therefor in the recitals to
this Agreement.

 

(k)                                  “Controlled
Foreign Corporation” shall mean “controlled foreign corporation” as defined
in the IRC.

 

(l)                                     “Copyrights”
means copyrights and copyright registrations, and also includes (i) the
copyright registrations and applications listed on Schedule 2 attached
hereto and made a part hereof (as the same may be amended or modified from time
to time), (ii) all extensions or renewals thereof, (iii) all income,
royalties, damage awards and payments now and hereafter due or payable under
and with respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements 

 

2

 

thereof, (iv) the right to sue for past,
present and future infringements thereof, and (v) all of each Grantor’s
rights corresponding thereto throughout the world.

 

(m)                               “Copyright
Security Agreement” means each Copyright Security Agreement among Grantors,
or any of them, and Secured Party in substantially the form of Exhibit A
attached hereto.

 

(n)                                 “Deposit
Account” means a deposit account (as that term is defined in the Code).

 

(o)                                 “Equipment”
means equipment (as that term is defined in the Code).

 

(p)                                 “Excluded
Property” means, collectively, (i) the voting Stock of any Controlled
Foreign Corporation excluded from the definition of Pledged Interests, (ii) any
permit, lease, license, contract, instrument or other agreement held by any
Grantor that prohibits or requires the consent of any Person other than the
Companies or their respective Subsidiaries which consent has not been obtained
as a condition to the creation by such Grantor of a Lien thereon, or any
permit, lease, license, contract or other agreement held by any Grantor to the
extent that any applicable law, treaty, rule, or regulation or any change in
the interpretation or application thereof by any Governmental Authority
applicable thereto prohibits the creation of a Lien thereon, but only, in each
case, to the extent, and for so long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the Code, (iii) any
“intent to use” Trademark applications for which a statement of use has not
been filed (but only until such statement is filed), and (iv) Equipment
owned by any Grantor that is subject to a purchase money Lien or capital lease
(in each case, to the extent permitted under the Purchase Agreement) if the
contract or other agreement in which such Lien is granted (or in the
documentation providing for such capital lease) prohibits or requires the
consent of any Person which consent has not been obtained other than the
Companies or their respective Subsidiaries as a condition to the creation of
any other Lien on such Equipment; provided, however, Excluded Property shall
not include any Collateral described in subsection (ii) and (iv) of
this subsection (p) to the extent that any such consent or lapse,
as applicable, (x) has not been waived or (y) would be rendered
ineffective pursuant to Sections 9-406, 9-408, 9-409 of the Code or other
applicable provisions of the Code of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code, when applicable) or principles
of equity; provided, that immediately upon the ineffectiveness, lapse,
termination or waiver of any such provision, the Collateral shall include, and
each such Grantor shall be deemed to have granted a security interest in, all
such right, title and interest as if such provision had never been in
effect.  “Excluded Property” shall not
include any Proceeds, substitutions or replacements of Excluded Property (unless
such Proceeds, substitutions or replacements would constitute Excluded
Property).

 

(q)                                 “Event of
Default” has the meaning specified therefor in the Notes.

 

(r)                                    “General
Intangibles” means general intangibles (as that term is defined in the
Code), and, in any event, includes payment intangibles, contract rights, rights
to payment, rights arising under common law, statutes, or regulations, choses
or things in action, goodwill 

 

3

 

(including the goodwill associated with any
Trademark), Patents, Trademarks, Copyrights, URLs and domain names, industrial
designs and other Intellectual Property or rights therein or applications
therefor, whether under license or otherwise, programs, programming materials,
blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, including Intellectual Property
Licenses, infringement claims, computer programs, information contained on
computer disks or tapes, software, literature, reports, catalogs, pension plan
refunds, pension plan refund claims, insurance premium rebates, tax refunds,
and tax refund claims, interests in a partnership or limited liability company
which do not constitute a security under Article 8 of the Code, and any
other personal property other than Commercial Tort Claims, money, Accounts,
Chattel Paper, Deposit Accounts, goods, Investment Related Property, Negotiable
Collateral, and oil, gas, or other minerals before extraction.

 

(s)                                  “Governmental
Authority” means any federal, state, local, or other governmental or
administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.

 

(t)                                    “Grantor”
and “Grantors” have the meanings specified therefor in the recitals to
this Agreement.

 

(u)                                 “Insolvency
Proceeding” means any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement of other similar relief.

 

(v)                                 “Intellectual
Property” means Patents, Copyrights, Trademarks, the goodwill associated
with such Trademarks, trade secrets and confidential and proprietary customer
lists, and Intellectual Property Licenses.

 

(w)                               “Intellectual
Property Licenses” means rights under or interests in any Patent,
Trademark, Copyright or other Intellectual Property, including software license
agreements with any other party (other than commercial off the shelf software),
whether the applicable Grantor is a licensee or licensor under any such license
agreement, including the license agreements listed on Schedule 3 attached
hereto and made a part hereof.

 

(x)                                   “Inventory”
means inventory (as that term is defined in the Code).

 

(y)                                 “Investment
Related Property” means (i) investment property (as that term is
defined in the Code), and (ii) all of the following (regardless of whether
classified as investment property under the Code):  all Pledged Interests, Pledged Operating
Agreements, and Pledged Partnership Agreements.

 

(z)                                   “Mortgage”
has the meaning specified therefor in the Purchase Agreement.

 

4

 

(aa)                            “Negotiable
Collateral” means letters of credit, letter-of-credit rights, instruments,
promissory notes, drafts, and documents.

 

(bb)                          “Notes”
has the meaning specified therefor in the Purchase Agreement.

 

(cc)                            “Obligations”
means all of the liabilities and obligations (primary, secondary, direct,
contingent, sole, joint or several) due or to become due, or that are now or
may be hereafter contracted or acquired, or owing, of any Grantor to the
Secured Party under this Agreement, the Notes, the Purchase Agreement, the
Mortgage, the Pledge Agreement, the other Transaction Documents, and any other
instruments, agreements or other documents executed and/or delivered in
connection herewith or therewith, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and
whether or not from time to time decreased or extinguished and later increased,
created or incurred, and all or any portion of such obligations or liabilities
that are paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from the Secured Party as a preference,
fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.  Without limiting the generality of the
foregoing, the term “Obligations” shall include, without limitation: (i) principal
of, and interest on, the Notes and the loans extended pursuant thereto
(including any interest that accrues after the commencement of an Insolvency
Proceeding regardless of whether allowed or allowable in whole or in part as a
claim in such Insolvency Proceeding); (ii) any and all other fees, legal
fees and other expenses, indemnities, costs, obligations and liabilities of the
Grantors from time to time under or in connection with this Agreement, the
Notes, the Purchase Agreement, the Pledge Agreement, the Mortgage, the other
Transaction Documents, and any other instruments, agreements or other documents
executed and/or delivered in connection herewith or therewith; (iii) payment
of the Major Transaction Prepayment Price (as defined in the Notes), and (iv) all
amounts in respect of the foregoing that would be payable but for the fact that
the obligations to pay such amounts are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
any Grantor.  Any reference in this
Agreement or in the Transaction Documents to the Obligations shall include all
or any portion thereof and any extensions, modifications, renewals or
alterations thereof, both prior and subsequent to any Insolvency Proceeding.

 

(dd)                          “Organizational
Documents” means, with respect to each Grantor, the documents by which such
Grantor was organized (such as a certificate of incorporation, certificate of
limited partnership or articles of organization, and including, without
limitation, any certificates of designation for preferred stock or other forms
of preferred equity) and which relate to the internal governance of such Grantor
(such as bylaws, a partnership agreement or an operating, limited liability or
members agreement).

 

(ee)                            “Patents”
means patents and patent applications, and also includes (i) the patents
and patent applications listed on Schedule 4 attached hereto and made a
part hereof (as the same may be amended or modified from time to time), (ii) all
divisions, continuations, continuations-in-part, reissues and extensions
thereof, (iii) all income, royalties, damage awards and payments now and
hereafter due or payable under and with respect thereto, including 

 

5

 

payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements
thereof, (iv) the right to sue for past, present and future infringements
thereof, and (v) all of each Grantor’s rights corresponding thereto
throughout the world.

 

(ff)                                “Patent
Security Agreement” means each Patent Security Agreement among Grantors, or
any of them, and Secured Party in substantially the form of Exhibit B
attached hereto.

 

(gg)                          “Permitted
Encumbrances” has the meaning specified therefor in the Purchase Agreement.

 

(hh)                          “Person”
has the meaning specified therefor in the Purchase Agreement.

 

(ii)                                  “Pledged
Companies” means, each Person listed on Schedule 5 hereto as a “Pledged
Company”, together with each other Person, all or a portion of whose Stock, is
acquired or otherwise owned by a Grantor after the Closing Date.

 

(jj)                                  “Pledged
Interests” means all of each Grantor’s right, title and interest in and to
all of the Stock now or hereafter owned by such Grantor, regardless of class or
designation, including all substitutions therefor and replacements thereof, all
proceeds thereof and all rights relating thereto, also including any certificates
representing the Stock, the right to receive any certificates representing any
of the Stock, all warrants, options, share appreciation rights and other
rights, contractual or otherwise, in respect thereof, and the right to receive
dividends, distributions of income, profits, surplus, or other compensation by
way of income or liquidating distributions, in cash or in kind, and cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of, on
account of, or in exchange for any or all of the foregoing.  Notwithstanding anything to the contrary
contained herein, in no event shall the Pledged Interests include more than 65%
of the voting Stock of any Controlled Foreign Corporation if and only for so
long as a pledge of more than 65% of the voting Stock of such Controlled
Foreign Corporation would have adverse United States federal income tax
consequences to any Grantor.

 

(kk)                            “Pledged
Interests Addendum” means a Pledged Interests Addendum substantially in the
form of Exhibit C to this Agreement.

 

(ll)                                  “Pledged
Operating Agreements” means all of each Grantor’s rights, powers, and
remedies under the limited liability company operating agreements of each of
the Pledged Companies that are limited liability companies.

 

(mm)                      “Pledged
Partnership Agreements” means all of each Grantor’s rights, powers, and
remedies under the partnership agreements of each of the Pledged Companies that
are partnerships.

 

(nn)                          “Proceeds”
has the meaning specified therefor in Section 2.

 

6

 

(oo)                          “Purchase
Agreement” has the meaning specified therefor in the recitals to this
Agreement.

 

(pp)                          “Real
Property” means any estates or interests in real property now owned or
hereafter acquired by any Grantor and the improvements thereto.

 

(qq)                          “Records”
means information that is inscribed on a tangible medium or which is stored in
an electronic or other medium and is retrievable in perceivable form.

 

(rr)                                “Security
Interest” has the meaning specified therefor in Section 2.

 

(ss)                            “Secured
Obligations” means each and all of the following: (a) all of the
present and future obligations of Grantors arising from this Agreement, the
Notes, the Purchase Agreement, or the other Transaction Documents, and (b) all
Obligations of the Company, including, in the case of each of clauses (a) and
(b), reasonable attorneys fees and expenses and any interest, fees, or expenses
that accrue after the filing of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any Insolvency
Proceeding in each case, subject to any applicable limitations expressly
provided in the Transaction Documents.

 

(tt)                                “Secured
Party’s Liens” means the Liens granted by the Grantors to Secured Party
under the Transaction Documents.

 

(uu)                          “Securities
Account” means a securities account (as that term is defined in the Code).

 

(vv)                          “Stock”
means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the Commission under the Exchange Act).

 

(ww)                      “Supporting
Obligations” means supporting obligations (as such term is defined in the
Code).

 

(xx)                              “Trademarks”
means trademarks, trade names, trademark applications, service marks, service
mark applications, and also includes (i) the registered or applied for
trade names, trademarks, trademark applications, service marks, and service
mark applications listed on Schedule 6 attached hereto and made a part
hereof (as the same may be amended or modified from time to time), and (ii) all
renewals thereof, (iii) all income, royalties, damage awards and payments
now and hereafter due or payable under and with respect thereto, including
payments under all licenses entered into in connection therewith and damages
and payments for past or future (A) infringements and dilutions thereof
and (B) injury to the goodwill associated therewith, (iv) the right
to sue for past, present and future (A) infringements and dilutions
thereof and (B) injury to the goodwill associated therewith, (v) the
goodwill of each Grantor’s business 

 

7

 

symbolized by the foregoing or connected
therewith, and (v) all of each Grantor’s rights corresponding thereto
throughout the world.

 

(yy)                          “Trademark
Security Agreement” means each Trademark Security Agreement among Grantors,
or any of them, and Secured Party in substantially the form of Exhibit D
attached hereto.

 

(zz)                              “Transaction
Documents” has the meaning specified therefor in the Purchase Agreement.

 

(aaa)                      “URL”
means “uniform resource locator,” an internet web address.

 

2.                                       Grant of
Security.  Each
Grantor hereby unconditionally grants, assigns, and pledges to Secured Party a
continuing security interest (herein referred to as the “Security Interest”)
in all such Grantor’s right, title and interest in and to its personal
property, tangible or intangible, of such Grantor whether now owned or
hereafter acquired or arising and wherever located, including such Grantor’s
right, title, and interest in and to the following, whether now owned or
hereafter acquired or arising and wherever located (the “Collateral”):

 

(a)                                  all of such
Grantor’s Accounts;

 

(b)                                 all of such
Grantor’s Books;

 

(c)                                  all of such
Grantor’s Chattel Paper;

 

(d)                                 all of such
Grantor’s Deposit Accounts;

 

(e)                                  all of such
Grantor’s Equipment and fixtures;

 

(f)                                    all of such
Grantor’s General Intangibles;

 

(g)                                 all of such
Grantor’s Inventory;

 

(h)                                 all of such
Grantor’s Investment Related Property;

 

(i)                                     all of such
Grantor’s Negotiable Collateral;

 

(j)                                     all of such
Grantor’s rights in respect of Supporting Obligations;

 

(k)                                  all of such
Grantor’s Commercial Tort Claims;

 

(l)                                     all of such
Grantor’s money, cash equivalents, or other assets of each such Grantor that
now or hereafter come into the possession, custody, or control of Secured
Party;

 

(m)                               all of the
proceeds and products, whether tangible or intangible, of any of the foregoing,
including proceeds of insurance or Commercial Tort Claims covering or relating
to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper,
Deposit Accounts, 

 

8

 

Equipment, General Intangibles, Inventory,
Investment Related Property, Negotiable Collateral, Supporting Obligations,
money, or other tangible or intangible property resulting from the sale, lease,
license, exchange, collection, or other disposition of any of the foregoing,
the proceeds of any award in condemnation with respect to any of the foregoing,
any rebates or refunds, whether for taxes or otherwise, and all proceeds of any
such proceeds, or any portion thereof or interest therein, and the proceeds
thereof, and all proceeds of any loss of, damage to, or destruction of the
above, whether insured or not insured, and, to the extent not otherwise included,
any indemnity, warranty, or guaranty payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the “Proceeds”).  Without limiting the generality of the
foregoing, the term “Proceeds” includes whatever is receivable or received when
Investment Related Property or proceeds are sold, exchanged, collected, or
otherwise disposed of, whether such disposition is voluntary or involuntary,
and includes proceeds of any indemnity or guaranty payable to any Grantor or
Secured Party from time to time with respect to any of the Investment Related
Property.

 

3.                                       Security for
Obligations.  This
Agreement and the Security Interest created hereby secures the payment and
performance of the Secured Obligations, whether now existing or arising
hereafter.  Without limiting the
generality of the foregoing, this Agreement secures the payment of all amounts
which constitute part of the Secured Obligations and would be owed by Grantors,
or any of them, to Secured Party but for the fact that they are unenforceable
or not allowable due to the existence of an Insolvency Proceeding involving any
Grantor.

 

4.                                       Grantors Remain
Liable.  Anything herein to the
contrary notwithstanding, (a) each of the Grantors shall remain liable
under the contracts and agreements included in the Collateral, including any
Pledged Operating Agreements and any Pledged Partnership Agreements, to perform
all of the duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by Secured Party of any
of the rights hereunder shall not release any Grantor from any of its duties or
obligations under such contracts and agreements included in the Collateral, and
(c) Secured Party shall not have any obligation or liability under such
contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of any Grantors thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.  Until an Event of Default shall occur and be
continuing, except as otherwise provided in this Agreement, the Notes, the
Purchase Agreement, or other Transaction Documents, Grantors shall have the
right to possession and enjoyment of the Collateral for the purpose of
conducting the ordinary course of their respective businesses, subject to and
upon the terms hereof and of the Notes, the Purchase Agreement and the other
Transaction Documents.  Without limiting
the generality of the foregoing, it is the intention of the parties hereto that
record and beneficial ownership of the Pledged Interests, including all voting,
consensual, and dividend rights, shall remain in the applicable Grantor until
the occurrence and continuance of an Event of Default, and until Secured Party
shall notify the applicable Grantor of Secured Party’s exercise of its voting,
consensual, or dividend rights with respect to the Pledged Interests pursuant
to Section 15 hereof.

 

5.                                       Representations
and Warranties.  As of each
Closing, each Grantor hereby represents and warrants as follows:

 

9

 

(a)                                  The exact legal
name, jurisdiction of incorporation, organization or formation, organizational
identification number, if any, and chief executive office of each of the
Grantors is set forth on Schedule 1 
attached hereto.  No Grantor has
trade names except as set forth on Schedule 1 attached hereto.  No Grantor has used any name other than that
as set forth on Schedule 1 for the preceding five years.  No entity has merged into any Grantor or been
acquired by any Grantor within the past five years except as set forth on Schedule
1.

 

(b)                                 Schedule 7 attached
hereto sets forth all Real Property owned or leased by Grantors as of the
Closing Date.

 

(c)                                  As of the
Closing Date, no Grantor has any interest in, or title to, any  registered Copyrights, material Intellectual
Property Licenses, registered Patents or Trademarks except as set forth on Schedules
2, 3, 4 and 6, respectively, attached hereto.  This Agreement is effective to create a valid
and continuing Lien on such Copyrights, Intellectual Property Licenses, Patents
and Trademarks and, upon filing of the Copyright Security Agreement with the
United States Copyright Office and filing of the Patent Security Agreement and
the Trademark Security Agreement with the United States Patent and Trademark
Office, and the filing of appropriate financing statements in the jurisdictions
listed on Schedule 8 hereto, all action necessary or desirable to
protect and perfect the Security Interest in the United States in and to each
Grantor’s Patents, Trademarks, Copyrights or Intellectual Property Licenses
constituting Collateral has been taken and such perfected Security Interest is
enforceable as such as against any and all creditors of and purchasers from any
Grantor, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
similar laws relating to or limiting creditors’ rights generally.  No Grantor has any interest in any Copyright
that is necessary in connection with the operation of such Grantor’s business,
except for those Copyrights identified on Schedule 2 attached hereto
which have been registered with the United States Copyright Office.

 

(d)                                 Each Grantor
has the requisite corporate, partnership, limited liability company or other
power and authority to enter into this Agreement and the other Transaction
Documents to which it is a party and otherwise to carry out its obligations
hereunder. The execution, delivery and performance by each Grantor of this
Agreement and the filings contemplated herein and the other Transaction
Documents to which it is a party have been duly authorized by all necessary
action on the part of such Grantor and no further action is required by such
Grantor.  This Agreement and the other
Transaction Documents to which it is a party has been duly executed by each
Grantor.  This Agreement and the other
Transaction Documents to which it is a party constitutes the legal, valid and
binding obligation of each Grantor, enforceable against such Grantor in
accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization and similar laws of general
application relating to or affecting the rights and remedies of creditors and
by general principles of equity.

 

(e)                                  No written
claim has been received by any Grantor that any Collateral or any Grantor’s use
of any Collateral violates the rights of any third party. There has been no
adverse decision to any Grantor’s claim of ownership rights in or exclusive
rights to use the Collateral in any jurisdiction or to such Grantor’s right to
keep and maintain such Collateral in full force and effect, and there is no
proceeding involving said rights pending or, to the best

 

10

 

knowledge of such Grantor, threatened before
any court, judicial body, administrative or regulatory agency, arbitrator or
other governmental authority.

 

(f)                                    Each Grantor
shall at all times maintain its books of account and records relating to the
Collateral at its principal place of business (except when temporarily kept at
the offices of its attorneys or accountants) or Evergreen Energy Inc.’s
principal place of business and its Collateral in the jurisdictions set forth
on Schedule 7 attached hereto and may not relocate such books of account
and records or tangible Collateral unless it delivers to Secured Party at least
thirty (30) days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the United
States) and (ii) evidence that appropriate financing statements under the
Code and other necessary documents have been filed and recorded and other steps
have been taken to perfect the Security Interests to create in favor of Secured
Party, subject to Permitted Encumbrances, a valid, perfected and continuing
perfected first priority lien in the Collateral.

 

(g)                                 The execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party by each Grantor do not (i) violate any of the
provisions of the Organizational Documents of any Grantor or any judgment,
decree, order or award of any court, governmental body or arbitrator or any
applicable law, rule or regulation applicable to any Grantor or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing such Grantor’s debt or otherwise) or other understanding
to which any Grantor is a party or by which any property or asset of any
Grantor is bound or affected, except in all cases, for such conflicts,
defaults, terminations, amendments, acceleration, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse
Effect.  If any, all required consents
(including, without limitation, from stockholders or creditors of the Grantor)
necessary for the Grantor to enter into and perform its obligations hereunder
have been obtained.

 

(h)                                 This Agreement
creates a valid security interest in the Collateral of each of Grantors, to the
extent a security interest therein can be created under the Code, securing the
payment of the Secured Obligations. 
Except to the extent a security interest in the Collateral cannot be
perfected by the filing of a financing statement under the Code,  all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Secured Party, as secured party, in the
jurisdictions listed next to such Grantor’s name on Schedule 7 attached
hereto.  Upon the making of such filings,
Secured Party shall have, subject to Permitted Encumbrances, a first priority
perfected security interest in the Collateral of each Grantor to the extent
such security interest can be perfected by the filing of a financing
statement.  All action by any Grantor
necessary to protect and perfect such security interest on each item of
Collateral has been duly taken (to the extent such action is required under
this Agreement).

 

(i)                                     (i) Except
for the Security Interest created hereby, each Grantor is and will at all times
be the sole holder of record and the legal and beneficial owner, free and clear
of all 

 

11

 

Liens other than Permitted Encumbrances, of
the Pledged Interests indicated on Schedule 5 as being owned by such
Grantor and, when acquired by such Grantor, any Pledged Interests acquired
after the Closing Date; (ii) all of the Pledged Interests are duly
authorized, validly issued, fully paid and nonassessable and the Pledged
Interests constitute or will constitute the percentage of the issued and
outstanding Stock of the Pledged Companies of such Grantor identified on Schedule
5 hereto as supplemented or modified by any Pledged Interests Addendum or
any Supplement to this Agreement; (iii) such Grantor has the right and
requisite authority to pledge the Investment Related Property pledged by such
Grantor to Secured Party as provided herein; (iv) all actions necessary or
desirable to perfect, establish, subject to Permitted Encumbrances, the first
priority of, or otherwise protect, Secured Party’s Liens in the Investment
Related Property, and the proceeds thereof, have been duly taken, (A) upon
the execution and delivery of this Agreement, (B) upon the taking of
possession by Secured Party or its representative of any certificates
constituting the Pledged Interests, to the extent such Pledged Interests are
represented by certificates, and constitute investment property, together with
undated powers endorsed in blank by the applicable Grantor; (C) upon the
filing of financing statements in the applicable jurisdiction set forth on Schedule
8 attached hereto for such Grantor with respect to the Pledged Interests of
such Grantor that are not represented by certificates, and (D) with
respect to any Securities Accounts or Deposit Accounts, upon the delivery of
Control Agreements with respect thereto (to the extent such delivery is
required by the Secured Party); and (v) each Grantor has delivered to and
deposited with Secured Party (or, with respect to any Pledged Interests created
or obtained after the Closing Date, will deliver and deposit in accordance with
Sections 6(a) and 8 hereof) all certificates representing
the Pledged Interests owned by such Grantor to the extent such Pledged
Interests are represented by certificates, and undated powers endorsed in blank
with respect to such certificates. None of the Pledged Interests owned or held
by such Grantor has been issued or transferred in violation of any securities
registration, securities disclosure, or similar laws of any jurisdiction to
which such issuance or transfer may be subject.

 

(j)                                     No consent,
approval, authorization, or other order or other action by, and no notice to or
filing with, any Governmental Authority or any other Person is required (i) for
the grant of a Security Interest by such Grantor in and to the Collateral
pursuant to this Agreement or for the execution, delivery, or performance of
this Agreement and the other Transaction Documents to which it is a party by
such Grantor, except those consents, approvals, authorizations or other
actions, the failure of which to obtain could not reasonably be expected to
cause a Material Adverse Effect, or (ii) for the exercise by Secured Party
of the voting or other rights provided for in this Agreement or any other
Transaction Document with respect to the Investment Related Property or the
remedies in respect of the Collateral pursuant to this Agreement or any other
Transaction Document, except as may be required in connection with such
disposition of Investment Related Property by laws affecting the offering and
sale of securities generally.

 

(k)                                  Schedule 9 attached
hereto sets forth all motor vehicles owned by Grantors as of the Closing Date
with an individual value in excess of Forty Thousand Dollars ($40,000), by
model, model year and vehicle identification number (“VIN”).

 

12

 

6.                                       Covenants.  Each Grantor, jointly and severally,
covenants and agrees with Secured Party that from and after the date of this
Agreement and until the date of termination of this Agreement in accordance
with Section 22 hereof:

 

(a)                                  Possession of
Collateral.  In the
event that any Collateral, including Proceeds, is evidenced by or consists of
Negotiable Collateral, Investment Related Property, or Chattel Paper, with a
value, individually or in the aggregate, in excess of One Hundred Thousand
Dollars ($100,000), and if and to the extent that perfection or priority of
Secured Party’s Security Interest is dependent on or enhanced by possession,
the applicable Grantor, promptly (and in any event within one (1) Business
Day) upon the request of Secured Party, shall execute such other documents and
instruments as shall be reasonably requested by Secured Party or, if
applicable, endorse and deliver physical possession of such Collateral to
Secured Party or its representative, together with, if applicable, such undated
powers endorsed in blank as shall be reasonably requested by Secured Party;

 

(b)                                 Chattel Paper.

 

(i)                                     In the event
that the Grantors acquire electronic Chattel Paper with a value, individually
or in the aggregate, in excess of Twenty-Five Thousand Dollars ($25,000), the
applicable Grantor shall promptly (and in any event within two (2) Business
Days) notify the Secured Party thereof, and upon the request of the Secured
Party, take all steps reasonably necessary to grant Secured Party control of
all such electronic Chattel Paper in accordance with the Code and all “transferable
records” as that term is defined in Section 16 of the Uniform Electronic
Transaction Act and Section 201 of the federal Electronic Signatures in
Global and National Commerce Act as in effect in any relevant jurisdiction;

 

(ii)                                  If any Grantor
retains possession of any Chattel Paper or instruments (which retention of
possession shall be subject to the extent permitted hereby and by the Purchase
Agreement), promptly upon the request of Secured Party, such Chattel Paper and
instruments shall be marked with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the Security Interest of
Centurion Credit Funding LLC”;

 

(c)                                  Letter-of-Credit
Rights.  Each Grantor that is or
becomes the beneficiary of a letter of credit with a face value in excess of
Twenty-Five Thousand Dollars ($25,000) shall promptly (and in any event within
two (2) Business Days after becoming a beneficiary), notify Secured Party
thereof and, thereafter, upon the request by Secured Party, except with respect
to documentary letters of credit received by a Grantor from customers in the
ordinary course of business if no Event of Default has occurred and is
continuing, take such actions the Agent may reasonably request to grant the Agent
control thereof, which may include entering into a tri-party agreement with
Secured Party and the issuer or confirmation bank with respect to
letter-of-credit rights assigning such letter-of-credit rights to Secured Party
and directing all payments thereunder to a deposit account designated by
Secured Party, all in form and substance reasonably satisfactory to Secured
Party;

 

13

 

(d)                                 Commercial Tort
Claims.  Each Grantor shall promptly
(and in any event within two (2) Business Days of receipt thereof), notify
Secured Party in writing upon becoming a plaintiff in respect of, or otherwise
obtaining a Commercial Tort Claim after the date hereof and, upon request of
Secured Party, promptly amend Schedule 10 to this Agreement to describe
such after-acquired Commercial Tort Claim in a manner that reasonably
identifies such Commercial Tort Claim, and hereby authorizes the filing of
additional financing statements or amendments to existing financing statements
describing such Commercial Tort Claims, and agrees to do such other acts or
things deemed necessary or desirable by Secured Party to give Secured Party,
subject to Permitted Encumbrances, a first priority perfected security interest
in any such Commercial Tort Claim;

 

(e)                                  Government
Contracts.  If any
Account or Chattel Paper, individually or in the aggregate with a value in
excess of Twenty-Five Thousand Dollars ($25,000), arises out of a contract or
contracts with the United States of America or any department, agency, or
instrumentality thereof, Grantors shall promptly (and in any event within two (2) Business
Days of the creation thereof) notify Secured Party thereof in writing and
execute any instruments or take any steps reasonably required by Secured Party,
to the extent permitted under, and in accordance with, applicable law, in order
that all moneys due or to become due under such contract or contracts shall be
assigned to Secured Party, and shall provide written notice thereof under the
Assignment of Claims Act or other applicable law;

 

(f)                                    Intellectual
Property.

 

(i)                                     Upon request of
Secured Party, in order to facilitate filings with the United States Patent and
Trademark Office and the United States Copyright Office, each Grantor shall
execute and deliver to Secured Party one or more Copyright Security Agreements,
Trademark Security Agreements, or Patent Security Agreements to further
evidence Secured Party’s Liens on such Grantor’s Patents, Trademarks, or
Copyrights, and the General Intangibles of such Grantor relating thereto or
represented thereby;

 

(ii)                                  Each Grantor
shall have the duty, to the extent necessary or economically desirable in the
operation of its business, (A) to promptly sue for infringement,
misappropriation, or dilution and to recover any and all awarded damages for
such infringement, misappropriation, or dilution, (B) to prosecute
diligently any trademark application or service mark application that is part
of such Grantor’s Trademarks pending as of the date hereof or hereafter until
the termination of this Agreement, (C) to prosecute diligently any patent
application that is part of such Grantor’s Patents pending as of the date
hereof or hereafter until the termination of this Agreement, and (D) to
take all reasonable and necessary action to preserve and maintain all of such
Grantor’s Trademarks, Patents, Copyrights, Intellectual Property Licenses, and
its rights therein, including the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings. 
Each Grantor shall promptly file an application with the United States
Copyright Office for any Copyright that has not been registered with the United
States Copyright Office if such Copyright is necessary or economically
desirable in the operation of such Grantor’s business. Any expenses incurred in
connection with the foregoing shall be borne by the appropriate Grantor.  Each Grantor further agrees not to abandon
any Trademark, Patent, 

 

14

 

Copyright, or Intellectual Property License
that is necessary or economically desirable in the operation of such Grantor’s
business;

 

(iii)                               Grantors
acknowledge and agree that Secured Party shall have no duties with respect to
the Trademarks, Patents, Copyrights, or Intellectual Property Licenses.  Without limiting the generality of this Section 6(g),
Grantors acknowledge and agree that Secured Party shall not be under any
obligation to take any steps necessary to preserve rights in the Trademarks,
Patents, Copyrights, or Intellectual Property Licenses against any other
Person, but Secured Party may do so at its option from and after the occurrence
and during the continuance of an Event of Default, and all expenses incurred in
connection therewith (including reasonable fees and expenses of attorneys and
other professionals) shall be for the sole account of the Company and shall be
chargeable to the Company;

 

(iv)                              In no event
shall any Grantor, either itself or through any agent, employee, licensee, or
designee, file an application for the registration of any Patent, Trademark, or
Copyright with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency without giving Secured Party
prompt (and in any event within ten (10) Business Days) written notice
thereof.  Promptly upon any such filing,
each Grantor shall comply with Section 6(g)(i) hereof;

 

(g)                                 Investment
Related Property.

 

(i)                                     If any Grantor
shall receive or become entitled to receive any Pledged Interests after the
Closing Date, it shall promptly (and in any event within five (5) Business
Days of receipt thereof) deliver to Secured Party a duly executed Pledged
Interests Addendum identifying such Pledged Interests;

 

(ii)                                  Upon the
occurrence and during the continuance of an Event of Default, all sums of money
and property paid or distributed in respect of the Investment Related Property
which are received by any Grantor shall be held by the Grantors in trust for
the benefit of Secured Party segregated from such Grantor’s other property, and
such Grantor shall deliver it forthwith to Secured Party in the exact form
received;

 

(iii)                               Each Grantor
shall promptly deliver to Secured Party a copy of each notice or other
communication received by it in respect of any Pledged Interests;

 

(iv)                              No Grantor
shall make or consent to any amendment or other modification or waiver with
respect to any Pledged Interests, Pledged Operating Agreement, or Pledged
Partnership Agreement, that could reasonably be expected to result in a
Material Adverse Effect or enter into any agreement or permit to exist any
restriction with respect to the pledge of any Pledged Interests other than
pursuant to the Transaction Documents;

 

(v)                                 Each Grantor
agrees that it will cooperate with Secured Party in obtaining all necessary
approvals and making all necessary filings under federal, state, local, or
foreign law in connection with the Security Interest on the Investment Related
Property or any sale or transfer thereof;

 

15

 

(vi)                              As to all
limited liability company or partnership interests, issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, each Grantor hereby
represents, warrants and covenants that the Pledged Interests issued pursuant
to such agreement (A) are not and shall not be dealt in or traded on
securities exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and will not be
held by such Grantor in a securities account. 
In addition, none of the Pledged Operating Agreements, the Pledged
Partnership Agreements, or any other agreements governing any of the Pledged
Interests issued under any Pledged Operating Agreement or Pledged Partnership
Agreement, provide or shall provide that such Pledged Interests are securities
governed by Article 8 of the Uniform Commercial Code as in effect in any
relevant jurisdiction;

 

(h)                                 Real Property;
Fixtures.  Each Grantor
covenants and agrees that upon the acquisition of any fee interest in Real
Property it will promptly (and in any event within two (2) Business Days
of acquisition) notify Secured Party of the acquisition of such Real Property
and will grant to Secured Party a first priority Mortgage on each fee interest
in Real Property now or hereafter owned by such Grantor and shall deliver such
other documentation and opinions, in form and substance satisfactory to Secured
Party, in connection with the grant of such Mortgage as Secured Party shall
request in its reasonable credit judgment, including title insurance policies,
financing statements, fixture filings and environmental audits and such Grantor
shall pay all recording costs, intangible taxes and other fees and costs
(including reasonable attorneys’ fees and expenses) incurred in connection
therewith.  Each Grantor acknowledges and
agrees that, to the extent permitted by applicable law, all of the Collateral
shall remain personal property regardless of the manner of its attachment or affixation
to real property.

 

(i)                                     Transfers and
Other Liens.  Except as
otherwise expressly permitted hereby or by the Purchase Agreement, Grantors
shall not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, or (ii) create
or permit to exist any Lien upon or with respect to any of the Collateral of
any of Grantors, except for Permitted Encumbrances.  The inclusion of Proceeds in the Collateral
shall not be deemed to constitute Secured Party’s consent to any sale or other
disposition of any of the Collateral except as expressly permitted in this
Agreement, the Purchase Agreement or the other Transaction Documents;

 

(j)                                     Motor Vehicles.  With respect to all motor vehicles owned by
any Grantor, upon request of Secured Party, Grantor shall deliver to Secured
Party, a certificate of title for all such motor vehicles and shall cause those
title certificates to be filed (with the Secured Party’s Liens noted thereon)
in the appropriate state motor vehicle filing office; and

 

(k)                                  Insurance.  The Grantors shall maintain with financially
sound and reputable insurers, insurance with respect to the Collateral,
including Collateral hereafter acquired, against loss or damage of the kinds and
in the amounts customarily insured against by entities of established
reputation having similar properties similarly situated and in such amounts as
are customarily carried under similar circumstances by other such entities and
otherwise as is prudent for entities engaged in similar businesses but in any
event sufficient to cover the full replacement cost thereof (it being agreed
that the insurance policies and amounts maintained by Grantors as of the
Closing Date are satisfactory).  The
Grantors shall cause each insurance policy 

 

16

 

issued in connection herewith to provide, and
the insurer issuing such policy to certify to Secured Party that (a) Secured
Party will be named as lender loss payee (mortgagee, as applicable) and
additional insured under each such insurance policy; (b) if such insurance
be proposed to be cancelled or materially changed for any reason whatsoever,
such insurer will promptly notify Secured Party and such cancellation or change
shall not be effective as to Secured Party for at least thirty (30) days after
receipt by Secured Party of such notice, unless the effect of such change is to
extend or increase coverage under the policy; and (c) Secured Party will
have the right (but no obligation) at its election to remedy any default in the
payment of premiums within thirty (30) days of notice from the insurer of such
default.  If no Event of Default exists
and if the proceeds arising out of any claim or series of related claims do not
exceed $100,000, loss payments in each instance will be available to the
Grantors and applied by the Grantors to the repair and/or replacement of
property with respect to which the loss was incurred.  If no Event of Default exists and such
proceeds exceed $100,000, and in any event after an Event of Default occurs,
all proceeds then or thereafter in existence shall be paid to Secured Party
(for application to the Obligations) and, if received by any Grantor, shall be
held in trust for Secured Party and promptly paid over to Secured Party (for
application to the Obligations) unless otherwise directed in writing by Secured
Party.

 

(l)                                     Copies.  The Grantors shall deliver copies of such
policies or the related certificates evidencing that Secured Party is listed as
lender loss payee on property insurance and as additional insured on liability
insurance at least annually and at the time any new policy of insurance is
issued.

 

7.                                       Relation to
Other Security Documents.  The provisions of this Agreement shall be read and construed with
the other Transaction Documents referred to below in the manner so indicated.

 

(a)                                  Purchase
Agreement. In the event of any conflict between any provision
in this Agreement and a provision in the Purchase Agreement, such provision of
the Purchase Agreement shall control.

 

(b)                                 Note. In the event
of any conflict between any provision in this Agreement and a provision in the
Notes, such provision of the Notes shall control.

 

(c)                                  Patent,
Trademark, Copyright Security Agreements.  The provisions of any executed Copyright
Security Agreements, Trademark Security Agreements, and Patent Security
Agreements are supplemental to the provisions of this Agreement, and nothing
contained in the Copyright Security Agreements, Trademark Security Agreements,
or the Patent Security Agreements shall limit any of the rights or remedies of
Secured Party hereunder.

 

17

 

8.                                       Further
Assurances.

 

(a)                                  Each Grantor
agrees that from time to time, at its own expense, such Grantor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or that Secured Party may reasonably request, in
order to perfect and protect the Security Interest granted or purported to be
granted hereby or to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any of the Collateral.

 

(b)                                 Subject to Section 8(c),
each Grantor authorizes the filing by Secured Party of financing or
continuation statements, or amendments thereto, and such Grantor will execute
and deliver to Secured Party such other instruments or notices, as may be
necessary or as Secured Party may reasonably request, in order to perfect and
preserve the Security Interest granted or purported to be granted hereby.

 

(c)                                  Each Grantor
authorizes Secured Party at any time and from time to time to file, transmit,
or communicate, as applicable, financing statements and amendments (i) describing
the Collateral as “all personal property of debtor” or “all assets of debtor”
or words of similar effect, (ii) describing the Collateral as being of
equal or lesser scope or with greater detail, or (iii) that contain any
information required by part 5 of Article 9 of the Code for the
sufficiency or filing office acceptance. 
Each Grantor also hereby ratifies any and all financing statements or
amendments previously filed by Secured Party in any jurisdiction.

 

(d)                                 Each Grantor
acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement
filed in connection with this Agreement without the prior written consent of
Secured Party, subject to such Grantor’s rights under Section 9-509(d)(2) of
the Code.

 

9.                                       Secured Party’s
Right to Perform Contracts, Exercise Rights, etc.  Upon the occurrence and during the
continuance of an Event of Default, Secured Party (or its designee) (a) may
proceed to perform any and all of the obligations of any Grantor contained in
any contract, lease, or other agreement and exercise any and all rights of any
Grantor therein contained as fully as such Grantor itself could, (b) shall
have the right to use any Grantor’s rights under Intellectual Property Licenses
in connection with the enforcement of the Secured Party’s rights hereunder,
including the right to prepare for sale and sell any and all Inventory and
Equipment now or hereafter owned by any Grantor and now or hereafter covered by
such licenses, but only to the extent permitted by such licenses or the
licensors thereunder or applicable law, and (c) shall have the right to
request that any Stock that is pledged hereunder be registered in the name of
Secured Party or any of its nominees.

 

10.                                 Secured Party
Appointed Attorney-in-Fact.  Each Grantor hereby irrevocably appoints
Secured Party its attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor or otherwise, at such time as
an Event of Default has occurred and is continuing under the Notes, to take any
action and to execute any instrument which Secured Party may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:

 

18

 

(a)                                  to ask, demand,
collect, sue for, recover, compromise, receive and give acquittance and
receipts for moneys due and to become due under or in connection with the
Accounts or any Supporting Obligations in connection therewith or any other
Collateral of such Grantor;

 

(b)                                 to receive and
open all mail addressed to such Grantor and to notify postal authorities to
change the address for the delivery of mail to such Grantor to that of Secured
Party;

 

(c)                                  to receive,
indorse, and collect any drafts or other instruments, documents, Negotiable
Collateral or Chattel Paper;

 

(d)                                 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 of such
Grantor or otherwise to enforce the rights of Secured Party with respect to any
of the Collateral;

 

(e)                                  to repair,
alter, or supply goods, if any, necessary to fulfill in whole or in part the
purchase order of any Person obligated to such Grantor in respect of any
Account of such Grantor;

 

(f)                                    to use any
labels, Patents, Trademarks, trade names, URLs, domain names, industrial
designs, Copyrights, advertising matter or other industrial or intellectual
property rights, in advertising for sale and selling Inventory and other
Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and

 

(g)                                 Secured Party
shall have the right, but shall not be obligated, to bring suit in its own name
to enforce the Trademarks, Patents, Copyrights and Intellectual Property
Licenses and, if Secured Party shall commence any such suit, the appropriate
Grantor shall, at the request of Secured Party, do any and all lawful acts and
execute any and all proper documents reasonably required by Secured Party in
aid of such enforcement.

 

To
the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof.  This power of attorney is coupled with an
interest and shall be irrevocable until this Agreement is terminated.

 

11.                                 Secured Party May Perform.  If any of Grantors fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the reasonable out-of-pocket expenses of
Secured Party incurred in connection therewith shall be payable, jointly and
severally, by Grantors.

 

12.                                 Secured Party’s
Duties.  The powers conferred on
Secured Party hereunder are solely to protect Secured Party’s interest in the
Collateral, and shall not impose any duty upon Secured Party to exercise any
such powers.  Except for the safe custody
of any Collateral in its actual possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.  Secured Party shall be 

 

19

 

deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its actual possession if such
Collateral is accorded treatment substantially equal to that which Secured
Party accords its own property.

 

13.                                 Collection of
Accounts, General Intangibles and Negotiable Collateral.  At any time upon the occurrence and during
the continuance of an Event of Default, Secured Party or Secured Party’s
designee may (a) notify Account Debtors of any Grantor that the Accounts,
General Intangibles, Chattel Paper or Negotiable Collateral have been assigned
to Secured Party or that Secured Party has a security interest therein, and (b) collect
the Accounts, General Intangibles and Negotiable Collateral directly, and any
collection costs and expenses shall constitute part of such Grantor’s Secured
Obligations under the Transaction Documents.

 

14.                                 Disposition of
Pledged Interests by Secured Party.  None of the Pledged Interests existing as of
the date of this Agreement are, and none of the Pledged Interests hereafter
acquired on the date of acquisition thereof will be, registered or qualified
under the various federal or state securities laws of the United States and
disposition thereof after an Event of Default may be restricted to one or more
private (instead of public) sales in view of the lack of such registration.  Each Grantor understands that in connection
with such disposition, Secured Party may approach only a restricted number of
potential purchasers and further understands that a sale under such
circumstances may yield a lower price for the Pledged Interests than if the Pledged
Interests were registered and qualified pursuant to federal and state
securities laws and sold on the open market. 
Each Grantor, therefore, agrees that: 
(a) if Secured Party shall, pursuant to the terms of this
Agreement, sell or cause the Pledged Interests or any portion thereof to be
sold at a private sale, Secured Party shall have the right to rely upon the
advice and opinion of any nationally recognized brokerage or investment firm
(but shall not be obligated to seek such advice and the failure to do so shall
not be considered in determining the commercial reasonableness of such action)
as to the best manner in which to offer the Pledged Interest or any portion
thereof for sale and as to the best price reasonably obtainable at the private
sale thereof; and (b) such reliance shall be conclusive evidence that
Secured Party has handled the disposition in a commercially reasonable manner.

 

15.                                 Voting Rights.

 

(a)                                  Upon the
occurrence and during the continuation of an Event of Default, (i) Secured
Party may, at its option, and with no prior notice to any Grantor, and in
addition to all rights and remedies available to Secured Party under any other
agreement, at law, in equity, or otherwise, exercise all voting rights, and all
other ownership or consensual rights in respect of the Pledged Interests owned
by such Grantor, but under no circumstances is Secured Party obligated by the
terms of this Agreement to exercise such rights, and (ii) if Secured Party
duly exercises its right to vote any of such Pledged Interests, each Grantor
hereby appoints Secured Party, such Grantor’s true and lawful attorney-in-fact
and IRREVOCABLE PROXY to vote such Pledged Interests in any manner Secured
Party deems advisable for or against all matters submitted or which may be submitted
to a vote of shareholders, partners or members, as the case may be.  The power-of-attorney granted hereby is
coupled with an interest and shall be irrevocable.

 

20

 

(b)                                 For so long as
any Grantor shall have the right to vote the Pledged Interests owned by it,
such Grantor covenants and agrees that it will not, without the prior written
consent of Secured Party, vote or take any consensual action with respect to
such Pledged Interests which would materially adversely affect the rights of
Secured Party or the value of the Pledged Interests.

 

(c)                                  If any of the
Collateral subject to this Agreement consists of nonvoting equity or ownership
interests (regardless of class, designation, preference or rights) that may be
converted into voting equity or ownership interests upon the occurrence of
certain events (including, without limitation, upon the transfer of all or any
of the other stock or assets of the issuer), it is agreed that the pledge of
such equity or ownership interests pursuant to this Agreement or the
enforcement of any of Secured Party’s rights hereunder shall not be deemed to
be the type of event which would trigger such conversion rights notwithstanding
any provisions in the Organizational Documents or agreements to which the
Grantor is subject or to which the Grantor is party.

 

16.                                 Remedies.  Upon the occurrence and during the
continuance of an Event of Default:

 

(a)                                  Secured Party
may exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein, in the other Transaction Documents, or otherwise
available to it, all the rights and remedies of a secured party on default
under the Code or any other applicable law. 
Without limiting the generality of the foregoing, each Grantor expressly
agrees that, in any such event, Secured Party without demand of performance or
other demand, advertisement or notice of any kind (except a notice specified
below of time and place of public or private sale) to or upon any of Grantors
or any other Person (all and each of which demands, advertisements and notices
are hereby expressly waived to the maximum extent permitted by the Code or any
other applicable law), may take immediate possession of all or any portion of
the Collateral and (i) require Grantors to, and each Grantor hereby agrees
that it will at its own expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at one or more locations where such Grantor
regularly maintains Inventory, and (ii) without notice except as specified
below, sell or otherwise dispose of the Collateral or any part thereof in one
or more parcels at public or private sale or other disposition, at any of
Secured Party’s offices or elsewhere, for cash, on credit, and upon such other
terms as Secured Party may deem commercially reasonable. Without limiting the
generality of the foregoing, Secured Party may disclaim any and all
representations and warranties in connection with any such sale or other
disposition.  Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days
notice to any of Grantors 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 and specifically such notice shall constitute a reasonable “authenticated
notification of disposition” within the meaning of Section 9-611 of the
Code.  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.

 

21

 

(b)                                 Secured Party
is hereby granted a license or other right to use, without liability for
royalties or any other charge, each Grantor’s labels, Patents, Copyrights,
rights of use of any name, trade secrets, trade names, Trademarks, service
marks and advertising matter, URLs, domain names, industrial designs, other
industrial or intellectual property or any property of a similar nature,
whether owned by any of Grantors or with respect to which any of Grantors have
rights under license, sublicense, or other agreements, (but only to the extent (i) such
license, sublicense or agreement does not prohibit such use by Secured Party
and (ii) such Grantor will not be in default under such license,
sublicense or other agreement as a result of such use by Secured Party) as it
pertains to the Collateral, in preparing for sale, advertising for sale and
selling any Collateral, and each Grantor’s rights under all licenses and all
franchise agreements shall inure to the benefit of Secured Party.

 

(c)                                  Any cash held
by Secured Party as Collateral and all 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 shall be applied against the Secured Obligations in
the order set forth in the Purchase Agreement.  
In the event the proceeds of Collateral are insufficient to satisfy all
of the Secured Obligations in full, each Grantor shall remain jointly and
severally liable for any such deficiency.

 

(d)                                 Each Grantor
hereby acknowledges that the Secured Obligations arose out of a commercial
transaction.

 

17.                                 Remedies
Cumulative.  Each right,
power, and remedy of Secured Party as provided for in this Agreement or in the
other Transaction Documents or now or hereafter existing at law or in equity or
by statute or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in this Agreement
or in the other Transaction Documents or now or hereafter existing at law or in
equity or by statute or otherwise, and the exercise or beginning of the
exercise by Secured Party, of any one or more of such rights, powers, or
remedies shall not preclude the simultaneous or later exercise by Secured Party
of any or all such other rights, powers, or remedies.

 

18.                                 Marshaling. Secured
Party  shall not be required to marshal
any present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Secured Obligations or
any of them or to resort to such collateral security or other assurances of
payment in any particular order, and all of its rights and remedies hereunder
and in respect of such collateral security and other assurances of payment
shall be cumulative and in addition to all other rights and remedies, however
existing or arising.  To the extent that
it lawfully may, each Grantor hereby agrees that it will not invoke any law
relating to the marshaling of collateral which might cause delay in or impede
the enforcement of Secured Party’s rights and remedies under this Agreement or
under any other instrument creating or evidencing any of the Secured Obligations
or under which any of the Secured Obligations is outstanding or by which any of
the Secured Obligations is secured or payment thereof is otherwise assured,
and, to the extent that it lawfully may, each Grantor hereby irrevocably waives
the benefits of all such laws.

 

22

 

19.                                 Indemnity and
Expenses.

 

(a)                                  Each Grantor
agrees to indemnify Secured Party from and against all claims, lawsuits and
liabilities (including reasonable attorneys’ fees) growing out of or resulting
from this Agreement (including enforcement of this Agreement) or any other
Transaction Document to which such Grantor is a party, except claims, losses or
liabilities resulting from the gross negligence or willful misconduct of the
party seeking indemnification as determined by a final non-appealable order of
a court of competent jurisdiction, and subject to any other express limitations
set forth in the Transaction Documents. 
This provision shall survive the termination of this Agreement and the
repayment of the Secured Obligations.

 

(b)                                 Grantors,
jointly and severally, shall, upon demand, pay to Secured Party all the fees,
costs, charges and expenses which Secured Party may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or, upon an Event of Default, the sale of, collection from, or
other realization upon, any of the Collateral in accordance with this Agreement
and the other Transaction Documents, (iii) the exercise or enforcement of
any of the rights of Secured Party hereunder or (iv) the failure by any of
Grantors to perform or observe any of the provisions hereof.

 

20.                                 Merger,
Amendments; Etc.  THIS
AGREEMENT, TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS, REPRESENTS 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 AGREEMENTS BETWEEN THE
PARTIES.  No waiver of any provision of
this Agreement, and no consent to any departure by any of Grantors herefrom,
shall in any event be effective unless the same shall be 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.  No amendment of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
Secured Party and each of Grantors to which such amendment applies.

 

21.                                 Addresses for
Notices.  All notices and other
communications provided for hereunder shall be given in the form and manner and
delivered to Secured Party at its address specified in the Purchase Agreement,
and to any of the Grantors at their respective addresses specified in the
Purchase Agreement, as applicable, or, as to any party, at such other address
as shall be designated by such party in a written notice to the other party.

 

22.                                 Continuing
Security Interest: Assignments under Credit Agreement.  This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the Obligations have been indefeasibly paid in full or otherwise
terminated in accordance with the provisions of the Notes and the Purchase
Agreement, (b) be binding upon each of Grantors, and their respective
successors and assigns, and (c) inure to the benefit of, and be
enforceable by, Secured Party, and its successors, transferees and
assigns.  Without limiting the generality
of the foregoing clause (c), Secured Party may, in accordance with the
provisions of the Notes and the Purchase Agreement, assign or otherwise
transfer all or any portion of its rights and obligations under the Notes and
the Purchase Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Secured Party
herein or otherwise.  Upon indefeasible
payment in full or other termination of the 

 

23

 

Obligations in accordance with the provisions
of the Notes and the Purchase Agreement, the Security Interest granted hereby
shall terminate and all rights to the Collateral shall revert to Grantors or
any other Person entitled thereto.  At
such time, Secured Party shall authorize the filing of appropriate termination
statements to terminate such Security Interests.  No transfer or renewal, extension,
assignment, or termination of this Agreement or of the Notes, the Purchase
Agreement, any other Transaction Document, or any other instrument or document
executed and delivered by any Grantor to Secured Party nor any additional loans
made by Secured Party to the Companies, or any of them, nor the taking of
further security, nor the retaking or re-delivery of the Collateral to
Grantors, or any of them, by Secured Party, shall release any of Grantors from
any obligation, except a release or discharge executed in writing by Secured
Party in accordance with the provisions of the Notes and the Purchase
Agreement.  Secured Party shall not by
any act, delay, omission or otherwise, be deemed to have waived any of its
rights or remedies hereunder, unless such waiver is in writing and signed by
Secured Party and then only to the extent therein set forth.  A waiver by Secured Party of any right or
remedy on any occasion shall not be construed as a bar to the exercise of any
such right or remedy which Secured Party would otherwise have had on any other
occasion.

 

23.                                 Governing Law.

 

(a)                                  THE
VALIDITY OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS (UNLESS EXPRESSLY
PROVIDED TO THE CONTRARY IN ANOTHER TRANSACTION DOCUMENT IN RESPECT OF SUCH
OTHER TRANSACTION DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b)                                 THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY
IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT SECURED PARTY’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SECURED PARTY ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND.  SECURED
PARTY AND EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY
RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO
OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 23(b).

 

(c)                                  TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, SECURED PARTY AND EACH GRANTOR
HEREBY WAIVE THEIR 

 

24

 

RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS.  SECURED PARTY AND EACH GRANTOR
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

24.                                 New
Subsidiaries.  Without
impairing the limitations and restrictions of Section 3.20 of the
Purchase Agreement, any new direct or indirect Subsidiary (whether by
acquisition or creation) of Grantor is required, following request from Secured
Party, to enter into this Agreement by executing and delivering in favor of
Secured Party a supplement to this Agreement in the form of Annex 1
attached hereto.  Upon the execution and
delivery of Annex 1 by such new Subsidiary, such Subsidiary shall become
a Grantor hereunder with the same force and effect as if originally named as a
Grantor herein.  The execution and
delivery of any instrument adding an additional Grantor as a party to this
Agreement shall not require the consent of any Grantor hereunder.  The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor hereunder.

 

25.                                 Secured Party.  Each reference herein to any right granted
to, benefit conferred upon or power exercisable by the “Secured Party” shall be
a reference to Secured Party, it successors and assigns..

 

26.                                 Miscellaneous.

 

(a)                                  This Agreement
may be executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. 
Delivery of an executed counterpart of this Agreement by telefacsimile
or other electronic method of transmission shall be equally as effective as
delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
also shall deliver an original executed counterpart of this Agreement but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement.  The foregoing shall apply to each other
Transaction Document mutatis mutandis.

 

(b)                                 Any provision
of this Agreement which is prohibited or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

(c)                                  Headings used
in this Agreement are for convenience only and shall not be used in connection
with the interpretation of any provision hereof.

 

25

 

(d)                                 The pronouns
used herein shall include, when appropriate, either gender and both singular
and plural, and the grammatical construction of sentences shall conform
thereto.

 

(e)                                  Unless the
context of this Agreement or any other Transaction Document clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and  “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement or any other
Transaction Document refer to this Agreement or such other Transaction
Document, as the case may be, as a whole and not to any particular provision of
this Agreement or such other Transaction Document, as the case may be.  Section, subsection, clause, schedule, and
exhibit references herein are to this Agreement unless otherwise
specified.  Any reference in this
Agreement or in any other Transaction Document to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein or in
the other Transaction Documents).  Any
reference herein or in any other Transaction Document to the satisfaction or
repayment in full of the Obligations shall mean the repayment in full in cash
(or cash collateralization in accordance with the terms hereof) of all
Obligations other than unasserted contingent indemnification Obligations.  Any reference herein to any Person shall be
construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein
or in any other Transaction Document shall be satisfied by the transmission of
a Record and any Record so transmitted shall constitute a representation and
warranty as to the accuracy and completeness of the information contained
therein.

 

[SIGNATURE PAGE FOLLOWS]

 

26

 

IN
WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement by
and through their duly authorized officers, as of the day and year first above
written.

 

 

	
  GRANTOR:

  	
  BUCKEYE
  INDUSTRIAL MINING CO.   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Diana L. Kubik

  
	
   

  	
  Name:
  Diana L. Kubik

  
	
   

  	
  Title:
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  SECURED
  PARTY:

  	
  CENTURION
  CREDIT FUNDING LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  David Levy 

  
	
   

  	
  Name:
  David Levy 

  
	
   

  	
  Title:
  Authorized Signatory

  

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

S-1

 

SCHEDULE 1

 

ORGANIZATIONAL INFORMATION

 

Legal
Name:

 

Buckeye
Industrial Mining Co.

 

Jurisdiction
of Incorporation

 

Ohio

 

Organizational
ID Number: 1084966

 

Chief
Executive Office:  4719 Industrial Road,
Lisbon, OH 44432

 

 

SCHEDULE 2

 

COPYRIGHT REGISTRATIONS AND APPLICATIONS

 

None.

 

 

SCHEDULE 3

 

INTELLECTUAL PROPERTY LICENSES

 

Professional
Support and Technology Transfer Agreement, dated January 3, 2005, between
N-Viro International Corporation and Buckeye Industrial Mining Co.

 

 

SCHEDULE
4

 

PATENTS AND PATENT APPLICATIONS

 

None.

 

 

SCHEDULE 5

 

PLEDGED COMPANIES

 

None.

 

 

SCHEDULE 6

 

TRADE NAMES, TRADEMARKS, TRADEMARK APPLICATIONS, SERVICE MARKS, AND
SERVICE MARK APPLICATIONS

 

None.

 

 

SCHEDULE 7

 

OWNED OR LEASED REAL PROPERTY

 

See
attached.

 

 

SCHEDULE 8

 

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

 

	
  Grantor

  	
   

  	
  Jurisdictions

  
	
   

  	
   

  	
   

  
	
  Buckeye
  Industrial Mining Co.

  	
   

  	
  Ohio

  

 

 

SCHEDULE 9

 

MOTOR VEHICLES

 

None.

 

SECURITY
AGREEMENT

 

 

SCHEDULE 10

 

COMMERCIAL TORT CLAIMS

 

None.

 

 

ANNEX 1 TO SECURITY AGREEMENT

FORM OF SUPPLEMENT

 

Supplement
No.          (this “Supplement”)
dated as of
                              ,
to the Security Agreement dated as of March     , 2009
(as amended, restated, supplemented or otherwise modified from time to time,
the “Security Agreement”) by each of the parties listed on the signature
pages thereto and those additional entities that thereafter become parties
thereto (collectively, jointly and severally, “Grantors” and each individually “Grantor”)
and CENTURION CREDIT FUNDING LLC in its capacity as Secured Party (together
with the successors, “Secured Party”).

 

W I T N E S S E T H:

 

WHEREAS, the
Secured Party and EVERGREEN ENERGY INC. and EVERGREEN OPERATIONS, LLC and
BUCKEYE INDUSTRIAL MINING CO. (collectively, the “Companies” and each
individually a “Company”) are parties to that certain Note Purchase
Agreement dated as of March     , 2009 (as may be
amended, restated, supplemented, replaced or otherwise modified from time to
time, the “Purchase Agreement”), and

 

WHEREAS,
pursuant to the terms and conditions of the Purchase Agreement, the Secured
Party has agreed to extend loans to the Companies, repayment of which is
evidenced by the Notes, and

 

WHEREAS, all
capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Security Agreement or the Notes, or if not expressly
defined in the Notes, then in the Purchase Agreement, and

 

WHEREAS,
Grantors have entered into the Security Agreement in order to induce the Secured
Party to make certain financial accommodations to the Companies; and

 

WHEREAS,
pursuant to the terms and provisions of the Transaction Documents, new direct
or indirect Subsidiaries of any Company, must execute and deliver certain
Transaction Documents, including the Security Agreement, and the execution of
the Security Agreement by the undersigned new Grantor or Grantors
(collectively, the “New Grantors”) may be accomplished by the execution
of this Supplement in favor of Secured Party;

 

NOW,
THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:

 

1.             In accordance with Section 24
of the Security Agreement, each New Grantor, by its signature below, becomes a “Grantor”
under the Security Agreement with the same force and effect as if originally
named therein as a “Grantor” and each New Grantor hereby (a) agrees to all
of the terms and provisions of the Security Agreement applicable to it as a “Grantor”
thereunder and (b) represents and warrants that the representations and
warranties made by it as a “Grantor” thereunder are true and correct on and as
of the date hereof.  In furtherance of
the foregoing, each New Grantor, as security for the payment and performance in
full of the Secured Obligations, does hereby grant, assign, and pledge to
Secured Party a security interest in and 

 

 

security title to all assets of such New
Grantor including, all property of the type described in Section 2
of the Security Agreement to secure the full and prompt payment of the Secured
Obligations, including, any interest thereon, plus reasonable attorneys’ fees
and expenses if the Secured Obligations represented by the Security Agreement
are collected by law, through an attorney-at-law, or under advice
therefrom.  Schedule 1,  “Organizational Information”, Schedule 2,
“Copyright Registrations and Applications”, Schedule 3, “Intellectual
Property Licenses”, Schedule 4, “Patents and Patent Applications”, Schedule
5, “Pledged Companies”,  Schedule
6, “Trade Names, Trademarks, Trademark Applications, Service Marks and
Service Mark Applications”,  Schedule
7, “Owned Real Property,”  Schedule
8, “List of Uniform Commercial Code Filing Jurisdictions”, Schedule 9
“Motor Vehicles”, and Schedule 10 “Commercial Tort Claims” attached
hereto supplement Schedule 1, Schedule 2, Schedule 3, Schedule
4, Schedule 5, Schedule 6, Schedule 7, Schedule
8, Schedule 9 and Schedule 10 respectively, to the Security
Agreement and shall be deemed a part thereof for all purposes of the Security
Agreement.  Each reference to a “Grantor”
in the Security Agreement shall be deemed to include each New Grantor.  The Security Agreement is incorporated herein
by reference.

 

2.             Each New Grantor represents
and warrants to Secured Party that this Supplement has been duly executed and
delivered by such New Grantor and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws affecting
creditors’ rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).

 

3.             This Supplement may be
executed in multiple counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together constitute but one
and the same instrument.  Delivery of a
counterpart hereof by facsimile transmission or by e-mail transmission shall be
as effective as delivery of a manually executed counterpart hereof.

 

4.             Except as expressly
supplemented hereby, the Security Agreement shall remain in full force and
effect.

 

5.             This Supplement shall be
construed in accordance with and governed by the laws of the State of New York,
without regard to the conflict of laws principles thereof.

 

[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]

 

 

IN
WITNESS WHEREOF, each New Grantor and Secured Party have duly executed this
Supplement to the Security Agreement as of the day and year first above
written.

 

	
  NEW
  GRANTORS:

  	
  [Name
  of New Grantor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of New Grantor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  SECURED
  PARTY:

  	
  CENTURION
  CREDIT FUNDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

[SIGNATURE PAGE TO
SUPPLEMENT TO PLEDGE AND SECURITY AGREEMENT]

 

 

EXHIBIT A

 

COPYRIGHT SECURITY AGREEMENT

 

This
COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is
made this      day of March, 2009, among Grantors listed on
the signature pages hereof (collectively, jointly and severally, “Grantors”
and each individually “Grantor”), and CENTURION CREDIT FUNDING LLC (together
with its successors, the “Secured Party”).

 

W I T N E S S E T H:

 

WHEREAS, the
Secured Party and EVERGREEN ENERGY INC. and EVERGREEN OPERATIONS, LLC and
BUCKEYE INDUSTRIAL MINING CO. (collectively, the “Companies” and each
individually a “Company”) are parties to that certain Note Purchase
Agreement bearing even date herewith (as may be amended, restated,
supplemented, replaced or otherwise modified from time to time, the “Purchase
Agreement”), and

 

WHEREAS,
pursuant to the terms and conditions of the Purchase Agreement, the Secured
Party has agreed to extend loans to the Companies, repayment of which is
evidenced by the Notes, and

 

WHEREAS, in
order to induce the Secured Party to enter into the Notes, the Purchase
Agreement and the other Transaction Documents and to induce the Secured Party
to make financial accommodations to the Companies as provided for in the
Purchase Agreement, Grantors have executed and delivered to Secured Party that
certain Security Agreement of even date herewith (including all annexes,
exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the “Security Agreement”);

 

WHEREAS,
pursuant to the Security Agreement, Grantors are required to execute and
deliver to Secured Party this Copyright Security Agreement;

 

NOW, THEREFORE,
in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Grantors hereby agree as follows:

 

1.             DEFINED TERMS.  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or the
Notes or the Purchase Agreement.

 

2.             GRANT OF SECURITY INTEREST
IN COPYRIGHT COLLATERAL.  Each
Grantor hereby unconditionally grants, assigns and pledges to Secured Party a
Security Interest in all of such Grantor’s right, title and interest in and to
the following, whether now owned or hereafter acquired or arising and wherever
located (collectively, the “Copyright Collateral”):

 

(a)           all of such Grantor’s
Copyrights including those referred to on Schedule I hereto; and

 

(b)           all Proceeds of the
foregoing.

 

 

3.             SECURITY FOR OBLIGATIONS.  This Copyright Security Agreement and the
Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter.  Without limiting the generality of the
foregoing, this Copyright Security Agreement secures the payment of all amounts
which constitute part of the Secured Obligations and would be owed by Grantors,
or any of them, to Secured Party whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.

 

4.             SECURITY AGREEMENT.  The Security Interest granted pursuant to
this Copyright Security Agreement is granted in conjunction with the Security
Interest granted to Secured Party pursuant to the Security Agreement.  Each Grantor hereby acknowledges and affirms
that the rights and remedies of Secured Party with respect to the Security
Interest in the Copyright Collateral made and granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.  To the extent there is any inconsistency
between this Copyright Security Agreement and the Security Agreement, the
Security Agreement shall control.

 

5.             AUTHORIZATION
TO SUPPLEMENT.  Grantors shall give Secured Party prompt (and
in any event within fifteen (15) Business Days) notice in writing of any
additional United States copyright registrations or applications therefor after
the date hereof.  Grantors hereby
authorize Secured Party unilaterally to modify this Agreement by amending Schedule
I to include any future United States registered copyrights or applications
therefor of Grantors.  Notwithstanding
the foregoing, no failure to so modify this Copyright Security Agreement or
amend Schedule I shall in any way affect, invalidate or detract from
Secured Party’s continuing Security Interest in all Collateral, whether or not
listed on Schedule I.

 

6.             TERMINATION AND RELEASE.  Upon indefeasible payment in full in cash of
the Obligations in accordance with the provisions of the Notes and the Purchase
Agreement, the Security Interest granted hereby shall terminate and all rights
to the Copyright Collateral shall revert to Grantors or any other Person
entitled thereto.  At such time, Secured
Party shall execute and deliver, and authorize the filing of, appropriate
termination and release statements or other documents to terminate and release
such Security Interests.

 

7.             COUNTERPARTS.  This Copyright Security Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together constitute but one
and the same instrument.  In proving this
Copyright Security Agreement or any other Transaction Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is
sought.  Any signatures delivered by a
party by facsimile transmission or by e-mail transmission shall be deemed an
original signature hereto.

 

8.             CONSTRUCTION.  Unless the context of this Copyright Security
Agreement or any other Transaction Document clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and 
“including” are not limiting, and the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,”
and similar terms in this Copyright Security Agreement or any other Transaction
Document refer to 

 

2

 

this Copyright Security Agreement or such other Transaction Document,
as the case may be, as a whole and not to any particular provision of this
Copyright Security Agreement or such other Transaction Document, as the case
may be.  Section, subsection, clause,
schedule, and exhibit references herein are to this Copyright Security
Agreement unless otherwise specified. 
Any reference in this Copyright Security Agreement or in any other
Transaction Document to any agreement, instrument, or document shall include
all alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein or in the other Transaction Documents).  Any reference herein or in any other
Transaction Document to the satisfaction or repayment in full of the
Obligations shall mean the repayment in full in cash (or cash collateralization
in accordance with the terms hereof) of all Obligations other than unasserted
contingent indemnification Obligations. 
Any reference herein to any Person shall be construed to include such
Person’s successors and assigns.  Any
requirement of a writing contained herein or in any other Transaction Document
shall be satisfied by the transmission of a Record and any Record so
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.

 

9.             GOVERNING LAW.  THE VALIDITY OF THIS COPYRIGHT SECURITY AGREEMENT
AND THE OTHER TRANSACTION DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY
IN ANOTHER TRANSACTION DOCUMENT IN RESPECT OF SUCH OTHER TRANSACTION DOCUMENT),
THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE
RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

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

 

	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCEPTED AND ACKNOWLEDGED BY:

  
	
   

  	
   

  
	
   

  	
  CENTURION
  CREDIT FUNDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

[SIGNATURE PAGE TO COPYRIGHT
SECURITY AGREEMENT]

 

 

SCHEDULE I

TO

COPYRIGHT SECURITY AGREEMENT

 

U.S. COPYRIGHT REGISTRATIONS AND APPLICATIONS

 

	
  Grantor

  	
   

  	
  Title

  	
   

  	
  Registration /

  Application No.

  	
   

  	
  Registration /

  Application Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

COPYRIGHT SECURITY AGREEMENT

 

 

EXHIBIT B

 

PATENT SECURITY AGREEMENT

 

This
PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made
this        day of March, 2009, among the
Grantors listed on the signature pages hereof (collectively, jointly and
severally, “Grantors” and each individually “Grantor”), and CENTURION
CREDIT FUNDING LLC (together with its successors, the “Secured Party”).

 

W I T N E S S E T H:

 

WHEREAS, the
Secured Party and EVERGREEN ENERGY INC. and EVERGREEN OPERATIONS, LLC and
BUCKEYE INDUSTRIAL MINING CO. (collectively the “Companies” and each
individually a “Company”) are parties to that certain Note Purchase
Agreement bearing even date herewith (as may be amended, restated,
supplemented, replaced or otherwise modified from time to time, the “Purchase
Agreement”), and

 

WHEREAS,
pursuant to the terms and conditions of the Purchase Agreement, the Secured Party
has agreed to extend loans to the Companies, repayment of which is evidenced by
the Notes, and

 

WHEREAS, in
order to induce the Secured Party to enter into the Notes, the Purchase
Agreement and the other Transaction Documents and to induce the Secured Party
to make financial accommodations to the Companies as provided for in the
Purchase Agreement, Grantors have executed and delivered to Secured Party that
certain Security Agreement of even date herewith (including all annexes,
exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the “Security Agreement”);

 

WHEREAS,
pursuant to the Security Agreement, Grantors are required to execute and
deliver to Secured Party this Patent Security Agreement;

 

NOW, THEREFORE,
in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Grantor hereby agrees as follows:

 

1.             DEFINED TERMS.  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or the
Notes or the Purchase Agreement.

 

2.             GRANT OF SECURITY INTEREST
IN PATENT COLLATERAL.  Each
Grantor hereby unconditionally grants, assigns and pledges to Secured Party a
Security Interest in all of such Grantor’s right, title and interest in and to
the following, whether now owned or hereafter acquired or arising and wherever
located (collectively, the “Patent Collateral”):

 

(a)           all of its Patents including those referred to on Schedule I
hereto; and

 

(b)           all Proceeds of the foregoing.

 

 

3.             SECURITY
FOR OBLIGATIONS.  This Patent Security Agreement and the
Security Interest created hereby secures the payment and performance
of the Secured Obligations, whether now existing or arising hereafter.  Without limiting the generality of the
foregoing, this Patent Security Agreement secures the payment of all amounts
which constitute part of the Secured Obligations and would be owed by Grantors,
or any of them, to Secured Party whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.

 

4.             SECURITY AGREEMENT.  The Security Interest granted pursuant to
this Patent Security Agreement is granted in conjunction with the Security
Interest granted to Secured Party pursuant to the Security Agreement.  Each Grantor hereby acknowledges and affirms
that the rights and remedies of Secured Party with respect to the Security
Interest in the Patent Collateral made and granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.  To the extent there is any inconsistency
between this Patent Security Agreement and the Security Agreement, the Security
Agreement shall control.

 

5.             AUTHORIZATION
TO SUPPLEMENT.  If any Grantor shall obtain rights to any new
patentable inventions or become entitled to the benefit of any patent
application or patent for any reissue, division, or continuation, of any
patent, the provisions of this Patent Security Agreement shall automatically
apply thereto. Grantors shall give prompt (and in any event within fifteen (15)
Business Days) notice in writing to Secured Party with respect to any such new
patent rights.  Without limiting Grantors’
obligations under this Section 5, Grantors hereby authorize Secured
Party unilaterally to modify this Agreement by amending Schedule I to
include any such new patent rights of Grantors.  Notwithstanding the foregoing, no failure to
so modify this Patent Security Agreement or amend Schedule I shall in
any way affect, invalidate or detract from Secured Party’s continuing Security
Interest in all Collateral, whether or not listed on Schedule I.

 

6.             TERMINATION AND RELEASE.  Upon indefeasible payment in full in cash of
the Obligations in accordance with the provisions of the Notes and the Purchase
Agreement, the Security Interest granted hereby shall terminate and all rights
to the Patent Collateral shall revert to Grantors or any other Person entitled
thereto.  At such time, Secured Party
shall execute and deliver, and authorize the filing of, appropriate termination
and release statements or other documents to terminate and release such Security
Interests.

 

7.             COUNTERPARTS.  This Patent Security Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together constitute but one
and the same instrument.  In proving this
Patent Security Agreement or any other Transaction Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is sought.  Any signatures delivered by a party by
facsimile transmission or by e-mail transmission shall be deemed an original
signature hereto.

 

8.             CONSTRUCTION.  Unless the context of this Patent Security
Agreement or any other Transaction Document clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and 
“including” are 

 

3

 

not limiting, and the term “or” has, except where otherwise indicated,
the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,”
and similar terms in this Patent Security Agreement or any other Transaction
Document refer to this Patent Security Agreement or such other Transaction
Document, as the case may be, as a whole and not to any particular provision of
this Patent Security Agreement or such other Transaction Document, as the case
may be.  Section, subsection, clause,
schedule, and exhibit references herein are to this Patent Security Agreement
unless otherwise specified.  Any
reference in this Patent Security Agreement or in any other Transaction
Document to any agreement, instrument, or document shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements set forth herein or in the other Transaction Documents).  Any reference herein or in any other
Transaction Document to the satisfaction or repayment in full of the
Obligations shall mean the repayment in full in cash (or cash collateralization
in accordance with the terms hereof) of all Obligations other than unasserted
contingent indemnification Obligations. 
Any reference herein to any Person shall be construed to include such
Person’s successors and assigns.  Any
requirement of a writing contained herein or in any other Transaction Document
shall be satisfied by the transmission of a Record and any Record so
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.

 

9.             GOVERNING LAW.  THE VALIDITY OF THIS PATENT SECURITY
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE
CONTRARY IN ANOTHER TRANSACTION DOCUMENT IN RESPECT OF SUCH OTHER TRANSACTION
DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND
THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

[SIGNATURE PAGE FOLLOWS]

 

4

 

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

 

	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCEPTED AND ACKNOWLEDGED 

  
	
   

  	
  BY:

  
	
   

  	
   

  
	
   

  	
  CENTURION
  CREDIT FUNDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

 

 

SCHEDULE I

TO

PATENT
SECURITY AGREEMENT

 

U.S. PATENT REGISTRATIONS AND APPLICATIONS

 

	
  Grantor

  	
   

  	
  Title

  	
   

  	
  Registration /

  Application No.

  	
   

  	
  Registration /

  Application Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PATENT SECURITY AGREEMENT

 

 

EXHIBIT C

 

Annex 1 to Pledge and Security Agreement

 

PLEDGED INTERESTS ADDENDUM

 

This Pledged Interests
Addendum, dated as of
                  
      , 20      ,
is delivered pursuant to Section 6 of the Security Agreement
referred to below.  The undersigned
hereby agrees that this Pledged Interests Addendum may be attached to that
certain Security Agreement, dated as of March     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Security Agreement”), made by the undersigned, together with
the other Grantors named therein, to CENTURION CREDIT FUNDING LLC, as Secured
Party.  Initially capitalized terms used
but not defined herein shall have the meaning ascribed to such terms in the
Security Agreement or the Notes or the Purchase Agreement.  The undersigned hereby agrees that the
additional interests listed on this Pledged Interests Addendum as set forth
below shall be and become part of the Pledged Interests pledged by the undersigned
to the Secured Party in the Security Agreement and any pledged company set
forth on this Pledged Interests Addendum as set forth below shall be and become
a “Pledged Company” under the Security Agreement, each with the same force and
effect as if originally named therein.

 

The undersigned hereby
certifies that the representations and warranties set forth in Section 4
of the Security Agreement of the undersigned are true and correct as to the
Pledged Interests listed herein on and as of the date hereof.

 

	
   

  	
  [                                      ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title

  	
   

  

 

PLEDGED INTERESTS ADDENDUM

 

 

	
  Name of Pledgor

  	
   

  	
  Name of Pledged

  Company

  	
   

  	
  Number of

  Shares/Units

  	
   

  	
  Class of

  Interests

  	
   

  	
  Percentage of

  Class Owned

  	
   

  	
  Certificate

  Nos.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PLEDGED INTERESTS ADDENDUM

 

 

EXHIBIT D

 

TRADEMARK SECURITY AGREEMENT

 

This
TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is
made this        day of March, 2009, among
Grantors listed on the signature pages hereof (collectively, jointly and
severally, “Grantors” and each individually “Grantor”), and CENTURION
CREDIT FUNDING LLC (together with its successors, the “Secured Party”).

 

W I T N E S S E T H:

 

WHEREAS, the Secured Party and EVERGREEN ENERGY INC.
and EVERGREEN OPERATIONS, LLC and BUCKEYE INDUSTRIAL MINING CO. (collectively,
the “Companies” and each individually a “Company”) are parties to
that certain Note Purchase Agreement bearing even date herewith (as may be
amended, restated, supplemented, replaced or otherwise modified from time to
time, the “Purchase Agreement”), and

 

WHEREAS, pursuant to the terms and conditions of the
Purchase Agreement, the Secured Party has agreed to extend loans to the
Companies, repayment of which is evidenced by the Notes, and

 

WHEREAS, in order to induce the Secured Party to
enter into the Notes, the Purchase Agreement and the other Transaction
Documents and to induce the Secured Party to make financial accommodations to
the Companies as provided for in the Purchase Agreement, Grantors have executed
and delivered to Secured Party that certain Security Agreement of even date
herewith (including all annexes, exhibits or schedules thereto, as from time to
time amended, restated, supplemented or otherwise modified, the “Security
Agreement”);

 

WHEREAS, pursuant to the Security Agreement,
Grantors are required to execute and deliver to Secured Party this Trademark
Security Agreement;

 

NOW,
THEREFORE, in
consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Grantor hereby agrees as follows:

 

1.             DEFINED
TERMS.  All capitalized terms used
but not otherwise defined herein have the meanings given to them in the
Security Agreement or the Notes or the Purchase Agreement.

 

2.             GRANT
OF SECURITY INTEREST IN TRADEMARK COLLATERAL.  Each Grantor hereby unconditionally grants,
assigns and pledges to Secured Party a Security Interest in all of such Grantor’s
right, title and interest in and to the following, whether now owned or
hereafter acquired or arising and wherever located (collectively, the “Trademark
Collateral”):

 

(a)           all
of its Trademarks including those referred to on Schedule I hereto; and

 

(b)           all
Proceeds of the foregoing.

 

 

3.             SECURITY
FOR OBLIGATIONS.  This Trademark
Security Agreement and the Security Interest created hereby secures the payment
and performance of the Secured Obligations, whether now existing or arising
hereafter.  Without limiting the
generality of the foregoing, this Trademark Security Agreement secures the
payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Secured Party whether or not they
are unenforceable or not allowable due to the existence of an Insolvency Proceeding
involving any Grantor.

 

4.             SECURITY
AGREEMENT.  The Security Interest
granted pursuant to this Trademark Security Agreement is granted in conjunction
with the Security Interest granted to Secured Party pursuant to the Security
Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of Secured Party with
respect to the Security Interest in the Trademark Collateral made and granted
hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.  To the extent there is any
inconsistency between this Trademark Security Agreement and the Security
Agreement, the Security Agreement shall control.

 

5.             AUTHORIZATION TO SUPPLEMENT.
 If any Grantor shall obtain
rights to any new trademarks, the provisions of this Trademark Security
Agreement shall automatically apply thereto. Grantors shall give prompt (and in
any event within fifteen (15) Business Days) notice in writing to Secured Party
with respect to any such new trademarks or renewal or extension of any
trademark registration.  Without limiting
Grantors’ obligations under this Section 5, Grantors hereby
authorize Secured Party unilaterally to modify this Agreement by amending Schedule
I to include any such new trademark rights of Grantors.  Notwithstanding the foregoing, no failure to
so modify this Trademark Security Agreement or amend Schedule I shall in
any way affect, invalidate or detract from Secured Party’s continuing Security
Interest in all Collateral, whether or not listed on Schedule I.

 

6.             TERMINATION
AND RELEASE.  Upon payment in full in
cash of the Obligations in accordance with the provisions of the Notes and the
Purchase Agreement, the Security Interest granted hereby shall terminate and
all rights to the Trademark Collateral shall revert to Grantors or any other
Person entitled thereto.  At such time,
Secured Party shall execute and deliver, and authorize the filing of, appropriate
termination and release statements or other documents to terminate and release
such Security Interests.

 

7.             COUNTERPARTS.  This Trademark Security Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such separate counterparts shall together constitute but one
and the same instrument.  In proving this
Trademark Security Agreement or any other Transaction Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is
sought.  Any signatures delivered by a
party by facsimile transmission or by e-mail transmission shall be deemed an
original signature hereto.

 

8.             CONSTRUCTION.  Unless the context of this Trademark Security
Agreement or any other Transaction Document clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and 
“including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning 

 

2

 

represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,”
and similar terms in this Trademark Security Agreement or any other Transaction
Document refer to this Trademark Security Agreement or such other Transaction
Document, as the case may be, as a whole and not to any particular provision of
this Trademark Security Agreement or such other Transaction Document, as the
case may be.  Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified.  Any reference in
this Trademark Security Agreement or in any other Transaction Document to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein or in the other Transaction Documents).  Any reference herein or in any other
Transaction Document to the satisfaction or repayment in full of the Obligations
shall mean the repayment in full in cash (or cash collateralization in
accordance with the terms hereof) of all Obligations other than unasserted
contingent indemnification Obligations and other than any Hedge Agreement
Obligations that, at such time, are allowed by the applicable Hedge Agreement
Provider to remain outstanding and that are not required by the provisions of
the Credit Agreement to be repaid or cash collateralized.  Any reference herein to any Person shall be
construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein
or in any other Transaction Document shall be satisfied by the transmission of
a Record and any Record so transmitted shall constitute a representation and
warranty as to the accuracy and completeness of the information contained
therein.

 

9.             GOVERNING
LAW.  THE VALIDITY OF THIS TRADEMARK
SECURITY AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS (UNLESS EXPRESSLY
PROVIDED TO THE CONTRARY IN ANOTHER TRANSACTION DOCUMENT IN RESPECT OF SUCH
OTHER TRANSACTION DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

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

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ACCEPTED
  AND ACKNOWLEDGED BY:

  
	
   

  	
   

  	
   

  
	
   

  	
  CENTURION CREDIT FUNDING LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

[SIGNATURE PAGE TO
TRADEMARK SECURITY AGREEMENT]

 

 

SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

 

U.S. Trademark Registrations/Applications

 

	
  Grantor

  	
   

  	
  Mark

  	
   

  	
  Application/

  Registration No.

  	
   

  	
  App/Reg Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

TRADEMARK SECURITY AGREEMENT

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