Exhibit 10.2

 

[Execution]

 

 

CREDIT AGREEMENT

 

dated as of April 24, 2003

 

among

 

WESTERN GAS RESOURCES, INC.

as the Borrower

 

BANK OF AMERICA, N.A.

as Administrative Agent and L/C Issuer

 

BANK ONE, NA

and

FLEET NATIONAL BANK

as Co-Syndication Agents

 

THE ROYAL BANK OF SCOTLAND plc

and

WACHOVIA BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents

 

and

 

THE OTHER LENDERS PARTY HERETO

 

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BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Book Manager

 

 

 

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TABLE OF CONTENTS

 

Section

 

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

1.01

 

Defined Terms.

1.02

 

Other Interpretive Provisions.

1.03

 

Accounting Terms.

1.04

 

Rounding.

1.05

 

References to Agreements and Laws.

1.06

 

Times of Day.

1.07

 

Letter of Credit Amounts.

 

 

 

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01

 

Loans.

2.02

 

Borrowings, Conversions and Continuations of Loans.

2.03

 

Letters of Credit.

2.04

 

Prepayments.

2.05

 

Termination or Reduction of Commitments.

2.06

 

Repayment of Loans.

2.07

 

Interest.

2.08

 

Fees.

2.09

 

Computation of Interest and Fees.

2.10

 

Evidence of Debt.

2.11

 

Payments Generally.

2.12

 

Sharing of Payments.

2.13

 

Increase in Commitments.

 

 

 

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

 

 

 

3.01

 

Taxes.

3.02

 

Illegality.

3.03

 

Inability to Determine Rates.

3.04

 

Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate
Loans.

3.05

 

Funding Losses.

3.06

 

Matters Applicable to all Requests for Compensation.

3.07

 

Survival.

 

 

 

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

 

 

4.01

 

Conditions of Initial Credit Extension.

4.02

 

Conditions to all Credit Extensions.

 

 

 

ARTICLE V. REPRESENTATIONS AND WARRANTIES

 

 

 

5.01

 

Existence, Qualification and Power; Compliance with Laws.

5.02

 

Authorization; No Contravention.

5.03

 

Governmental Authorization; Other Consents.

5.04

 

Binding Effect.

5.05

 

Financial Statements; No Material Adverse Effect.

5.06

 

Litigation.

5.07

 

No Default.

5.08

 

Ownership of Property; Liens.

 

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5.09

 

Environmental Compliance.

5.10

 

Insurance.

5.11

 

Taxes.

5.12

 

ERISA Compliance.

5.13

 

Subsidiaries.

5.14

 

Margin Regulations; Investment Company Act; Public Utility Holding Company Act.

5.15

 

Disclosure.

5.16

 

Compliance with Laws.

5.17

 

Tax Shelter Regulations.

 

 

 

ARTICLE VI. AFFIRMATIVE COVENANTS

 

 

 

6.01

 

Financial Statements.

6.02

 

Certificates; Other Information.

6.03

 

Notices.

6.04

 

Payment of Obligations.

6.05

 

Preservation of Existence, Etc.

6.06

 

Maintenance of Properties.

6.07

 

Maintenance of Insurance.

6.08

 

Compliance with Laws.

6.09

 

Books and Records.

6.10

 

Inspection Rights.

6.11

 

Use of Proceeds.

6.12

 

Guaranties of Borrower’s Subsidiaries.

6.13

 

Additional Guarantors and Stock Pledge.

6.14

 

Agreement to Deliver Mortgages.

6.15

 

Title Review.

6.16

 

Perfection and Protection of Security Interests and Liens.

6.17

 

Production Proceeds.

6.18

 

Sale or Disposal of Property.

6.19

 

Limitation on Effectiveness.

 

 

 

ARTICLE VII. NEGATIVE COVENANTS

 

 

 

7.01

 

Liens.

7.02

 

Investments.

7.03

 

Indebtedness.

7.04

 

Fundamental Changes; Issuance of Stock.

7.05

 

Dispositions.

7.06

 

Restricted Payments.

7.07

 

Change in Nature of Business.

7.08

 

Transactions with Affiliates.

7.09

 

Burdensome Agreements.

7.10

 

Use of Proceeds.

7.11

 

Limitation for Net Products Exposure.

7.12

 

Financial Covenants.

 

 

 

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

 

 

 

8.01

 

Events of Default.

8.02

 

Remedies Upon Event of Default.

8.03

 

Application of Funds.

 

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ARTICLE IX. ADMINISTRATIVE AGENT

 

 

 

9.01

 

Appointment and Authorization of Administrative Agent.

9.02

 

Delegation of Duties.

9.03

 

Liability of Administrative Agent

9.04

 

Reliance by Administrative Agent.

9.05

 

Notice of Default.

9.06

 

Credit Decision; Disclosure of Information by Administrative Agent.

9.07

 

Indemnification of Administrative Agent.

9.08

 

Administrative Agent in its Individual Capacity.

9.09

 

Successor Administrative Agent.

9.10

 

Administrative Agent May File Proofs of Claim.

9.11

 

Collateral and Guaranty Matters.

9.12

 

Other Agents; Arrangers and Managers.

 

 

 

ARTICLE X. MISCELLANEOUS

 

 

 

10.01

 

Amendments, Etc.

10.02

 

Notices and Other Communications; Facsimile Copies.

10.03

 

No Waiver; Cumulative Remedies.

10.04

 

Attorney Costs, Expenses and Taxes.

10.05

 

Indemnification by the Borrower.

10.06

 

Payments Set Aside.

10.07

 

Successors and Assigns.

10.08

 

Confidentiality.

10.09

 

Set-off.

10.10

 

Interest Rate Limitation.

10.11

 

Counterparts.

10.12

 

Integration.

10.13

 

Survival of Representations and Warranties.

10.14

 

Severability.

10.15

 

Tax Forms.

10.16

 

Replacement of Lenders; Replacement of Rating Agency.

10.17

 

Governing Law.

10.18

 

Waiver of Right to Trial by Jury.

10.19

 

ENTIRE AGREEMENT.

10.20

 

Restatement.

 

 

 

SIGNATURES

 

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SCHEDULES

 

 

 

2.01

 

Commitments and Pro Rata Shares

5.05

 

Material Indebtedness

5.12

 

ERISA Compliance

5.13

 

Subsidiaries and Other Equity Investments

7.01

 

Existing Liens

7.02

 

Joint Ventures

7.03

 

Existing Indebtedness

10.02

 

Administrative Agent’s Office, Certain Addresses for Notices

 

 

 

EXHIBITS

 

 

 

 

 

 

 

Form of

A

 

Loan Notice

B

 

Note

C

 

Compliance Certificate

D

 

Assignment and Assumption

E

 

Guaranty

F

 

Opinion Matters

G

 

Form of Mortgage

 

iv

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of April 24, 2003, among
WESTERN GAS RESOURCES, INC., a Delaware corporation (the “Borrower”), each
lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent
and L/C Issuer.

 

The Borrower entered into a Loan Agreement, dated as of April 29, 1999, among
the Borrower, Bank of America, N.A., as agent, and a syndicate of lenders, as
from time to time supplemented or amended (the “Existing Credit Agreement”)
pursuant to which such lenders made revolving loans to the Borrower.

 

The Borrower has requested that the Lenders amend and restate the Existing
Credit Agreement in its entirety, and the Lenders are willing to do so on the
terms and conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS

 

1.01        Defined Terms.  As used in this Agreement, the following terms shall
have the meanings set forth below:

 

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.  “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled” have meanings correlative thereto.  Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 15% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.

 

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“Agent-Related Persons” means the Administrative Agent, together with its
Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.

 

“Aggregate Commitments” means as of the date hereof the Commitments of all the
Lenders in the aggregate amount of $300,000,000 as increased from time to time
pursuant to Section 2.13.

 

“Agreement” means this Credit Agreement.

 

“Applicable Rate” means, from time to time, the following percentages per annum
for each category of Facility Fee, Eurodollar Rate, Letters of Credit and Base
Rate set forth below, respectively, based upon the Debt to Capitalization Ratio
as set forth below:

 

 

Applicable Rate

 

Pricing
Level

 

Debt to
Capitalization
Ratio

 

Facility Fee

 

Eurodollar
Rate +

 

Base Rate  +

 

Letters of
Credit

1

 

<0.35:1

 

0.300

%

1.200

%

0.250

%

2

 

>0.35:1 <0.40:1

 

0.375

%

1.250

%

0.375

%

3

 

>0.40:1 <0.45:1

 

0.375

%

1.375

%

0.500

%

4

 

>0.45:1 <0.50:1

 

0.500

%

1.500

%

0.750

%

5

 

>0.50:1

 

0.500

%

1.750

%

1.000

%

 

Any increase or decrease in the Applicable Rate resulting from a change in the
Debt to Capitalization Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b); provided, however, that (i) if the Borrower or a Subsidiary is
making a significant acquisition or selling significant assets, the Borrower may
request a decrease or increase in the Applicable Rate during a fiscal quarter
and deliver to the Administrative Agent and Lenders with such request proforma
financial statements in form acceptable to Administrative Agent together with a
calculation of the Debt to Capitalization Ratio based upon such financial
statements and if Administrative Agent determines that the Borrower’s
calculation is correct, the reduced or increased Applicable Rate shall become
effective on the fifth Business Day following the date on which notice thereof
is given to Administrative Agent and to Lenders, and (ii) if a Compliance
Certificate is not delivered when due in accordance with Section 6.02(b), then
Pricing Level 5 shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered.  The Applicable
Rate in effect from the Closing Date through the first Business Day thereafter
on which such a Compliance Certificate is received by Agent, shall be determined
based upon Pricing Level 3.

 

“Arranger” means Banc of America Securities LLC, in its capacity as sole lead
arranger and sole book manager.

 

2

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“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit D.

 

“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of external counsel.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any operating lease of any Person, all future payments
owed under the lease or any Synthetic Lease Obligation, the capitalized amount
of the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

 

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2002,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.05, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the of
the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate.”  The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrowing” means a Committed Borrowing.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

 

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“Cash Collateralize” has the meaning specified in Section 2.03(g).

 

“Change of Control” means an event or series of events by which:

 

(a)           any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any employee
benefit plan of such person or its subsidiaries, and any person or entity acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan) after the Closing Date becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire (such right, an “option
right”), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 25% or more of the equity securities of the
Borrower entitled to vote for members of the board of directors of the Borrower
on a fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right); or

 

(b)           during any period of 24 consecutive months, a majority of the
members of the board of directors of the Borrower cease to be composed of
individuals (i) who were members of that board or equivalent governing body on
the first day of such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors); or

 

(c)           the occurrence of a “Change of Control” as defined in the
Indenture.

 

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 4.01 (or, in the case of
Section 4.01(b), waived by the Person entitled to receive the applicable
payment).

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all real and personal property subject to the Security
Documents.

 

“Commitment” means, as to each Lender, its obligation to (a) make Loans to the
Borrower pursuant to Section 2.01 and (b) purchase participations in L/C
Obligations, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth

 

4

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opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

 

“Commitment Letter” means that certain agreement dated February 13, 2003, among
the Borrower, Administrative Agent and Arranger.

 

“Committed Borrowing” means a borrowing consisting of simultaneous Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

 

“Consolidated EBITDA” means, for any period, EBITDA of the Borrower and its
Subsidiaries for such period on a consolidated basis

 

“Consolidated Funded Indebtedness” means, as of any date of determination, for
the Borrower and its Subsidiaries calculated on a consolidated basis, the sum of
(a) the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness (e.g., seller
financings), (c) all direct obligations arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments, (d) all obligations in respect of the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business), (e) Attributable Indebtedness in
respect of capital leases and operating leases (but only the aggregate amount
thereof which at the time in question exceeds $35,000,000 excluding Obligations
arising under oil and gas leases, gas compressor and gas processing plant site
leases, real estate leases for office space used by the Borrower and leases for
vehicles, office equipment and data processing equipment) and Synthetic Lease
Obligations, (f) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (e) above of Persons
other than the Borrower or any Subsidiary, and (g) all Indebtedness of the types
referred to in clauses (a) through (f) above of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which the Borrower or a Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the
Borrower or such Subsidiary.

 

“Consolidated Interest Charges” means, for any period, Interest Charges for the
Borrower and its Subsidiaries calculated on a consolidated basis.

 

“Consolidated Net Income” means, for any period, Net Income for the Borrower and
its Subsidiaries calculated on a consolidated basis.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement or instrument to which such Person is
a party or by which it or any of its property is bound.

 

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“Control” has the meaning specified in the definition of “Affiliate.”

 

“CP Debt” means unsecured Indebtedness in the form of commercial paper issued by
Borrower which meets the following requirements: (i) such Indebtedness has a
maturity of not more than 270 days after the date of issuance thereof, (ii) the
offering of such Indebtedness is not required to be registered under the
Securities Act of 1933, as amended, (iii) such Indebtedness is not the subject
of a Guarantee of any Loan Party, (iv) at the time Borrower incurs such
Indebtedness, no Default or Event of Default shall have occurred and be
continuing hereunder, and (v) the documentation evidencing such Indebtedness
shall contain no terms, conditions or defaults (other than pricing and back-up
availability under this Agreement) which are more favorable to the third party
creditor than those contained in this Agreement are to Lenders, as determined by
Required Lenders in their discretion (provided that Required Lenders shall make
any such determination at the time the initial documentation covering the
issuance of CP Debt is executed and delivered and each time such documentation
is modified, taking into consideration any amendments or modifications to this
Agreement then in effect), and shall not contain any provision which attempts to
modify, amend or restrict any of the rights or remedies of Administrative Agent
or Lenders hereunder or under any of the other Loan Documents.

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

 

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of the Borrower’s
Indebtedness under this Agreement; provided that if a Debt Rating is issued by
each of the foregoing rating agencies, then the lower of such Debt Ratings shall
apply.

 

“Debt Rating Downgrade” means that (i) a Debt Rating is not issued by S&P on or
before September 30, 2003, or (ii) a Debt Rating is not issued by Moody’s on or
before September 30, 2003, or (iii) the Debt Rating by S & P is issued at a
rating less than BB or is subsequently reduced to BB — or lower, or (iv) the
Debt Rating by Moody’s is issued at a rating less than Ba2 or is subsequently
reduced to Ba3 or lower, or (v) either the Debt Rating by S&P or the Debt Rating
by Moody’s is withdrawn; provided that if either of such Debt Ratings is
withdrawn due to a condition or event that is not caused by or attributable to
Borrower or Borrower’s financial condition and/or operations, such withdrawal
shall not constitute a Debt Rating Downgrade if (A) within ninety (90) days
after the date on which such Debt Rating is withdrawn, Required Lenders have
approved a Replacement Rating Agency selected by Borrower and Administrative
Agent in accordance with the terms of Section 10.16(b), and (B) such Replacement
Rating Agency has issued a Debt Rating acceptable to Required Lenders and
Administrative Agent within a reasonable period of time after such Replacement
Rating Agency is approved by Required Lenders, such reasonable time period to be
determined by Required Lenders and Administrative Agent.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the

 

6

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United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

 

“Debt Securities” means the $50,000,000 aggregate principal amount of 7.61%
Senior Notes due July 28, 2007, $25,000,000 aggregate principal amount of 7.99%
Senior Notes due October 27, 2003, $25,000,000 aggregate principal amount of
9.24% Senior Notes due October 27, 2004, $25,000,000 aggregate principal amount
of 6.36% Senior Notes, Series H, due January 17, 2008, $25,000,000 aggregate
principal amount of 7.23% Senior Notes due December 27, 2003, issued by Borrower
prior to the date hereof, and all other senior notes from time to time hereafter
issued by the Borrower pursuant to that certain Third Amended and Restated
Master Shelf Agreement effective as of January 13, 2003, between the Borrower
and The Prudential Insurance Company of America, Prudential Investment
Management, Inc. (“Prudential”), Pruco Life Insurance Company and certain
Prudential Affiliates, as amended, supplemented, modified and restated from time
to time in an aggregate principal amount not to exceed $265,000,000, outstanding
at any time.

 

“Debt to Capitalization Ratio” means, at the time of determination, the ratio of
(a) Consolidated Funded Indebtedness to (b) the sum of the Consolidated Funded
Indebtedness plus Shareholders’ Equity.

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the
fullest extent permitted by applicable Laws.

 

“Defaulting Lender” means any Lender that, at the time of determination, (a) has
failed  to fund any portion of the Loans or participations in L/C Obligations
required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

 

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“EBITDA” means for any Person for any period, an amount equal to Consolidated
Net Income of such Person for such period plus (a) the following to the extent
deducted in calculating such Consolidated Net Income: (i) Interest Charges for
such period, (ii) the provision for federal, state, local and foreign income
taxes payable by such Person for such period, (iii) the amount of depreciation
and amortization expense deducted in determining such Net Income and (iv) other
non cash items deducted in determining such Consolidated Net Income and minus
(b) other non-cash items increasing such Consolidated Net Income for such
period.

 

“Eligible Assignee” has the meaning specified in Section 10.07(g).

 

“Engineering Report” means each engineering report delivered pursuant to Section
6.02.

 

“Environmental Laws” means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; or
(e) the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.

 

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“Eurodollar Rate” means for any Interest Period with respect to any Eurodollar
Rate Loan:

 

(a)           the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or

 

(b)           if the rate referenced in the preceding clause (a) does not appear
on such page or service or such page or service shall not be available, the rate
per annum equal to the rate determined by the Administrative Agent to be the
offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or

 

(c)           if the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum determined by the Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America and
with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London interbank eurodollar market
at their request at approximately 4:00 p.m. (London time) two Business Days
prior to the first day of such Interest Period.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Existing Credit Agreement” has the meaning specified in the preamble of this
Agreement.

 

“Existing Letters of Credit” means those letters of credit issued by
Administrative Agent under the Existing Credit Agreement prior to the date
hereof that are outstanding as of the date hereof.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if

 

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no such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary,
to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on
such transactions as determined by the Administrative Agent.

 

“Fee Letter” means the letter agreement, dated February 13, 2003, among the
Borrower, the Administrative Agent and the Arranger.

 

“FERC” means any federal energy regulatory commission.

 

“Fixed Charge Coverage Ratio” means, as of the end of any fiscal quarter, the
ratio of (a) Consolidated EBITDA for the four consecutive fiscal quarters then
ended to (b) the sum of Consolidated Interest Charges for such period plus the
aggregate amount of dividends paid or declared by the Borrower during such
period in respect of the Preferred Stock, not to exceed four regularly scheduled
dividends and all special dividends.  For purposes of the “Fixed Charge Coverage
Ratio,” EBITDA shall be calculated excluding gains and losses on asset sales and
other extraordinary items.

 

“Foreign Lender” has the meaning specified in Section 10.15(a)(i).

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee

 

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in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof
(in whole or in part), or (b) any Lien (other than Permitted Liens as defined in
Section 7.01) on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person.  The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantors” means MIGC, MGTC, MGR, WGRT, WGW, Lance and any other Domestic
Subsidiaries of the Borrower required to deliver a Guarantee of the Obligations
pursuant to Section 6.12.

 

“Guaranty” means the Guaranty made by the Guarantors in favor of the
Administrative Agent on behalf of the Lenders, substantially in the form of
Exhibit E.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(a)           all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

 

(b)           all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

 

(c)           net obligations of such Person under any Swap Contract;

 

(d)           all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);

 

(e)           indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

(f)            capital leases, operating leases and Synthetic Lease Obligations;

 

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(g)           all Guarantees of such Person in respect of any of the foregoing;

 

(h)           obligations with respect to payments received in consideration of
oil, gas, or other minerals yet to be acquired or produced at the time of
payment (including obligations under “take-or-pay” contracts to deliver gas in
return for payments already received and the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment); or

 

(i)            obligations to deliver goods or services in consideration of
advance payments therefor.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.  The remaining amount of any capital lease, operating
lease or Synthetic Lease Obligation as of any date shall be deemed to be the
amount of Attributable Indebtedness in respect thereof as of such date.

 

“Indemnified Liabilities” has the meaning set forth in Section 10.05.

 

“Indemnitees” has the meaning set forth in Section 10.05.

 

“Indenture” means the Indenture dated June 15, 1999 among the Borrower,
Guarantors and Chase Bank of Texas National Association, as trustee, relating to
the issuance of up to $225,000,000 aggregate principal amount of the Borrower’s
senior subordinated notes, as such Indenture was in effect on June 15, 1999.

 

“Intercreditor Agreement” means the Intercreditor Agreement of even date
herewith among Administrative Agent, Lenders and Prudential Investment
Management, Inc.

 

“Interest Charges” means for any Person for any Period, all interest accrued
during such Period by such Person in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date.

 

“Interest Period” means as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate

 

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Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Loan Notice; provided that:

 

(i)            any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Rate Loan, such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day;

 

(ii)           any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

 

(iii)          no Interest Period shall extend beyond the Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit.  For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“Lance” means Lance Oil & Gas Company, Inc., a Delaware corporation.

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including by any Governmental Authority
charged with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

 

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“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the L/C Issuer.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“Letter of Credit” means any letter of credit issued hereunder and shall include
the Existing Letters of Credit.  A Letter of Credit may be a commercial letter
of credit or a standby letter of credit.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

 

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).

 

“Letter of Credit Sublimit” means an amount equal to $30,000,000.  The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“Lien” means, with respect to any property or assets, any right or interest
therein of a creditor to secure Indebtedness owed to him or any other
arrangement with such creditor which provides for the payment of such
Indebtedness out of such property or assets or which allows him to have such
Indebtedness satisfied out of such property or assets prior to the general
creditors of any owner thereof, including any lien, mortgage, security interest,
pledge, deposit, production payment, rights of a vendor under any title
retention or conditional sale agreement or lease substantially equivalent
thereto, tax lien, mechanic’s or materialman’s lien, or any other charge or
encumbrance for security purposes, whether arising by law or agreement or
otherwise, but excluding any right of offset which arises without agreement in
the ordinary course of business.  “Lien” also means any filed financing
statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.

 

“Loan” has the meaning specified in Section 2.01.

 

 “Loan Documents” means this Agreement, each Note, the Letters of Credit, the
Fee Letter, the Commitment Letter, the Guaranty, the Security Documents and all
other agreements, certificates, documents, instruments and writings at any time
delivered in connection herewith or

 

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therewith (excluding term sheets, commitment letters, correspondence and similar
documents used in the negotiation hereof and further excluding all offering
memorandums prepared by Administrative Agent or its Affiliates for use in
connection with the Loans).

 

“Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“Material Domestic Subsidiary” means a Domestic Subsidiary that is required to
execute and deliver a Guarantee pursuant to Section 6.12.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), or financial condition of the Borrower or the Borrower and its
Subsidiaries taken as a whole ,provided, however, that a downgrade by S&P and/or
Moody’s of their respective Debt Rating shall not, in and of itself, be deemed
to be a Material Adverse Effect; (b) a material impairment of the ability of any
Loan Party to perform its obligations under any Loan Document to which it is a
party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which it
is a party.

 

“Maturity Date” means April 24, 2007.

 

“MGTC” means MGTC, Inc., a Wyoming corporation.

 

“MGR” means Mountain Gas Resources, Inc., a Delaware corporation.

 

“MIGC” means MIGC, Inc., a Delaware corporation.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” means, collectively, any Mortgage, Assignment, Security Agreement,
Fixture Filing, and Financing Statement delivered by any one or more Subsidiary
of Borrower pursuant to the terms of Section 6.14.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

 

“Net Income” means, for any period, for any Person, the net income of the
Borrower and its Subsidiaries for that period.

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

 

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“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Outstanding Amount” means (i) with respect to Loans, on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Loans, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.

 

“Participant” has the meaning specified in Section 10.07(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

 

“Permitted Lien” has the meaning set forth in Section 7.01.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

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“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established by the Borrower or, with respect to any such plan
that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Preferred Stock” means all issued and outstanding preferred stock of the
Borrower, as the same may change from time to time, including but not limited to
the 2,760,000 shares of $2.625 Cumulative Convertible Preferred Stock of the
Borrower.

 

“Pro Rata Share” means, with respect to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
and the denominator of which is the amount of the Aggregate Commitments at such
time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof.  The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“PUC Subsidiary” means any Subsidiary that is required to be regulated as a
public utility under applicable Law and that is prohibited under such applicable
Law from incurring a Guaranty and/or granting Liens or security interests in any
Collateral, in each case without the approval of the applicable public utility
commission having regulatory authority over such PUC Subsidiary or FERC.

 

“Rating Agency” means any of S&P, Moody’s or the Replacement Rating Agency.

 

“Register” has the meaning set forth in Section 10.07(c).

 

“Replacement Rating Agency” has the meaning set forth in Section 10.16(b).

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Loans, a Loan Notice and (b) with respect to an L/C Credit
Extension, a Letter of Credit Application.

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 66-2/3% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 66-2/3% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations being
deemed “held” by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Total Outstandings held or

 

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deemed held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

“Responsible Officer” means (i) for all Loan Documents, including Loan Notices,
the chief executive officer, president, executive vice president, chief
financial officer, treasurer or assistant treasurer of a Loan Party and (ii) in
addition, for Loan Notices , the treasury director or senior credit analyst of
the Borrower.  Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

 

“Restricted Payment” means (i) any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
equity interest of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such capital stock or
other equity interest or (ii) any purchase, repurchase, defeasance or prepayment
of the Debt Securities or the Subordinated Debt excluding regularly scheduled
payments of principal and interest.

 

“Risk Management Policy” means that certain Western Gas Resources, Inc. Market
Risk Management Policy, as approved by the Board of Directors on September 20,
2002, as supplemented or amended from time to time, a true and correct copy of
which has been delivered to the Administrative Agent.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Security Documents” means all security agreements, deeds of trust, mortgages,
chattel mortgages, pledges, guaranties, financing statements, continuation
statements, extension agreements and other agreements or instruments now,
heretofore, or hereafter delivered by Borrower or any Subsidiary to
Administrative Agent in connection with this Agreement or any transaction
contemplated hereby to secure or guarantee the payment of any part of the
Obligations or the performance of the other duties and obligations of Borrower
or any Subsidiary under the Loan Documents.

 

“Senior Debt” means all of the Obligations and all Indebtedness owing by
Borrower and its Subsidiaries under the Debt Securities.

 

“Senior Debt to Capitalization Ratio” means, at the time of determination, the
ratio of (a) the Senior Debt to (b) the sum of the Consolidated Funded
Indebtedness plus Shareholders’ Equity.  (Determination will be made in
connection with the delivery of the Compliance Certificate pursuant to Section
6.02(b).

 

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“Shareholders’ Equity” means the remainder of (i) Borrower’s Consolidated assets
minus (ii) the sum of (x) Borrower’s Consolidated liabilities plus (y) all
treasury stock of Borrower and its Subsidiaries plus (z) all intangible assets
of Borrower and its Subsidiaries (including without limitation all patents,
copyrights, licenses, franchises, goodwill, trade names and trade secrets);
provided that the term “Shareholder’s Equity” shall include the book value of
long-term gas contracts with producers that Borrower assumes in connection with
acquisitions that are reflected on the books of Borrower as assets.

 

“Stock Option Agreements” means, collectively, those certain Agreements to
Provide Loan(s) to enable certain employees to exercise stock options by and
among Borrower and certain of its key employees.

 

“Stock Pledge” means, collectively the pledge agreements necessary to pledge all
of the equity interests in the Material Domestic Subsidiaries and 65% of the
equity interests in Borrower’s foreign Subsidiaries, in form and substance
acceptable to Administrative Agent.

 

“Subordinated Debt” means unsecured Indebtedness issued by Borrower that is
subordinated by its terms to the Obligations and the Debt Securities on terms
acceptable to Required Lenders and guarantees thereof by Borrower’s Subsidiaries
each of which is subordinated by its terms to the Obligations and the Debt
Securities on terms acceptable to Required Lenders.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person, provided that associations, joint ventures or other
relationships (a) which are established pursuant to a standard form operating
agreement or similar agreement or which are partnerships for purposes of federal
income taxation only, (b) which are not corporations or partnerships (or subject
to the Uniform Partnership Act) under applicable state law, and (c) whose
businesses are limited to the exploration, development and operation of oil,
gas, mineral, gas gathering or gas processing properties and interests owned
directly by the parties in such associations, joint ventures or relationships,
shall not be deemed to be “Subsidiaries” of such Person.  Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing),

 

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whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment), excluding with respect to this
clause (ii) agreements entered into in the ordinary course of such Person’s
business.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

 

“Type” means with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).

 

“WGRT” means Western Gas Resources Texas, Inc., a Texas corporation and
wholly-owned subsidiary of Borrower.

 

“WGW” means Western Gas Wyoming, L.L.C., a Wyoming limited liability company.

 

“WPS” means Western Power Services, Inc., a Delaware corporation and
wholly-owned subsidiary of Borrower.

 

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1.02        Other Interpretive Provisions.  With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

 

(a)           The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

 

(b)           (i)            The words “herein,” “hereto,” “hereof” and
“hereunder” and words of similar import when used in any Loan Document shall
refer to such Loan Document as a whole and not to any particular provision
thereof.

 

(ii)           Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.

 

(iii)          The term “including” is by way of example and not limitation.

 

(iv)          The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

(c)           In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through” means “to and
including.”

 

(d)           Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.

 

1.03        Accounting Terms.  (a)  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

 

(b)           If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, all reports
and financial statements required hereunder with respect to Borrower or with
respect to Borrower and its consolidated subsidiaries may be prepared in
accordance with such change but, if such change is material, all calculations
and determinations to be made hereunder may be made in accordance with such
change only after notice of such change is given to each Lender and Required
Lenders agree to such change insofar as it affects the accounting of Borrower or
of Borrower and its consolidated subsidiaries.

 

1.04        Rounding.  Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such

 

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ratio is expressed herein and rounding the result up or down to the nearest
number (with a rounding-up if there is no nearest number).

 

1.05        References to Agreements and Laws.  Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

 

1.06        Times of Day.  Unless otherwise specified, all references herein to
times of day shall be references to Central time (daylight or standard, as
applicable).

 

1.07        Letter of Credit Amounts.  Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.

 

ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01        Loans.  Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a “Loan”) to the Borrower
from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C
Obligations, shall not exceed such Lender’s Commitment.  Within the limits of
each Lender’s Commitment, and subject to the other terms and conditions hereof,
the Borrower may borrow under this Section 2.01, prepay under Section 2.04, and
reborrow under this Section 2.01.  Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.

 

2.02        BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.

 

(a)           Each Committed Borrowing, each conversion of Loans from one Type
to the other, and each continuation of Eurodollar Rate Loans shall be made upon
the Borrower’s irrevocable notice to the Administrative Agent, which may be
given by telephone.  Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans
or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on
the requested date of any Borrowing of Base Rate Loans.  Each telephonic notice
by the

 

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Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery
to the Administrative Agent of a written Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower.  Each Borrowing of,
conversion to or continuation of Eurodollar Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. 
Except as provided in Sections 3.02 and 3.03(c), each Borrowing of or conversion
to Base Rate Loans shall be in a principal amount of $250,000 or a whole
multiple of $100,000 in excess thereof.  Each Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Committed
Borrowing, a conversion of Loans from one Type to the other, or a continuation
of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion
or continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type
of Loans to be borrowed or to which existing Loans are to be converted, and (v)
if applicable, the duration of the Interest Period with respect thereto.  If the
Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans.  If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.

 

(b)           Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection.  In the case of a Committed Borrowing, each Lender shall
make the amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent’s Office not later than 1:00 p.m. on
the Business Day specified in the applicable Loan Notice.  Upon satisfaction of
the applicable conditions set forth in Section 4.02 (and, if such Borrowing is
the initial Credit Extension, Section 4.01), the Administrative Agent shall make
all funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Loan Notice with respect to such Borrowing is
given by the Borrower, there are L/C Borrowings outstanding, then the proceeds
of such Borrowing shall be applied, first, to the payment in full of any such
L/C Borrowings, second, to the Borrower as provided above.

 

(c)           Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan.  During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.

 

(d)           The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination

 

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of such interest rate.  The determination of the Eurodollar Rate by the
Administrative Agent shall be conclusive in the absence of manifest error.  At
any time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America’s prime
rate used in determining the Base Rate promptly following the public
announcement of such change.

 

(e)           After giving effect to all Committed Borrowings, all conversions
of Loans from one Type to the other, and all continuations of Loans as the same
Type, there shall not be more than ten Interest Periods in effect with respect
to Loans.

 

2.03        LETTERS OF CREDIT.

 

(a)           The Letter of Credit Commitment.

 

(i)            Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the other Lenders set forth in
this Section 2.03, (1) from time to time on any Business Day during the period
from the Closing Date until the earlier of the (x) Letter of Credit Expiration
Date or (y) the last day of the Availability Period, to issue Letters of Credit
for the account of the Borrower or certain Subsidiaries, and to amend or renew
Letters of Credit previously issued by it, in accordance with subsection (b)
below, and (2) to honor drafts under the Letters of Credit; and (B) the Lenders
severally agree to participate in Letters of Credit issued for the account of
the Borrower; provided that the L/C Issuer shall not be obligated to make any
L/C Credit Extension with respect to any Letter of Credit, and no Lender shall
be obligated to participate in any Letter of Credit if as of the date of such
L/C Credit Extension, (x) the Total Outstandings would exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Loans of any Lender,
plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C
Obligations, would exceed such Lender’s Commitment, or (z) the Outstanding
Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. 
Within the foregoing limits, and subject to the terms and conditions hereof, the
Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.  All Existing Letters of Credit shall be deemed to have
been issued pursuant hereto, and from and after the Closing Date shall be
subject to and governed by the terms and conditions hereof.

 

(ii)           The L/C Issuer shall be under no obligation to issue any Letter
of Credit if:

 

(A)          any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from
issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with

 

24

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respect to such Letter of Credit any restriction, reserve or capital requirement
(for which the L/C Issuer is not otherwise compensated hereunder) not in effect
on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;

 

(B)           subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than 12 months after the date of issuance or
last renewal, unless the Required Lenders have approved such expiry date;

 

(C)           the expiry date of such requested Letter of Credit would occur
after the Letter of Credit Expiration Date, unless all the Lenders have approved
such expiry date;

 

(D)          the issuance of such Letter of Credit would violate one or more
policies of the L/C Issuer; or

 

(E)           such Letter of Credit is in an initial amount less than $100,000,
in the case of a commercial Letter of Credit, or $500,000, in the case of a
standby Letter of Credit, or denominated in a currency other than Dollars.

 

(iii)          The L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.

 

(b)           Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.

 

(i)            Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to
the Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower. 
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the L/C Issuer may agree in a particular instance in
its sole discretion) prior to the proposed issuance date or date of amendment,
as the case may be.  In the case of a request for an initial issuance of a
Letter of Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of

 

25

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amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may require.

 

(ii)           Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, the L/C Issuer will provide
the Administrative Agent with a copy thereof.  Upon receipt by the L/C Issuer of
confirmation from the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue
a Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices.  Immediately upon the issuance of each
Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Lender’s Pro
Rata Share times the amount of such Letter of Credit.

 

(iii)          If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic renewal provisions (each, an
“Auto-Renewal Letter of Credit”); provided that any such Auto-Renewal Letter of
Credit must permit the L/C Issuer to prevent any such renewal at least once in
each twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
(the “Nonrenewal Notice Date”) in each such twelve-month period to be agreed
upon at the time such Letter of Credit is issued.  Unless otherwise directed by
the L/C Issuer, the Borrower shall not be required to make a specific request to
the L/C Issuer for any such renewal.  Once an Auto-Renewal Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the renewal of such Letter of Credit at any
time prior to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that the L/C Issuer shall not permit any such renewal
if (A) the L/C Issuer has determined that it would have no obligation at such
time to issue such Letter of Credit in its renewed form under the terms hereof
(by reason of the provisions of Section 2.04(a)(ii) or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before the day
that is two Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to permit such
renewal or (2) from the Administrative Agent, any Lender or the Borrower that
one or more of the applicable conditions specified in Section 4.02 is not then
satisfied.

 

(iv)          Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and
the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

 

(c)           Drawings and Reimbursements; Funding of Participations.

 

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(i)            Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the
Borrower and the Administrative Agent thereof.  Not later than 11:00 a.m. on the
date of any payment by the L/C Issuer under a Letter of Credit (each such date,
an “Honor Date”), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing.  If the
Borrower fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Pro Rata Share thereof.  In such event, the Borrower shall be deemed to
have requested a Committed Borrowing of Base Rate Loans to be disbursed on the
Honor Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.02 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Loan Notice).  Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

 

(ii)           Each Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to Section 2.03(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the Administrative
Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed
Amount not later than 1:00 p.m. on the Business Day specified in such notice by
the Administrative Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Lender that so makes funds available shall be deemed to have
made a Base Rate Loan to the Borrower in such amount.  The Administrative Agent
shall remit the funds so received to the L/C Issuer.

 

(iii)          With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the conditions
set forth in Section 4.02 cannot be satisfied or for any other reason, the
Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing
in the amount of the Unreimbursed Amount that is not so refinanced, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the Default Rate.  In such event, each Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in satisfaction
of its participation obligation under this Section 2.03.

 

(iv)          Until each Lender funds its Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any
Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such
amount shall be solely for the account of the L/C Issuer.

 

(v)           Each Lender’s obligation to make Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this

 

27

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Section 2.03(c), shall be absolute and unconditional and shall not be affected
by any circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the L/C Issuer, the
Borrower or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Loans pursuant to this Section 2.03(c) is subject to
the conditions set forth in Section 4.02 (other than delivery by the Borrower of
a Loan Notice).  No such making of an L/C Advance shall relieve or otherwise
impair the obligation of the Borrower to reimburse the L/C Issuer for the amount
of any payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.

 

(vi)          If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  A certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (vi)
shall be conclusive absent manifest error.

 

(d)           Repayment of Participations.

 

(i)            At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender’s L/C Advance in
respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the Borrower or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent will distribute
to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.

 

(ii)           If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.06 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Lender shall pay to the Administrative Agent for the account of the L/C
Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect.

 

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(e)           Obligations Absolute.  The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

 

(i)            any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;

 

(ii)           the existence of any claim, counterclaim, set-off, defense or
other right that the Borrower may have at any time against any beneficiary or
any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

 

(iii)          any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit;

 

(iv)          any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

 

(v)           any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower.

 

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer.  The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

 

(f)            Role of L/C Issuer.  Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection

 

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herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit or Letter of Credit Application.  The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to
its use of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower’s pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement.  None of the L/C Issuer, any Agent-Related Person, nor any
of the respective correspondents, participants or assignees of the L/C Issuer,
shall be liable or responsible for any of the matters described in clauses (i)
through (v) of Section 2.03(e); provided, however, that anything in such clauses
to the contrary notwithstanding, the Borrower may have a claim against the L/C
Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by the
L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit.  In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral.  Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be).  For purposes hereof, “Cash Collateralize” means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders).  Derivatives of such term have corresponding meanings.  The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing.  Cash collateral
shall be maintained in blocked, non-interest bearing deposit accounts by
Administrative Agent.

 

(h)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed
by the L/C Issuer and the Borrower when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,

 

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and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the “ICC”)
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.

 

(i)            Letter of Credit Fees.  The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share a Letter of Credit fee for each Letter of Credit equal to the
Applicable Rate for Letters of Credit times the daily maximum amount available
to be drawn under such Letter of Credit (whether or not such maximum amount is
then in effect under such Letter of Credit).  Such letter of credit fees shall
be computed on a quarterly basis in arrears.  Such letter of credit fees shall
be due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand.  If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.

 

(j)            Fronting Fee and Documentary and Processing Charges Payable to
L/C Issuer.  The Borrower shall pay directly to the L/C Issuer for its own
account a fronting fee with respect to each Letter of Credit at a rate equal to
one-eighth of one percent per annum in each case times the actual daily maximum
amount available to be drawn under each Letter of Credit, which such fee shall
be due and payable on the first Business Day of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit and on the Letter of Credit Expiration Date.  In addition,
the Borrower shall pay directly to the L/C Issuer for its own account reasonable
customary issuance, presentation, amendment and other processing fees, and other
standard costs and charges, of the L/C Issuer relating to letters of credit as
from time to time in effect.  Such reasonable customary fees and standard costs
and charges are due and payable on demand and are nonrefundable.

 

(k)           Conflict with Letter of Credit Application.  In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.

 

2.04        PREPAYMENTS.

 

(a)           The Borrower may, upon notice to the Administrative Agent, at any
time or from time to time voluntarily prepay Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a
principal amount of $250,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then
outstanding.  Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid.  The Administrative Agent
will promptly notify each

 

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Lender of its receipt of each such notice, and of the amount of such Lender’s
Pro Rata Share of such prepayment.  If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any prepayment
of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon,
together with any additional amounts required pursuant to Section 3.05.  Each
such prepayment shall be applied to the Loans of the Lenders in accordance with
their respective Pro Rata Shares.

 

(b)           If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless
after the prepayment in full of the Loans the Total Outstandings exceed the
Aggregate Commitments then in effect.

 

2.05        Termination or Reduction of Commitments.  The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 11:00
a.m. five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments, and (iv) if, after giving effect to any reduction of
the Aggregate Commitments, the Letter of Credit Sublimit exceeds the amount of
the Aggregate Commitments, such Sublimit shall be automatically reduced by the
amount of such excess.  The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Aggregate
Commitments.  Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Pro Rata Share.  All facility fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.

 

2.06        Repayment of Loans.  The Borrower shall repay to the Lenders on the
Maturity Date the aggregate principal amount of Loans outstanding on such date.

 

2.07        INTEREST.

 

(a)           Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate for Eurodollar Loans and
(ii) each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate for Base Rate Loans.

 

(b)           If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by

 

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acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.  Furthermore, while any Event
of Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.  Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.

 

(c)           Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein.  Interest hereunder shall be due and payable in accordance
with the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

 

2.08        Fees.  In addition to certain fees described in subsections (i) and
(j) of Section 2.03:

 

(a)           Facility Fee.  The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share, a facility
fee equal to the Applicable Rate for the Facility Fee times the actual daily
amount of the Aggregate Commitments (or, if the Aggregate Commitments have
terminated, on the Outstanding Amount of all Loans and L/C Obligations),
regardless of usage.  The facility fee shall accrue at all times during the
Availability Period (and thereafter so long as any Loans or L/C Obligations
remain outstanding), including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the
Maturity Date (and, if applicable, thereafter on demand).  The facility fee
shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate for the Facility Fee during any quarter, the actual daily amount
shall be computed and multiplied by the Applicable Rate for the Facility Fee
separately for each period during such quarter that such Applicable Rate for the
Facility Fee was in effect.

 

(b)           Other Fees.  The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter.  Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.

 

2.09.       Computation of Interest and Fees.  All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America’s “prime
rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed.  All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year).  Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.13(a),
bear interest for one day.

 

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2.10        EVIDENCE OF DEBT.

 

(a)           The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business.  The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrower and the interest and payments thereon.  Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Obligations.  In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

(b)           In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit.  In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

 

2.11        PAYMENTS GENERALLY.

 

(a)           All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff. 
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein.  The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender’s Lending
Office.  All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.

 

(b)           If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.

 

(c)           Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such

 

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payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto.  If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:

 

(i)            if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately available
funds, together with interest thereon in respect of each day from and including
the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative Agent in
immediately available funds at the Federal Funds Rate from time to time in
effect; and

 

(ii)           if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period from
the date such amount was made available by the Administrative Agent to the
Borrower to the date such amount is recovered by the Administrative Agent (the
“Compensation Period”) at a rate per annum equal to the Federal Funds Rate from
time to time in effect.  If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in the
applicable Borrowing.  If such Lender does not pay such amount forthwith upon
the Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to the applicable
Borrowing.  Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a result of
any default by such Lender hereunder.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (c) shall be conclusive, absent
manifest error.

 

(d)           If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

 

(e)           The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit are several and not joint.  The failure of
any Lender to make any Loan or to fund any such participation on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan or purchase its participation.

 

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(f)            Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

2.12        Sharing of Payments.  If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Loans made by it, or the
participations in L/C Obligations held by it, any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent of such fact,
and (b) purchase from the other Lenders such participations in the Loans made by
them and/or such subparticipations in the participations in L/C Obligations held
by them, as the case may be, as shall be necessary to cause such purchasing
Lender to share the excess payment in respect of such Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon.  The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation. 
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments.  Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.

 

2.13        INCREASE IN COMMITMENTS.

 

(a)           Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may
from time to time, request an increase in the Aggregate Commitments by an amount
(for all such requests) not exceeding $100,000,000; provided that each such
increase shall be in an amount at least equal to $10,000,000.  At the time of
sending such notice, the Borrower (in consultation with the Administrative
Agent) shall specify the time period within which each Lender is requested to
respond (which shall in no event be less than ten Business Days from the date of
delivery of such notice to the Lenders).  Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Pro Rata Share of such requested increase.  Any Lender not
responding within such time period shall be deemed to have declined to increase
its Commitment.  The Administrative Agent

 

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shall notify the Borrower and each Lender of the Lenders’ responses to each
request made hereunder.  To achieve the full amount of a requested increase, the
Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the
Borrower, the Administrative Agent and its counsel.

 

(b)           If the Aggregate Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrower shall determine the effective
date (the “Increase Effective Date”) and the final allocation of such increase. 
The Administrative Agent shall promptly notify the Borrower and the Lenders of
the final allocation of such increase and the Increase Effective Date.  As a
condition precedent to such increase, the Borrower shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the Increase
Effective Date (in sufficient copies for each Lender) signed by a Responsible
Officer of such Loan Party (i) certifying and attaching the resolutions adopted
by such Loan Party approving or consenting to such increase, and (ii) in the
case of the Borrower, certifying that, before and after giving effect to such
increase, (A) the representations and warranties contained in Article V and the
other Loan Documents are true and correct on and as of the Extension Effective
Date, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that for purposes of this Section 2.13, the
representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant
to subsections (a) and (b), respectively, of Section 6.01, and (B) no Default
exists.  The Borrower shall prepay any Loans outstanding on the Increase
Effective Date (and pay any additional amounts required pursuant to Section
3.05) to the extent necessary to keep the outstanding Loans ratable with any
revised Pro Rata Shares arising from any nonratable increase in the Commitments
under this Section.

 

(c)           This Section shall supersede any provisions in Section 10.01 to
the contrary.

 

ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        TAXES.

 

(a)           Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as “Taxes”).  If the Borrower
shall be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums

 

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payable under this Section), each of the Administrative Agent and such Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Borrower shall furnish to the Administrative
Agent (which shall forward the same to such Lender) the original or a certified
copy of a receipt evidencing payment thereof.

 

(b)           In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).

 

(c)           If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.

 

(d)           The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability (including additions to
tax, penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  Payment
under this subsection (d) shall be made within 30 days after the date the Lender
or the Administrative Agent makes a demand therefor.

 

3.02        Illegality.  If any Law has made it unlawful, or any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable
Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine
or charge interest rates based upon the Eurodollar Rate, then, on notice thereof
by such Lender to the Borrower through the Administrative Agent, any obligation
of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist.  Upon receipt of such notice, the Borrower shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans.  Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted.  Each
Lender agrees to designate a different Lending Office if

 

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such designation will avoid the need for such notice and will not, in the good
faith judgment of such Lender, otherwise be materially disadvantageous to such
Lender.

 

3.03        Inability to Determine Rates.  If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender.  Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice.  Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Committed Borrowing of Base Rate Loans in the
amount specified therein.

 

3.04        INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.

 

(a)           If any Lender determines that as a result of the introduction of
or any change in or in the interpretation of any Law, or such Lender’s
compliance therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as
the case may be) issuing or participating in Letters of Credit, or a reduction
in the amount received or receivable by such Lender in connection with any of
the foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which Section 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements contemplated by Section 3.04(c), then from time to time upon demand
of such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.

 

(b)           If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender’s
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender’s desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.

 

(c)           The Borrower shall pay to each Lender, as long as such Lender
shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
“Eurocurrency liabilities”), additional interest on the unpaid principal amount
of each Eurodollar Rate Loan equal to the actual costs of such reserves

 

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allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, provided the Borrower
shall have received at least 15 days’ prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender.  If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice.

 

3.05        Funding Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

 

(a)           any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or

 

(b)           any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or

 

(c)           any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.16; including any loss of anticipated profits
and any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained.  The Borrower shall also pay any
reasonable customary administrative fees charged by such Lender in connection
with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.

 

3.06        MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.

 

(a)           A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error.  In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.

 

(b)           Upon any Lender’s making a claim for compensation under Section
3.01 or 3.04, the Borrower may replace such Lender in accordance with Section
10.16.

 

3.07        Survival.  All of the Borrower’s obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

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For purposes of this Article III only, the term “Laws” shall include any and all
guidelines of any Governmental Authority and the interpretation or
administration of the Laws by any Governmental Authority charged with the
enforcement, interpretation or administration thereof.

 

ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01        Conditions of Initial Credit Extension.  The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:

 

(a)           The Administrative Agent’s receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and its legal
counsel:

 

(i)            executed counterparts of this Agreement, the Guaranty, and the
Stock Pledge and the Intercreditor Agreement sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;

 

(ii)           a Note executed by the Borrower in favor of each Lender
requesting a Note;

 

(iii)          such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;

 

(iv)          such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each of the Borrower and the Guarantors is validly existing, in good
standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;

 

(v)           a favorable opinion of John Walter, general counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit F;

 

(vi)          a favorable opinion of Thompson & Knight L.L.P., counsel to
Administrative Agent, addressed to the Administrative Agent and each Lender, as
to the enforceability of the Credit Agreement, the Notes and the Guaranty under
Texas law;

 

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(vii)         a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

 

(viii)        a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b) have
been satisfied, and (B) that there has been no event or circumstance since the
date of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect; and (C) the calculation of the Debt to Capitalization Ratio as of
December 31, 2002;

 

(ix)                           evidence that all insurance required to be
maintained pursuant to the Loan Documents has been obtained and is in effect;

 

(x)                            a budget of Borrower and its Consolidated
Subsidiaries for the fiscal year 2003, prepared by the Financing Planning
Department of the Borrower and approved by the Board of Directors of the
Borrower;

 

(xi)                           projections of Borrower and its Consolidated
Subsidiaries for the fiscal years 2003 through 2006, prepared by the Financing
Planning Department of Borrower and reviewed by the Chief Financial Officer of
Borrower;

 

(ix)           such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer or the Required Lenders
reasonably may require.

 

(b)           Any fees required to be paid on or before the Closing Date shall
have been paid.

 

(c)           The Indebtedness under the Existing Credit agreement shall be
refinanced with proceeds of the initial Credit Extension.

 

(d)           Unless waived by the Administrative Agent, the Borrower shall have
paid all Attorney Costs of the Administrative Agent to the extent invoiced prior
to or on the Closing Date, plus such additional amounts of Attorney Costs as
shall constitute its reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).

 

4.02        Conditions to all Credit Extensions.  The obligation of each Lender
to honor any Request for Credit Extension (other than a Loan Notice requesting
only a conversion of Loans to the other Type, or a continuation of Eurodollar
Rate Loans) is subject to the following conditions precedent:

 

(a)           The representations and warranties of the Borrower and each other
Loan Party contained in Article V or any other Loan Document, or which are
contained in any document

 

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furnished at any time under or in connection herewith or therewith, shall be
true and correct on and as of the date of such Credit Extension, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.01.

 

(b)           No Default shall exist, or would result from such proposed Credit
Extension.

 

(c)           The Administrative Agent and, if applicable, the L/C Issuer shall
have received a Request for Credit Extension in accordance with the requirements
hereof.

 

Each Request for Credit Extension (other than a Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE V.
REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders
that:

 

5.01        Existence, Qualification and Power; Compliance with Laws.  Each Loan
Party (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to (i) own its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents to which it is a
party, (c) is duly qualified and is licensed and in good standing under the Laws
of each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws; except in each case referred to in clause (b)(i),
(c) or (d), to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.

 

5.02.       Authorization; No Contravention.  The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, in any material respect, or the creation of any Lien
under, (i) any Contractual Obligation to which such Person is a party or
(ii) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject; or (c) violate
any Law; except, with respect to clause (b) or (c), as could not reasonably be
expected to have a Material Adverse Effect.

 

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5.03.       Governmental Authorization; Other Consents.  No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person (other than the consent of Wyoming
Public Service Commission regarding the Guaranty of MGTC) is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document.

 

5.04.       Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto.  This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms; except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at Law).

 

5.05        FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.

 

(a)           The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other material
liabilities, direct or contingent, of the Borrower and its Subsidiaries as of
the date thereof, including material liabilities for taxes, material commitments
and material Indebtedness.

 

(b)           The audited consolidated financial statements of the Borrower and
its Subsidiaries as of and for the year ended December 31, 2002, including
consolidated statements of income or operations, shareholders’ equity and cash
flows for the fiscal year ended on that date (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby.  Schedule 5.05 (as
hereafter supplemented from time to time in writing) sets forth all material
indebtedness and other material liabilities, direct or contingent, of the
Borrower and its consolidated Subsidiaries as of the date of such financial
statements (but not disclosed therein), including material liabilities for
taxes, material commitments and material Indebtedness.

 

(c)           Since the date of the Audited Financial Statements, there has been
no event or circumstance, either individually or in the aggregate, that has had
or could reasonably be expected to have a Material Adverse Effect.

 

5.06        Litigation.  Except as disclosed in the Borrower’s most recent
Annual Report filed on Form 10-K with the SEC or the Borrower’s most recent
Quarterly Report filed on Form 10-Q with the SEC, there are no actions, suits,
proceedings, claims or disputes pending or, to the

 

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knowledge of the Responsible Officers after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of its Subsidiaries or
against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the transactions
contemplated hereby, or (b) either individually or in the aggregate, if
determined adversely, could reasonably be expected to have a Material Adverse
Effect.

 

5.07        No Default.  Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

 

5.08        Ownership of Property; Liens.  Each of Borrower and each Subsidiary
has good and defensible title to all of its material properties and assets, free
and clear of any Liens other than Permitted Liens and of all impediments to the
use of such properties and assets in such Person’s business, except that
(i) with regard to easements and rights-of-way relating to any such Person’s
gathering systems, to the best of such Person’s knowledge, there exist no Liens
that a reasonable and prudent operator in the gas processing business would
consider to be a material impairment of title and such Person has such title as
is reasonably necessary to permit the use and enjoyment of such gathering
systems, and (ii) no representation or warranty is made with respect to any oil,
gas or mineral property or interest to which no proved oil or gas reserves are
properly attributed.

 

5.09        Environmental Compliance.  The Borrower and its Subsidiaries conduct
in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that, except as disclosed in the Borrower’s most recent Annual Report filed on
Form 10-K with the SEC or the Borrower’s most recent Quarterly Report filed on
Form 10-Q with the SEC, there are no such Environmental Laws and claims could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

5.10.       Insurance.  The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

 

5.11        Taxes.  The Borrower and its Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP.  To the best of Responsible
Officers’

 

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knowledge, there is no proposed tax assessment against the Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect.

 

5.12        ERISA COMPLIANCE.

 

(a)           Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Laws.  The Borrower and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.

 

(b)           There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect.  Except as specifically disclosed on Schedule 5.12, there has
been no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan that has resulted or could reasonably be expected
to result in a Material Adverse Effect.

 

(c)           (i)  No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA.

 

5.13        Subsidiaries.  As of the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13 and has no material equity investments in any other corporation or entity
other than those specifically disclosed in Part (b) of Schedule 5.13.

 

5.14        MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.

 

(a)           The Borrower is not engaged and will not engage, principally or as
one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.

 

(b)           None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a “holding company,” or a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935
or subject to regulation thereunder, or (ii) is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.

 

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5.15        Disclosure.  The Borrower has disclosed to the Administrative Agent
and the Lenders all agreements, instruments and corporate or other restrictions
to which it or any of its Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.  For purposes of this Section 5.15,
information that is disclosed in reports on Forms 10-K, 10-Q and 8-K or in
definitive proxy materials filed by the Borrower with the SEC shall be deemed to
have been disclosed to the Administrative Agent and the Lenders.  No report,
financial statement, certificate or other information furnished (whether in
writing or orally) by or on behalf of any Loan Party to the Administrative Agent
or any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

 

5.16        Compliance with Laws.  Each of the Borrower and each Subsidiary is
in compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

 

5.17        Tax Shelter Regulations.  The Borrower does not intend to treat the
Loans and/or Letters of Credit and related transactions as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4).  In
the event the Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof.  If the
Borrower so notifies the Administrative Agent, the Borrower acknowledges that
one or more of the Lenders may treat its Loans and/or its Letters of Credit as
part of a transaction that is subject to Treasury Regulation Section 301.6112-1,
and such Lender or Lenders, as applicable, will maintain the lists and other
records required by such Treasury Regulation.

 

ARTICLE VI.
AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each
Subsidiary to:

 

6.01        Financial Statements.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)           as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the

 

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end of such fiscal year, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any “going
concern” or like qualification or exception or any qualification or exception as
to the scope of such audit;

 

(b)           as soon as available, but in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal
quarter and for the portion of the Borrower’s fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting, in all material respects, the
financial condition, results of operations, shareholders’ equity and cash flows
of the Borrower and its Subsidiaries and prepared in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes;
and

 

(c)           By April 29 of each year, a projection of the cash flows of
Borrower and its Subsidiaries for such year, in form and scope acceptable to
Administrative Agent.

 

As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.

 

6.02        Certificates; Other Information.  Deliver to the Administrative
Agent and each Lender, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Lenders:

 

(a)           concurrently with the delivery of the financial statements
referred to in Section 6.01(a) (or if such financial statements are delivered
electronically, within two (2) Business Days of such electronic delivery), a
certificate of its independent certified public accountants certifying such
financial statements and stating that in making the examination necessary
therefor no knowledge was obtained of any Default or, if any such Default shall
exist, stating the nature and status of such event;

 

(b)           concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b) (or if such financial statements are
delivered electronically, within two (2) Business Days of such electronic
delivery), a duly completed Compliance Certificate signed by a Responsible
Officer of the Borrower;

 

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(c)           promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Borrower by independent certified public
accountants in connection with the accounts or books of the Borrower or any
Subsidiary, or any audit of any of them;

 

(d)           promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower, and copies of all annual, regular, periodic
and special reports and registration statements which the Borrower may file or
be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;

 

(e)           promptly after the borrower has notified Administrative Agent of
any intention by the Borrower to treat the Loans and/or Letters of Credit and
related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or
any successor form;

 

(f)            promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary, or compliance
with the terms of the Loan Documents, as the Administrative Agent or any Lender
may from time to time reasonably request;

 

(g)           By January 30th of each year after the occurrence of a Debt Rating
Downgrade, an Engineering Report prepared as of the preceding December 31st by
independent petroleum engineers chosen by Borrower and acceptable to Required
Lenders, concerning the oil and gas reserves of Borrower and its Subsidiaries. 
The form of this report shall be satisfactory to Administrative Agent, shall
contain sufficient information to enable Borrower to meet the reporting
requirements concerning oil and gas reserves contained in Regulations S-K and
S-X promulgated by the Securities and Exchange Commission.  This report shall
distinguish (or shall be delivered together with a certificate from an
appropriate officer of Borrower which distinguishes) those properties treated in
the report which are Collateral from those properties treated in the report
which are not Collateral;

 

(h)           By August 31 of each year after the occurrence of a Debt Rating
Downgrade, an Engineering Report prepared as of the preceding July 1 by
petroleum engineers who are employees of Borrower (or by the independent
engineers named above), together with an accompanying report on property sales,
property purchases and changes in categories, both in the same form and scope as
the reports in (g) above;

 

(i)            Concurrently with the reports referred to in Sections 6.02(g) and
(h), a report describing material gas imbalances and curtailments of production
for the Collateral; and

 

(j)            As soon as delivered to holders of the Debt Securities, copies of
all reports, statements and notices delivered generally to holders of Debt
Securities (excluding data which

 

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Borrower deems duplicative, immaterial or inapplicable for delivery to
Administrative Agent and Lenders).

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section
6.02(d) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts
such documents, or provides a link thereto on the Borrower’s website on the
Internet at the website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or
another relevant website, if any, including, but not limited to any filings made
on EDGAR to which each Lender and the Administrative Agent have access (whether
a commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender that requests the Borrower
to deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify (which may be by facsimile or electronic mail) the Administrative
Agent and each Lender of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents.  Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent and each of
the Lenders.  Except for such Compliance Certificates, the Administrative Agent
shall have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

 

6.03        Notices.  Promptly notify the Administrative Agent and each Lender:

 

(a)           of the occurrence of any Default;

 

(b)           of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding to which the Borrower or any Subsidiary is a party or
of which any of their respective property is the subject, including pursuant to
any applicable Environmental Laws;

 

(c)           of the occurrence of any ERISA Event;

 

(d)           of any material change in accounting policies or financial
reporting practices by the Borrower or any Subsidiary; and

 

(e)           of any announcement by Moody’s or S&P of any downward change or
possible downward change in a Debt Rating of which Responsible Officer has
knowledge.

 

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Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto.  Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

 

6.04        Payment of Obligations.  Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.

 

6.05        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

 

6.06        Maintenance of Properties.  (a) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
and (b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities.

 

6.07        Maintenance of Insurance.  Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.  Borrower and its Subsidiaries shall
maintain business interruption insurance in an amount providing not less than
$10,000,000 coverage for the covered persons, taken as a whole.

 

6.08.       Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.

 

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6.09        Books and Records.  Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be.

 

6.10        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent on behalf of Lenders to visit and
inspect any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.

 

6.11        Use of Proceeds.  Use the proceeds of the Credit Extensions for
general corporate purposes not in contravention of any Law or of any Loan
Document, including repayment of Indebtedness under the Existing Credit
Agreement.

 

6.12        Guaranties of Borrower’s Subsidiaries.  Subject to Section 6.13 (b),
cause each of the following Domestic Subsidiaries to, and each such Person who
becomes a Domestic Subsidiary after the date hereof (to the extent such Domestic
Subsidiary meets the criteria set forth in this Section 6.12) to, within thirty
(30) days after becoming a Domestic Subsidiary, execute and deliver to
Administrative Agent an absolute and unconditional guaranty of the timely
repayment of the Obligations of Borrower and the due and punctual performance of
the Obligations of Borrower, which guaranty shall be substantially in the form
of Exhibit E:

 

(a)                           Each Domestic Subsidiary of Borrower which has
EBITDA in any fiscal quarter of Borrower which constitutes ten percent (10%) or
more of Borrower’s Consolidated EBITDA for such fiscal quarter or which has
assets at any time with a book value equal to or exceeding (10%) of the book
value of Borrower’s consolidated assets at such time;

 

(b)                           If the aggregate amount of Borrower’s
unconsolidated EBITDA for any fiscal quarter of Borrower plus the aggregate
EBITDA of the Guarantors during such fiscal quarter does not constitute eighty-
five percent (85%) or more of Borrower’s Consolidated EBITDA for such fiscal
quarter or if the book value of Borrower’s individual assets at any time plus
the aggregate book value of the assets of Guarantors at such time does not
exceed eight-five percent (85%) of the book value of the Borrower’s consolidated
assets at such time, then Domestic Subsidiaries of Borrower with aggregate
assets and/or EBITDA sufficient to comply with the eighty-five percent (85%)
tests contained in this subsection;

 

(c)                           Each Domestic Subsidiary which Guarantees the Debt
Securities or the Subordinated Debt; and

 

(d)                           Upon request by the Administrative Agent on behalf
of the Required Lenders, any other Domestic Subsidiary of Borrower.

 

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6.13        ADDITIONAL GUARANTORS AND STOCK PLEDGE.

 

(a)                   Notify the Administrative Agent at the time that any
Person becomes a Domestic Subsidiary that is required to execute and deliver a
Guaranty pursuant to Section 6.12, and (i) subject to Section 6.13(b), promptly
thereafter (and in any event within 30 days), cause such Person to  become a
Guarantor by executing and delivering to the Administrative Agent a counterpart
of the Guaranty or such other document as the Administrative Agent shall deem
appropriate for such purpose and (ii) subject to Section 6.13(c), promptly
thereafter (and in any event within 30 days) pledge to the Administrative Agent
the equity interests in such Material Domestic Subsidiary by documents as the
Administrative Agent shall deem appropriate for such purpose and (iii) deliver
to the Administrative Agent documents of the types referred to in clauses (iii)
and (iv) of Section 4.01(a) and favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to in clauses (i) and (ii)
above), all in form, content and scope reasonably satisfactory to the
Administrative Agent.

 

(b)                   No PUC Subsidiary shall be required to provide a Guaranty
pursuant to Section 6.12 or Section 6.13(a) unless regulatory approval shall
have been obtained for such Guaranty from the applicable public utility
commission or FERC having such regulatory authority over such PUC Subsidiary (in
this Section called the applicable “PUC”).  Borrower shall cause each PUC
Subsidiary required to deliver a Guaranty pursuant to Sections 6.12 and 6.13(a)
to use its best efforts to obtain the approval of the applicable PUC for a
Guaranty of the Obligations. In the event that the applicable PUC shall require
a Subsidiary to withdraw from the Guaranty, such Subsidiary may so withdraw and
the Administrative Agent shall release such Subsidiary from the Guaranty;
provided that a substitute Subsidiary guarantor meeting the requirements of
Sections 6.12 and 6.13 shall have executed and delivered the Guaranty unless all
such substitute Subsidiaries are PUC Subsidiaries and are prohibited by the
applicable PUC from delivering a Guaranty.

 

(c)                   No PUC Subsidiary shall be required to execute and deliver
any Security Document pursuant to Sections 6.13(a) or 6.14 unless regulatory
approval shall have been obtained for such Security Document from the applicable
PUC.  Borrower shall cause each PUC Subsidiary required to deliver a Security
Document pursuant to Sections 6.13(a) and/or Section 6.14 to use its best
efforts to obtain the approval of the applicable PUC for such Security Document,
granting to Administrative Agent, for the benefit of the Lenders, Liens and
security interests in such Collateral as required by Section 6.13(a) and/or
Section 6.14 (as applicable) to secure the Obligations. In the event that the
applicable PUC shall require that the equity interests of a PUC Subsidiary be
released from the Lien in favor of the Administrative Agent, the Administrative
Agent shall so release such equity interests; provided that replacement stock of
another Subsidiary acceptable to the Administrative Agent shall have been
pledged to Administrative Agent for the benefit of the Lenders unless all such
substitute Subsidiaries are PUC Subsidiaries and are prohibited by the
applicable PUC from having their equity interests pledged to Administrative
Agent.

 

(d)                   Neither this Section 6.13, Section 6.14 nor any other
provision of any Loan Document shall require a Guaranty or a Security Document
by a PUC Subsidiary, in either case,

 

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to the extent that such PUC Subsidiary shall not have obtained the required
approval of the applicable PUC after the exercise of its best efforts in
accordance with subsections (b) and (c) of this Section 6.13.

 

6.14        Agreement to Deliver Mortgages.  (a)  At all times after a Debt
Rating Downgrade, the  Obligations shall be secured by first and prior Liens
(subject only to Permitted Liens) covering and encumbering 75% of the total
present value (utilizing Administrative Agent’s usual and customary pricing and
discount rates for oil and gas loans, as in effect from time to time) of all oil
and gas properties covered by the reserve reports most recently delivered to the
Administrative Agent (the “Oil and Gas Collateral”).  Subject to Section
6.13(c), the Borrower shall and shall cause each Subsidiary, to the extent
Borrower and each such Subsidiary owns such Oil and Gas Collateral, to deliver
to secure the Obligations and the Debt Securities, deeds of trust, mortgages,
chattel mortgages, security agreements and other Security Documents which shall
be in substantially the form of Exhibit G for the purpose of granting,
confirming, and perfecting first and prior Liens in the Oil and Gas Collateral. 
Such Security Documents shall be delivered to the Administrative Agent within
ninety (90) days after the date hereof, but Administrative Agent shall not
record such Security Documents until a Debt Rating Downgrade occurs.

 

(b)           To the extent necessary to comply with the first sentence of
Section 6.14(a), within sixty (60) days after the delivery of each Engineering
Report pursuant to Sections 6.02(g) and 6.02(h), the Borrower shall and shall
cause each Subsidiary who owns Oil and Gas Collateral to execute and deliver to
Administrative Agent, for the ratable benefit of each Lender and the holders of
the Debt Securities, supplements to the Security Documents delivered pursuant to
Section 6.14(a) or new Security Documents substantially in the form of Exhibit G
and duly executed by the Borrower and any such Subsidiary (as applicable)
together with such other assignments, conveyances, amendments, agreements and
other writings (each duly authorized and executed) as Administrative Agent shall
deem reasonably necessary to grant, evidence and perfect the Liens required by
this Section 6.14.

 

6.15        Title Review.  After a Debt Rating Downgrade occurs, and after
additional Oil and Gas Collateral is delivered pursuant to Section 6.14(b), the
Borrower agrees that the Administrative Agent’s counsel shall be entitled to
review the lease files for the Oil and Gas Collateral and existing title reports
and title opinions covering such Oil and Gas Collateral.  Based upon such review
and in order to confirm title of the Borrower and its Subsidiaries to such Oil
and Gas Collateral, the Administrative Agent may request, and the Borrower
agrees to deliver, within ninety (90) days after any Debt Rating Downgrade, such
additional favorable reports and/or title opinions which Required Lenders
determine in their reasonable judgment are necessary from Persons acceptable to
the Administrative Agent with respect to any Oil and Gas Collateral  as
designated by Administrative Agent to confirm that the Borrower and/or its
Subsidiaries own such Oil and Gas Collateral free and clear of all Liens except
Permitted Liens.

 

6.16        Perfection and Protection of Security Interests and Liens.  Borrower
will from time to time deliver, and will cause each of its Subsidiaries from
time to time to deliver, to Administrative Agent any authorizations to file
financing statements, extension agreements and other documents, properly
completed and executed (and acknowledged when required) in form

 

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and substance reasonably satisfactory to Administrative Agent, which
Administrative Agent requests for the purpose of perfecting, confirming, or
protecting any Liens or other rights in Collateral securing any Obligations.

 

6.17        Production Proceeds. Notwithstanding that, by the terms of the
Security Documents which may be delivered to Administrative Agent pursuant to
Section 6.14, one or more Subsidiaries of the Borrower will, after a Debt Rating
Downgrade, be assigning Administrative Agent and Lenders all of the “Production
Proceeds” (as defined in Exhibit G therein) accruing to the property covered
thereby, so long as no Default has occurred such Subsidiaries may continue to
receive from the purchasers of production all such Production Proceeds, subject,
however, to the Liens created under the Security Documents, which Liens are
hereby affirmed and ratified.  Upon the occurrence of a Default, Administrative
Agent and Lenders may exercise all rights and remedies granted under the
Security Documents, including the right to obtain possession of all Production
Proceeds then held by the Subsidiaries or to receive directly from the
purchasers of production all other Production Proceeds.  In no case shall any
failure, whether purposed or inadvertent, by Administrative Agent or Lenders to
collect directly any such Production Proceeds constitute in any way a waiver,
remission or release of any of its rights under the Security Documents, nor
shall any release of any Production Proceeds by Administrative Agent or Lenders
to the Subsidiaries constitute a waiver, remission, or release of any other
Production Proceeds or of any rights of Administrative Agent or Lenders to
collect other Production Proceeds thereafter.

 

6.18        Sale or Disposal of Property. Notwithstanding that Dispositions of
the Collateral may be prohibited by the terms of the Security Documents which
may be delivered to Administrative Agent pursuant to Section 6.14 by one or more
Subsidiaries of the Borrower, so long as no Default has occurred, such
Subsidiaries may make Dispositions of Collateral owned by such Subsidiary so
long as such Dispositions are otherwise permitted pursuant to the terms of
Section 7.05.

 

6.19        Limitation on Effectiveness. Notwithstanding anything to the
contrary contained herein or in the Mortgage, none of the terms, conditions and
obligations contained in the Mortgage will be effective or enforceable in any
manner whatsoever at any time prior to the occurrence of a Debt Rating
Downgrade.  Further, at no time prior to the occurrence of such a Debt Rating
Downgrade, shall Administrative Agent, in its capacity as such or in its
capacity as “Collateral Agent” thereunder, or any Lender be entitled to any of
the rights or remedies contained therein or be entitled to pursue any remedies
which would otherwise be available to such Person under the terms of the
Mortgage or at law, in equity or otherwise in connection with the Mortgage.  It
is not the intent of the Borrower, Administrative Agent or Lenders that the
provisions of this Section 6.19 violate any applicable law regarding the rule
against perpetuities, the suspension of the absolute power of alienation, or
other rules regarding the vesting or duration of estates.  The provisions of
this Section 6.19 shall be construed as not violating any such rule to the
extent the same can be so construed consistent with the intent of the parties. 
In the event that the provisions of this Section 6.19 are determined to violate
any such rule, then this Section 6.19 shall nevertheless be effective only for
the maximum period (but not longer than the maximum period) permitted by such
rule that will result in no violation.  At such time as this Section 6.19 is no
longer effective, neither will the Mortgage be effective or enforceable. To

 

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THE EXTENT THE MAXIMUM PERIOD IS PERMITTED TO BE DETERMINED BY REFERENCE TO
“LIVES IN BEING,” THE BORROWER, ADMINISTRATIVE AGENT AND LENDERS HEREBY  AGREE
THAT “LIVES IN BEING” SHALL REFER TO THE LIFETIME OF THE LAST TO DIE OF THE
LIVING LINEAL DESCENDANTS OF THE LATE JOSEPH P. KENNEDY (FATHER OF THE LATE
PRESIDENT OF THE UNITED STATES OF AMERICA).

 

ARTICLE VII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:

 

7.01        Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following (each a “Permitted Lien” and collectively, the “Permitted
Liens”):

 

(a)           Liens pursuant to any Loan Document;

 

(b)           Liens existing on the date hereof and listed on Schedule 7.01 and
any renewals or extensions thereof, provided that the property covered thereby
is not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.03(b);

 

(c)           Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

 

(d)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;

 

(e)           pledges or deposits in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;

 

(f)            deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;

 

(g)           easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case

 

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materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the applicable Person;

 

(h)           Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.01(h) or securing appeal or other surety
bonds related to such judgments;

 

(i)            Liens securing capital leases permitted under Section 7.03(e);
provided that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (ii) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition; and

 

(j)            If the Company and/or any Subsidiary has delivered Mortgages to
Administrative Agent pursuant to Section 6.14, Liens in favor of Prudential
Insurance Company of America.

 

(k)           Liens on margin accounts established in connection with Swap
Contracts permitted under Section 7.11.

 

7.02        Investments. Make any Investments, except:

 

(a)           Investments held by the Borrower or such Subsidiary in the form of
cash equivalents;

 

(b)           Investments in Subsidiaries already wholly owned by Borrower
and/or its Subsidiaries and the joint ventures described on Schedule 7.02;

 

(c)           Investments maturing within one year from the date of acquisition
in direct obligations of or obligations supported by, the full faith and credit
of, the United States of America;

 

(d)           purchases of open market commercial paper, maturing within 270
days after acquisition thereof, with the highest or second highest credit rating
given by either S & P or Moody’s and investments in money market mutual funds
with equivalent ratings;

 

(e)           acquisitions of or investments in gas processing, treating,
fractionation, transmission, gathering and storage facilities, and domestic oil
and gas properties (whether in the United States or Canada);

 

(f)            loans made by Borrower to its employees pursuant to the Stock
Option Agreements; provided that the aggregate outstanding amount of all such
loans so made shall not exceed $10,000,000;

 

(g)           loans to finance the purchase by Borrower’s employees of certain
real property, provided that the aggregate outstanding amount of such loans
shall not exceed $500,000;

 

(h)           Investments of the Borrower in any Guarantor and Investments of
any Guarantor in the Borrower or in another Guarantor;

 

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(i)            Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;

 

(j)            Guarantees permitted by Section 7.03;

 

(k)           Investments of the Borrower or any Subsidiary made pursuant to any
Swap Contract permitted under Section 7.11; and

 

(l)            other Investments not exceeding $5,000,000 in the aggregate in
any fiscal year of the Borrower.

 

7.03        Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except (without duplication):

 

(a)           Indebtedness under the Loan Documents;

 

(b)           Indebtedness outstanding on the date hereof and listed on Schedule
7.03 and any refinancings, refundings, renewals or extensions thereof; provided
that the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;

 

(c)           Guarantees of the Borrower or any Guarantor in respect of
Indebtedness otherwise permitted hereunder of the Borrower;

 

(d)           Indebtedness (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract permitted under Section
[7.11]; provided that such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;

 

(e)           Indebtedness under leases, whether capital leases or operating
leases, entered into in the ordinary course of business in arm’s-length
transactions at competitive market rates under competitive terms and conditions
considering all aspects thereof, provided that the obligations payable over the
remaining lives of any such leases (excluding obligations under oil and gas
leases, real estate leases for office space used by Borrower, leases for
vehicles, office equipment and data processing equipment and gas compressor and
gas processing plant site leases) do not in the aggregate exceed $75,000,000;

 

(f)            unsecured Indebtedness between Borrower and any Guarantor;

 

(g)           Indebtedness under the Debt Securities;

 

(h)           the Subordinated Debt issued in June 1999 under the Indenture;

 

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(i)            Subordinated Debt other than that described in clause (h) above;

 

(j)            unsecured Indebtedness of the Borrower not described in
subsections (a) through (i) above which meets the following requirements: (A)
the documentation evidencing such Indebtedness shall contain no terms,
conditions or defaults (other than pricing) which are more favorable to the
third party creditor than those contained in this Agreement are to Lenders, as
determined by Required Lenders in their discretion (provided that Required
Lenders shall make any such determination considering any amendments or
modifications to this Agreement existing at the time of the incurrence of such
Indebtedness) and shall not contain any provision which attempts to modify,
amend or restrict any of the rights or remedies of Agent or Lenders hereunder or
under any of the other Loan Documents, (B) such Indebtedness shall have no
scheduled principal payments due prior to the final maturity of the Obligations,
(C) at the time the Borrower incurs such Indebtedness, no Default or Event of
Default shall have occurred and be continuing hereunder and (D) if such
Indebtedness is to be guaranteed by any Affiliate of the Borrower, then such
third party lender(s) must enter into an inter-creditor agreement with Lenders,
in form, scope and substance which is acceptable to Required Lenders, as
evidenced by their written consent;

 

(k)           CP Debt; and

 

(l)            miscellaneous items of unsecured Indebtedness not described in
subsections (a) through (k) of this Section 7.03 which do not in the aggregate
(taking into account all Indebtedness of Borrower and its Subsidiaries) exceed
$10,000,000 at any one time outstanding.

 

7.04        Fundamental Changes; Issuance of Stock. Merge, dissolve, liquidate,
consolidate with or into another Person, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:

 

(a)           the Borrower may merge with another Person; provided that the
Borrower is the surviving Person and immediately after such merger or
consolidation, no Default would exist;

 

(b)           any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
other Subsidiaries, provided that when any Guarantor is merging with another
Subsidiary, the Guarantor shall be the continuing or surviving Person; and

 

(c)           any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or a Guarantor.

 

Neither the Borrower nor any Subsidiary will issue partnership interests, stock,
or other securities of Borrower or of any of Borrower’s Subsidiaries (other than
shares of its common stock or warrants to purchase its common stock or warrants
or options to acquire such common

 

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stock), nor will any Subsidiary of the Borrower allow any diminution of the
Borrower’s interest (direct or indirect) therein.

 

7.05        Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:

 

(a)           Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business or property otherwise
not being used in the operations of the Borrower or any Subsidiary;

 

(b)           Dispositions of inventory in the ordinary course of business;

 

(c)           Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

 

(d)           Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be the Borrower or a Guarantor;

 

(e)           Dispositions permitted by Section 7.04;

 

(f)            Dispositions of property by the Borrower and its Subsidiaries in
arms’ length transactions to third parties that are not Affiliates of the
Borrower for consideration (i) solely in property similar to the property being
disposed of and (ii) with a fair market value that is equivalent to the fair
market value of the property being disposed of; and

 

(g)           Dispositions by the Borrower and its Subsidiaries in arms’ length
transactions to third parties that are not Affiliates of the Borrower and which
are not otherwise covered by this Section 7.05 for consideration equal to the
fair market value thereof; provided that (i) at the time of such Disposition, no
Default shall exist or would result from such Disposition and (ii) the aggregate
book value of all property Disposed of in reliance on this clause (f) in any
fiscal year shall not exceed $35,000,000.

 

7.06        Restricted Payments.   Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:

 

(a)           the Borrower may declare and make dividend payments to its
shareholders so long as no Default or Event of Default exists at the time such
dividend is declared or paid or would occur as a result thereof;

 

(b)           each Subsidiary may make Restricted Payments to the Borrower and
any Guarantor;

 

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(c)           the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common equity interests of such Person;

 

(d)           so long as no Default or Event of Default has occurred and is
continuing, or will occur as a result thereof, Borrower and each Subsidiary may
make contributions, purchases, redemptions, acquisitions and retirements with
respect to any shares of its capital stock;

 

(e)           the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or other common equity interests or warrants
or options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
equity interests;

 

(f)            the Borrower may make Restricted Payments with respect to the
Debt Securities so long as no Default or Event of Default exists at the time
thereof or will occur as a result thereof.

 

7.07        Change in Nature of Business.   Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.

 

7.08        TRANSACTIONS WITH AFFILIATES. ENTER INTO ANY TRANSACTION OF ANY KIND
WITH ANY AFFILIATE OF THE BORROWER, WHETHER OR NOT IN THE ORDINARY COURSE OF
BUSINESS, OTHER THAN ON FAIR AND REASONABLE TERMS SUBSTANTIALLY AS FAVORABLE TO
THE BORROWER OR SUCH SUBSIDIARY AS WOULD BE OBTAINABLE BY THE BORROWER OR SUCH
SUBSIDIARY AT THE TIME IN A COMPARABLE ARM’S LENGTH TRANSACTION WITH A PERSON
OTHER THAN AN AFFILIATE, PROVIDED THAT THE FOREGOING RESTRICTION SHALL NOT APPLY
TO TRANSACTIONS BETWEEN OR AMONG THE BORROWER AND ANY GUARANTOR OR BETWEEN AND
AMONG ANY GUARANTORS.

 

7.09        BURDENSOME AGREEMENTS.  ENTER INTO ANY CONTRACTUAL OBLIGATION (OTHER
THAN THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE CONTRACTUAL OBLIGATIONS
ENTERED INTO PURSUANT TO THE DEBT SECURITIES, AND THE INDENTURE) THAT (A) LIMITS
THE ABILITY (I) OF ANY SUBSIDIARY TO MAKE RESTRICTED PAYMENTS TO THE BORROWER OR
ANY GUARANTOR OR TO OTHERWISE TRANSFER PROPERTY TO THE BORROWER OR ANY
GUARANTOR, (II) OF ANY SUBSIDIARY TO GUARANTEE THE INDEBTEDNESS OF THE BORROWER
OR (III) OF THE BORROWER OR ANY SUBSIDIARY TO CREATE, INCUR, ASSUME OR SUFFER TO
EXIST LIENS ON PROPERTY OF SUCH PERSON; PROVIDED, HOWEVER, THAT THIS CLAUSE
(III) SHALL NOT PROHIBIT ANY NEGATIVE PLEDGE INCURRED OR PROVIDED IN FAVOR OF
ANY HOLDER OF INDEBTEDNESS PERMITTED UNDER SECTION 7.03(E) SOLELY TO THE EXTENT
ANY SUCH NEGATIVE PLEDGE RELATES TO THE PROPERTY FINANCED BY OR THE SUBJECT OF
SUCH INDEBTEDNESS; OR (B) REQUIRES THE GRANT OF A LIEN TO SECURE AN OBLIGATION
OF SUCH PERSON IF A LIEN IS GRANTED TO SECURE ANOTHER OBLIGATION OF SUCH PERSON.

 

7.10        USE OF PROCEEDS. USE THE PROCEEDS OF ANY CREDIT EXTENSION, WHETHER
DIRECTLY OR INDIRECTLY, AND WHETHER IMMEDIATELY, INCIDENTALLY OR ULTIMATELY, TO
PURCHASE OR CARRY MARGIN STOCK (WITHIN THE MEANING OF REGULATION U OF THE FRB)
OR TO EXTEND CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN
STOCK OR TO REFUND INDEBTEDNESS ORIGINALLY INCURRED FOR SUCH PURPOSE.

 

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7.11        Limitation for Net Products Exposure. Enter into, or otherwise be a
party to any Swap Contract that does not comply with the Risk Management
Policy.  Furthermore, the aggregate value at risk, or VaR limits (as defined
below), calculated in accordance with the Risk Management Policy, shall not at
any time exceed $5,000,000.  For purposes of this Section 7.11, the term “VaR
limits” means the maximum allowable change in aggregate mark-to-market (i.e.,
unrealized losses) dollars, with a given probability, over a one-day time
horizon (as provided in the Risk Management Policy).

 

7.12        Financial Covenants.

 

(a)           Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage
Ratio as of the end of any fiscal quarter of the Borrower, calculated for the
four consecutive fiscal quarters then ended, to be less than the ratio set forth
below opposite such fiscal quarter:

 

Four Fiscal Quarters Ending

 

Minimum
Fixed Charge Coverage
Ratio

 

 

 

 

 

Closing through December 31, 2003

 

3.25 to 1.0

 

March 31, 2004 through December 31, 2004

 

3.75 to 1.0

 

March 31, 2005 and each fiscal quarter thereafter

 

4.25 to 1.0

 

 

(b)           Debt to Capitalization Ratio.  Permit the Debt to Capitalization
Ratio for any fiscal quarter of the Borrower to be greater than 0.55 to 1.0.

 

(c)           Senior Debt to Capitalization Ratio.  Permit the Senior Debt to
Capitalization Ratio for any fiscal quarter of the Borrower to be greater than
0.40 to 1.0.

ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES

 

8.01        EVENTS OF DEFAULT. ANY OF THE FOLLOWING SHALL CONSTITUTE AN EVENT OF
DEFAULT:

 

(a)           Non-Payment.  The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any Loan
or any L/C Obligation, or (ii) within ten days after the same becomes due, any
interest on any Loan or on any L/C Obligation, or any commitment facility or
other fee due hereunder, or (iii) within ten days after the same becomes due,
any other amount payable hereunder or under any other Loan Document; or

 

(b)           Specific Covenants.  The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Section 6.03, Sections 6.12
through 6.16 or Article VII; or

 

(c)           Other Defaults.  Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or

 

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(d)           Representations and Warranties.  Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading when made or deemed made and such representation or warranty does not
become true and correct within thirty (30) days; or

 

(e)           Cross-Default.

 

(i)                            the Borrower or any Subsidiary (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any of the Debt Securities or
the Subordinated Debt, or (B) fails to observe or perform any other agreement or
condition relating to the Debt Securities or the Subordinated Debt, or any other
event occurs, in the instance of both the circumstances of (i)(A) and (i)(B),
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity; or

 

(ii)                           the Borrower or any Subsidiary (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts, the
Debt Securities and the Subordinated Debt), (B) fails to observe or perform any
other agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, in the instance of both the circumstances of
(ii)(A) and (ii)(B), the effect of which default or other event is to cause, or
to permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded unless the Borrower or a Subsidiary
is contesting the validity of such Obligation by appropriate proceedings and has
set aside on its books adequate allowance accounts therefor in accordance with
GAAP; or

 

(iii)                          there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which the Borrower or any Subsidiary
is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined in such Swap Contract) under such Swap Contract
as to which the Borrower or any Subsidiary is an Affected Party (as so defined)
that in the case of (A) or (B) causes Borrower or any Subsidiary to become
obligated to make payments to the counterparty thereunder and the

 

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aggregate amount of all such payments for which Borrower is obligated under Swap
Contracts at any time exceeds $10,000,000; or

 

(f)            Insolvency Proceedings, Etc.  Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

 

(g)           Inability to Pay Debts; Attachment.  (i) the Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against any of the
Collateral or all or any material part of the property of any such Person and is
not released, vacated or fully bonded within 30 days after its issue or levy; or

 

(h)           Judgments.  There is entered against the Borrower or any
Subsidiary (i) during any fiscal year of the Borrower, any one or more final
judgments or orders for the payment of money in an aggregate amount exceeding
$10,000,000 (to the extent not covered by independent third-party insurance as
to which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 10 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or

 

(i)            ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000,
or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $10,000,000; or

 

(j)            Invalidity of Loan Documents.  Any Loan Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or satisfaction in full of all the Obligations, ceases to be
in full force and effect; or any Loan Party or any other Person contests in any
manner the validity or enforceability of any Loan Document; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or

 

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(k)           Change of Control.  There occurs any Change of Control with
respect to the Borrower; or

 

(l)            Debt Securities.  Without the express prior written consent of
Required Lenders, the Borrower amends or modifies the terms of any of the
documents or instruments governing, or otherwise executed in connection with,
any of the Debt Securities (including, but not limited to, an amendment or
modification to shorten the maturity of the Debt Securities or increase the
maximum principal amount of the Debt Securities); provided, however, that
without the consent of any Lender, the Borrower may amend such documents or
instruments (1) to increase the interest rate or fees payable under or with
respect to the Debt Securities, (2) to conform to amendments or modifications
made to the Loan Documents, and (3) to make changes in the administration of the
Debt Securities; or

 

(m)          Subordinated Debt.  Without the express prior written consent of
Required Lenders, the Borrower amends or modifies the terms of any of the
documents or instruments governing, or otherwise executed in connection with,
the Subordinated Debt, including but not limited to, an amendment or
modification to (a) shorten the maturity of the Subordinated Debt, (b) increase
the maximum principal amount of the Subordinated Debt, or (c) modify the terms
of the subordination of the Subordinated Debt to the Senior Debt; or

 

(n)           Preferred Stock.  Without the express prior written consent of
Required Lenders, the Borrower amends or modifies any term of the Preferred
Stock.

 

8.02        REMEDIES UPON EVENT OF DEFAULT. IF ANY EVENT OF DEFAULT OCCURS AND
IS CONTINUING, THE ADMINISTRATIVE AGENT SHALL, AT THE REQUEST OF, OR MAY, WITH
THE CONSENT OF, THE REQUIRED LENDERS, TAKE ANY OR ALL OF THE FOLLOWING ACTIONS:

 

(a)           declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;

 

(b)           declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;

 

(c)           require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and

 

(d)           exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;

 

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the

 

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obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

 

8.03        Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations (after distribution of any proceeds
received by Administrative Agent under the Security Documents in accordance with
the terms of the Intercreditor Agreement) shall be applied by the Administrative
Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;

 

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

 

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur.  If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE IX.
ADMINISTRATIVE AGENT

 

9.01        APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.

 

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(a)           Each Lender hereby irrevocably appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document (including, without limitation, as a
secured party under any Security Document), together with such powers as are
reasonably incidental thereto.  Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Without limiting the generality of the foregoing
sentence, the use of the term “agent” herein and in the other Loan Documents
with reference to the Administrative Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

 

(b)           The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
“Administrative Agent” as used in this Article IX and in the definition of
“Agent-Related Person” included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.

 

9.02        Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties. 
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.

 

9.03        Liability of Administrative Agent. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (in all cases, whether or not arising, in whole or in part,
out of the negligence of such Agent-Related Person, except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by any Loan Party or
any officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of

 

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ANY LOAN PARTY OR ANY OTHER PARTY TO ANY LOAN DOCUMENT TO PERFORM ITS
OBLIGATIONS HEREUNDER OR THEREUNDER.  NO AGENT-RELATED PERSON SHALL BE UNDER ANY
OBLIGATION TO ANY LENDER OR PARTICIPANT TO ASCERTAIN OR TO INQUIRE AS TO THE
OBSERVANCE OR PERFORMANCE OF ANY OF THE AGREEMENTS CONTAINED IN, OR CONDITIONS
OF, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR TO INSPECT THE PROPERTIES,
BOOKS OR RECORDS OF ANY LOAN PARTY OR ANY AFFILIATE THEREOF.

 

9.04        Reliance by Administrative Agent.

 

(a)           The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent.  The Administrative Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.

 

(b)           For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

9.05        Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default.”  The Administrative Agent will notify the
Lenders of its receipt of any such notice.  The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.

 

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9.06        Credit Decision; Disclosure of Information by Administrative Agent.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession.  Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder.  Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.

 

4.07        Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it, including any
Indemnified Liabilities in all cases, whether or not caused by or arising, in
whole or in part, out of the negligence of the Indemnitee; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person’s own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section.  Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower.  The undertaking in this Section

 

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SHALL SURVIVE TERMINATION OF THE AGGREGATE COMMITMENTS, THE PAYMENT OF ALL OTHER
OBLIGATIONS AND THE RESIGNATION OF THE ADMINISTRATIVE AGENT.

 

9.08        Administrative Agent in its Individual Capacity. Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
each of the Loan Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent or the L/C Issuer hereunder and
without notice to or consent of the Lenders.  The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them.  With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms “Lender” and “Lenders”
include Bank of America in its individual capacity.

 

9.09        Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 30 days’ notice to the Lenders; provided that any
such resignation by Bank of America shall also constitute its resignation as L/C
Issuer.  If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed). 
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders.  Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and L/C Issuer and the respective
terms “Administrative Agent” and “L/C Issuer” shall mean such successor
administrative agent, Letter of Credit issuer and the retiring Administrative
Agent’s appointment, powers and duties as Administrative Agent shall be
terminated and the retiring L/C Issuer’s rights, powers and duties as such shall
be terminated, without any other or further act or deed on the part of such
retiring L/C Issuer or any other Lender, other than the obligation of the
successor L/C Issuer to issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or to make other
arrangements satisfactory to the retiring L/C Issuer to effectively assume the
obligations of the retiring L/C Issuer with respect to such Letters of Credit. 
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04 and
10.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.  If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

 

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9.10        Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise

 

(a)         to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(i) and (j), 2.08 and 10.04)
allowed in such judicial proceeding; and

 

(b)         to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.08 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

9.11        Collateral and Guaranty Matters.  The Lenders irrevocably authorize
the Administrative Agent, at its option and in its discretion,

 

(a)           to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is part of a Disposition of property permitted
hereunder or under any other Loan Document or is permitted to be released under
Section 6.13, or (iii) subject to Section 10.01, if approved, authorized or
ratified in writing by the Required Lenders;

 

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(b)           to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i); and

 

(c)           to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder or ceases to be a Guarantor as provided under Section 6.13.

 

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.11.

 

9.12        Other Agents; Arrangers and Managers. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
“syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead
manager,” “arranger,” “lead arranger” or “co-arranger” shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, in the case of such Lenders, those applicable to all Lenders as such. 
Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender.  Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.

 

ARTICLE X.
MISCELLANEOUS

 

10.01      AMENDMENTS, ETC. NO AMENDMENT OR WAIVER OF ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND NO CONSENT TO ANY DEPARTURE BY THE
BORROWER OR ANY OTHER LOAN PARTY THEREFROM, SHALL BE EFFECTIVE UNLESS IN WRITING
SIGNED BY THE REQUIRED LENDERS AND THE BORROWER OR THE APPLICABLE LOAN PARTY, AS
THE CASE MAY BE, AND ACKNOWLEDGED BY THE ADMINISTRATIVE AGENT, AND EACH SUCH
WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE
SPECIFIC PURPOSE FOR WHICH GIVEN; PROVIDED, HOWEVER, THAT NO SUCH AMENDMENT,
WAIVER OR CONSENT SHALL:

 

(a)           waive any condition set forth in Section 4.01(a) or (b) without
the written consent of each Lender;

 

(b)           extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;

 

(c)           postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;

 

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(d)           reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iii) of the second proviso
to this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document, or change the manner of computation of any financial ratio
(including any change in any applicable defined term) used in determining the
Applicable Rate that would result in a reduction of any interest rate on any
Loan or any fee payable hereunder without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary (i) to waive any obligation of the Borrower
to pay interest at the Default Rate or (ii) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Loan or L/C Borrowing
or to reduce any fee payable hereunder;

 

(e)           change Section 2.12 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;

 

(f)            change any provision of this Section or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender;

 

(g)           release any Guarantor from the Guaranty without the written
consent of each Lender unless authorized by Section 6.13 or Section 9.11(c) or
required by any applicable PUC or FERC; or

 

(h)           release any Collateral from any Security Document without the
written consent of each Lender unless authorized such release is authorized by
Section 6.13 or Section 9.11(a) or required by any applicable PUC or FERC.

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto. 
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

 

10.02      NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.

 

(a)           General.  Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission).  All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other

 

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communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:

 

(i)                            if to the Borrower, the Administrative Agent or
the L/C Issuer, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 10.02 or to such other
address, facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the other parties; and

 

(ii)                           if to any other Lender, to the address, facsimile
number, electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such party
in a notice to the Borrower, the Administrative Agent and the L/C Issuer.

 

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent and the L/C Issuer pursuant to Article II shall not
be effective until actually received by such Person.  In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.

 

(b)           Effectiveness of Facsimile Documents and Signatures.  Loan
Documents may be transmitted and/or signed by facsimile.  The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders.  The Administrative
Agent may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

 

(c)           Limited Use of Electronic Mail.  Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.

 

(d)           Reliance by Administrative Agent and Lenders.  The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices issued
in accordance with Section 10.02(a) (including telephonic Loan Notices)
purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof. 
The Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and

 

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liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower.  All telephonic notices to
and other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

10.03      NO WAIVER; CUMULATIVE REMEDIES. NO FAILURE BY ANY LENDER OR THE
ADMINISTRATIVE AGENT TO EXERCISE, AND NO DELAY BY ANY SUCH PERSON IN EXERCISING,
ANY RIGHT, REMEDY, POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER
THEREOF; NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY RIGHT, REMEDY, POWER OR
PRIVILEGE HEREUNDER PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE
EXERCISE OF ANY OTHER RIGHT, REMEDY, POWER OR PRIVILEGE.  THE RIGHTS, REMEDIES,
POWERS AND PRIVILEGES HEREIN PROVIDED ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY
RIGHTS, REMEDIES, POWERS AND PRIVILEGES PROVIDED BY LAW.

 

10.04      ATTORNEY COSTS, EXPENSES AND TAXES. THE BORROWER AGREES (A) TO PAY OR
REIMBURSE THE ADMINISTRATIVE AGENT FOR ALL REASONABLE COSTS AND EXPENSES
INCURRED IN CONNECTION WITH THE DEVELOPMENT, PREPARATION, NEGOTIATION AND
EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY AMENDMENT,
WAIVER, CONSENT OR OTHER MODIFICATION OF THE PROVISIONS HEREOF AND THEREOF
(WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY ARE
CONSUMMATED), AND THE CONSUMMATION AND ADMINISTRATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY, INCLUDING ALL ATTORNEY COSTS, AND (B) TO PAY OR
REIMBURSE THE ADMINISTRATIVE AGENT AND EACH LENDER FOR ALL REASONABLE COSTS AND
EXPENSES INCURRED IN CONNECTION WITH THE ENFORCEMENT, ATTEMPTED ENFORCEMENT, OR
PRESERVATION OF ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS (INCLUDING ALL SUCH COSTS AND EXPENSES INCURRED DURING ANY “WORKOUT”
OR RESTRUCTURING IN RESPECT OF THE OBLIGATIONS AND DURING ANY LEGAL PROCEEDING,
INCLUDING ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW), INCLUDING ALL ATTORNEY
COSTS.  THE FOREGOING COSTS AND EXPENSES SHALL INCLUDE ALL REASONABLE SEARCH,
FILING, RECORDING, TITLE INSURANCE AND APPRAISAL CHARGES AND FEES AND TAXES
RELATED THERETO, AND OTHER OUT-OF-POCKET EXPENSES INCURRED BY THE ADMINISTRATIVE
AGENT AND THE REASONABLE COST OF INDEPENDENT PUBLIC ACCOUNTANTS AND OTHER
OUTSIDE EXPERTS RETAINED BY THE ADMINISTRATIVE AGENT OR ANY LENDER.  ALL AMOUNTS
DUE UNDER THIS SECTION 10.04 SHALL BE PAYABLE WITHIN TEN BUSINESS DAYS AFTER
DEMAND THEREFOR.  THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE TERMINATION
OF THE AGGREGATE COMMITMENTS AND REPAYMENT OF ALL OTHER OBLIGATIONS.

 

10.05      INDEMNIFICATION BY THE BORROWER. WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE CONSUMMATED, THE BORROWER SHALL INDEMNIFY AND HOLD
HARMLESS EACH AGENT-RELATED PERSON, EACH LENDER AND THEIR RESPECTIVE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, AGENTS AND ATTORNEYS-IN-FACT
(COLLECTIVELY THE “INDEMNITEES”) FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES AND DISBURSEMENTS (INCLUDING ATTORNEY COSTS) OF ANY KIND
OR NATURE WHATSOEVER WHICH MAY AT ANY TIME BE IMPOSED ON, INCURRED BY OR
ASSERTED AGAINST ANY SUCH INDEMNITEE IN ANY WAY RELATING TO OR ARISING OUT OF OR
IN CONNECTION WITH (A) THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE OR
ADMINISTRATION OF ANY LOAN DOCUMENT OR ANY OTHER AGREEMENT, LETTER OR INSTRUMENT
DELIVERED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY, (B) ANY COMMITMENT, LOAN
OR LETTER OF CREDIT OR THE USE OR PROPOSED USE OF THE PROCEEDS THEREFROM
(INCLUDING ANY REFUSAL BY THE L/C ISSUER TO HONOR A DEMAND FOR PAYMENT UNDER A
LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN

 

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CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER
OF CREDIT), (C) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS
ON OR FROM ANY PROPERTY CURRENTLY OR FORMERLY OWNED OR OPERATED BY THE BORROWER,
ANY SUBSIDIARY OR ANY OTHER LOAN PARTY, OR ANY ENVIRONMENTAL LIABILITY RELATED
IN ANY WAY TO THE BORROWER, ANY SUBSIDIARY OR ANY OTHER LOAN PARTY, OR (D) ANY
ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO
ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY
(INCLUDING ANY INVESTIGATION OF, PREPARATION FOR, OR DEFENSE OF ANY PENDING OR
THREATENED CLAIM, INVESTIGATION, LITIGATION OR PROCEEDING) AND REGARDLESS OF
WHETHER ANY INDEMNITEE IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE
“INDEMNIFIED LIABILITIES”), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING,
IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF THE INDEMNITEE; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.  NO INDEMNITEE
SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY
INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR
INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL
ANY INDEMNITEE HAVE ANY LIABILITY FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS
ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE
CLOSING DATE).  ALL AMOUNTS DUE UNDER THIS SECTION 10.05 SHALL BE PAYABLE WITHIN
TEN BUSINESS DAYS AFTER DEMAND THEREFOR.  THE AGREEMENTS IN THIS SECTION SHALL
SURVIVE THE RESIGNATION OF THE ADMINISTRATIVE AGENT, THE REPLACEMENT OF ANY
LENDER, THE TERMINATION OF THE AGGREGATE COMMITMENTS AND THE REPAYMENT,
SATISFACTION OR DISCHARGE OF ALL THE OTHER OBLIGATIONS.

 

10.06      PAYMENTS SET ASIDE. TO THE EXTENT THAT ANY PAYMENT BY OR ON BEHALF OF
THE BORROWER IS MADE TO THE ADMINISTRATIVE AGENT OR ANY LENDER, OR THE
ADMINISTRATIVE AGENT OR ANY LENDER EXERCISES ITS RIGHT OF SET-OFF, AND SUCH
PAYMENT OR THE PROCEEDS OF SUCH SET-OFF OR ANY PART THEREOF IS SUBSEQUENTLY
INVALIDATED, DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE OR REQUIRED
(INCLUDING PURSUANT TO ANY SETTLEMENT ENTERED INTO BY THE ADMINISTRATIVE AGENT
OR SUCH LENDER IN ITS DISCRETION) TO BE REPAID TO A TRUSTEE, RECEIVER OR ANY
OTHER PARTY, IN CONNECTION WITH ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW OR
OTHERWISE, THEN (A) TO THE EXTENT OF SUCH RECOVERY, THE OBLIGATION OR PART
THEREOF ORIGINALLY INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUED IN
FULL FORCE AND EFFECT AS IF SUCH PAYMENT HAD NOT BEEN MADE OR SUCH SET-OFF HAD
NOT OCCURRED, AND (B) EACH LENDER SEVERALLY AGREES TO PAY TO THE ADMINISTRATIVE
AGENT UPON DEMAND ITS APPLICABLE SHARE OF ANY AMOUNT SO RECOVERED FROM OR REPAID
BY THE ADMINISTRATIVE AGENT, PLUS INTEREST THEREON FROM THE DATE OF SUCH DEMAND
TO THE DATE SUCH PAYMENT IS MADE AT A RATE PER ANNUM EQUAL TO THE FEDERAL FUNDS
RATE FROM TIME TO TIME IN EFFECT.

10.07      SUCCESSORS AND ASSIGNS.

 

(a)           The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the

 

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provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in L/C Obligations) at the time
owing to it); provided that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund (as defined in subsection (g) of this Section)
with respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed); (ii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement with respect
to the Loans or the Commitment assigned; (iii) any assignment of a Commitment
must be approved by the Administrative Agent and the L/C Issuer unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500.  Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment).  Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

 

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(c)           The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

 

(d)           Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower’s Affiliates
or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender’s participations in L/C
Obligations) owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 10.01
that directly affects such Participant.  Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section.  To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.

 

(e)           A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent.  A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 3.01 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
10.15 as though it were a Lender.

 

(f)            Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its
Note, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its

 

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obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

(g)           As used herein, the following terms have the following meanings:

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent and the L/C Issuer, and (ii) unless an Event of
Default has occurred and is continuing, the Borrower (each such approval not to
be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Borrower or any of the
Borrower’s Affiliates or Subsidiaries and, provided further, that any such
Eligible Assignee shall have capital and surplus in excess of $1,000,000,000
and, in Administrative Agent’s reasonable opinion, has experience in lending to
companies in the oil and gas business.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

10.08      CONFIDENTIALITY. EACH OF THE ADMINISTRATIVE AGENT AND THE LENDERS
AGREES TO MAINTAIN THE CONFIDENTIALITY OF THE INFORMATION (AS DEFINED BELOW),
EXCEPT THAT INFORMATION MAY BE DISCLOSED (A) TO ITS AND ITS AFFILIATES’
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, INCLUDING ACCOUNTANTS, LEGAL COUNSEL
AND OTHER ADVISORS (IT BEING UNDERSTOOD THAT THE PERSONS TO WHOM SUCH DISCLOSURE
IS MADE WILL BE INFORMED OF THE CONFIDENTIAL NATURE OF SUCH INFORMATION AND
INSTRUCTED TO KEEP SUCH INFORMATION CONFIDENTIAL); (B) TO THE EXTENT REQUESTED
BY ANY REGULATORY AUTHORITY; (C) TO THE EXTENT REQUIRED BY APPLICABLE LAWS OR
REGULATIONS OR BY ANY SUBPOENA OR SIMILAR LEGAL PROCESS; (D) TO ANY OTHER PARTY
TO THIS AGREEMENT; (E) IN CONNECTION WITH THE EXERCISE OF ANY REMEDIES HEREUNDER
OR ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT
OF RIGHTS HEREUNDER; (F) SUBJECT TO AN AGREEMENT CONTAINING PROVISIONS
SUBSTANTIALLY THE SAME AS THOSE OF THIS SECTION, TO (I) ANY ELIGIBLE ASSIGNEE OF
OR PARTICIPANT IN, OR ANY PROSPECTIVE ELIGIBLE ASSIGNEE OF OR PARTICIPANT IN,
ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR (II) ANY DIRECT OR
INDIRECT CONTRACTUAL COUNTERPARTY OR PROSPECTIVE COUNTERPARTY (OR SUCH
CONTRACTUAL COUNTERPARTY’S OR PROSPECTIVE COUNTERPARTY’S PROFESSIONAL ADVISOR)
TO ANY CREDIT DERIVATIVE TRANSACTION RELATING TO OBLIGATIONS OF THE LOAN
PARTIES; (G) WITH THE CONSENT OF THE BORROWER; (H) TO THE EXTENT SUCH
INFORMATION (I) BECOMES PUBLICLY AVAILABLE OTHER THAN AS A RESULT OF A BREACH OF
THIS SECTION OR (II) BECOMES AVAILABLE TO THE ADMINISTRATIVE AGENT OR ANY LENDER
ON A NONCONFIDENTIAL BASIS FROM A SOURCE OTHER THAN THE BORROWER; OR (I) TO THE
NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS OR ANY OTHER SIMILAR
ORGANIZATION.  IN ADDITION, THE ADMINISTRATIVE AGENT AND THE LENDERS MAY
DISCLOSE THE EXISTENCE OF THIS AGREEMENT AND INFORMATION ABOUT THIS AGREEMENT TO
MARKET DATA COLLECTORS, SIMILAR SERVICE PROVIDERS TO THE LENDING INDUSTRY, AND
SERVICE PROVIDERS TO THE ADMINISTRATIVE AGENT AND THE LENDERS IN CONNECTION WITH
THE ADMINISTRATION AND MANAGEMENT OF THIS AGREEMENT, THE OTHER LOAN

 

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DOCUMENTS, THE COMMITMENTS, AND THE CREDIT EXTENSIONS.  FOR THE PURPOSES OF THIS
SECTION, “INFORMATION” MEANS ALL INFORMATION RECEIVED FROM ANY LOAN PARTY
RELATING TO ANY LOAN PARTY OR ITS BUSINESS, OTHER THAN ANY SUCH INFORMATION THAT
IS AVAILABLE TO THE ADMINISTRATIVE AGENT OR ANY LENDER ON A NONCONFIDENTIAL
BASIS PRIOR TO DISCLOSURE BY ANY LOAN PARTY; PROVIDED THAT, IN THE CASE OF
INFORMATION RECEIVED IN WRITING FROM A LOAN PARTY AFTER THE DATE HEREOF, SUCH
INFORMATION IS CLEARLY IDENTIFIED IN WRITING AT THE TIME OF DELIVERY AS
CONFIDENTIAL.  ANY PERSON REQUIRED TO MAINTAIN THE CONFIDENTIALITY OF
INFORMATION AS PROVIDED IN THIS SECTION SHALL BE CONSIDERED TO HAVE COMPLIED
WITH ITS OBLIGATION TO DO SO IF SUCH PERSON HAS EXERCISED THE SAME DEGREE OF
CARE TO MAINTAIN THE CONFIDENTIALITY OF SUCH INFORMATION AS SUCH PERSON WOULD
ACCORD TO ITS OWN CONFIDENTIAL INFORMATION.  NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, “INFORMATION” SHALL NOT INCLUDE, AND THE ADMINISTRATIVE AGENT AND
EACH LENDER MAY DISCLOSE WITHOUT LIMITATION OF ANY KIND, ANY INFORMATION WITH
RESPECT TO THE “TAX TREATMENT” AND “TAX STRUCTURE” (IN EACH CASE, WITHIN THE
MEANING OF TREASURY REGULATION SECTION 1.6011-4) OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER
TAX ANALYSES) THAT ARE PROVIDED TO THE ADMINISTRATIVE AGENT OR SUCH LENDER
RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE; PROVIDED THAT WITH RESPECT TO
ANY DOCUMENT OR SIMILAR ITEM THAT IN EITHER CASE CONTAINS INFORMATION CONCERNING
THE TAX TREATMENT OR TAX STRUCTURE OF THE TRANSACTION AS WELL AS OTHER
INFORMATION, THIS SENTENCE SHALL ONLY APPLY TO SUCH PORTIONS OF THE DOCUMENT OR
SIMILAR ITEM THAT RELATE TO THE TAX TREATMENT OR TAX STRUCTURE OF THE LOANS,
LETTERS OF CREDIT AND TRANSACTIONS CONTEMPLATED HEREBY.

 

10.09      SET-OFF. IN ADDITION TO ANY RIGHTS AND REMEDIES OF THE LENDERS
PROVIDED BY LAW, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF
DEFAULT, EACH LENDER IS AUTHORIZED AT ANY TIME AND FROM TIME TO TIME, WITHOUT
PRIOR NOTICE TO THE BORROWER OR ANY OTHER LOAN PARTY, ANY SUCH NOTICE BEING
WAIVED BY THE BORROWER (ON ITS OWN BEHALF AND ON BEHALF OF EACH LOAN PARTY) TO
THE FULLEST EXTENT PERMITTED BY LAW, TO SET OFF AND APPLY ANY AND ALL DEPOSITS
(GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR FINAL) AT ANY TIME HELD BY,
AND OTHER INDEBTEDNESS AT ANY TIME OWING BY, SUCH LENDER TO OR FOR THE CREDIT OR
THE ACCOUNT OF THE RESPECTIVE LOAN PARTIES AGAINST ANY AND ALL OBLIGATIONS OWING
TO SUCH LENDER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, NOW OR HEREAFTER
EXISTING, IRRESPECTIVE OF WHETHER OR NOT THE ADMINISTRATIVE AGENT OR SUCH LENDER
SHALL HAVE MADE DEMAND UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
ALTHOUGH SUCH OBLIGATIONS MAY BE CONTINGENT OR UNMATURED OR DENOMINATED IN A
CURRENCY DIFFERENT FROM THAT OF THE APPLICABLE DEPOSIT OR INDEBTEDNESS.  EACH
LENDER AGREES PROMPTLY TO NOTIFY THE BORROWER AND THE ADMINISTRATIVE AGENT AFTER
ANY SUCH SET-OFF AND APPLICATION MADE BY SUCH LENDER; PROVIDED, HOWEVER, THAT
THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE VALIDITY OF SUCH SET-OFF
AND APPLICATION.

 

10.10      INTEREST RATE LIMITATION. AGENT, LC ISSUER, LENDERS, THE BORROWER AND
GUARANTORS INTEND TO CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW
FROM TIME TO TIME IN EFFECT.  IN FURTHERANCE THEREOF SUCH PERSONS STIPULATE AND
AGREE THAT NONE OF THE TERMS AND PROVISIONS CONTAINED IN THE LOAN DOCUMENTS
SHALL EVER BE CONSTRUED TO CREATE A CONTRACT TO PAY, FOR THE USE, FORBEARANCE OR
DETENTION OF MONEY, INTEREST IN EXCESS OF THE MAXIMUM AMOUNT OF INTEREST
PERMITTED TO BE CHARGED BY APPLICABLE LAW FROM TIME TO TIME IN EFFECT.  NEITHER
THE BORROWER NOR ANY GUARANTOR NOR ANY PRESENT OR FUTURE GUARANTORS, ENDORSERS,
OR OTHER PERSONS HEREAFTER BECOMING LIABLE FOR PAYMENT OF ANY OBLIGATION SHALL
EVER BE LIABLE FOR UNEARNED INTEREST THEREON OR SHALL EVER BE REQUIRED TO PAY
INTEREST THEREON IN EXCESS OF THE MAXIMUM AMOUNT THAT

 

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MAY BE LAWFULLY CHARGED UNDER APPLICABLE LAW FROM TIME TO TIME IN EFFECT, AND
THE PROVISIONS OF THIS SECTION SHALL CONTROL OVER ALL OTHER PROVISIONS OF THE
LOAN DOCUMENTS WHICH MAY BE IN CONFLICT OR APPARENT CONFLICT HEREWITH.  AGENT,
LC ISSUER AND LENDERS EXPRESSLY DISAVOW ANY INTENTION TO CHARGE OR COLLECT
EXCESSIVE UNEARNED INTEREST OR FINANCE CHARGES IN THE EVENT THE MATURITY OF ANY
OBLIGATION IS ACCELERATED.  IF (A) THE MATURITY OF ANY OBLIGATION IS ACCELERATED
FOR ANY REASON, (B) ANY OBLIGATION IS PREPAID AND AS A RESULT ANY AMOUNTS HELD
TO CONSTITUTE INTEREST ARE DETERMINED TO BE IN EXCESS OF THE LEGAL MAXIMUM, OR
(C) AGENT, LC ISSUER OR ANY LENDER OR ANY OTHER HOLDER OF ANY OR ALL OF THE
OBLIGATIONS SHALL OTHERWISE COLLECT MONEYS WHICH ARE DETERMINED TO CONSTITUTE
INTEREST WHICH WOULD OTHERWISE INCREASE THE INTEREST ON ANY OR ALL OF THE
OBLIGATIONS TO AN AMOUNT IN EXCESS OF THAT PERMITTED TO BE CHARGED BY APPLICABLE
LAW THEN IN EFFECT, THEN ALL SUMS DETERMINED TO CONSTITUTE INTEREST IN EXCESS OF
SUCH LEGAL LIMIT SHALL, WITHOUT PENALTY, BE PROMPTLY APPLIED TO REDUCE THE THEN
OUTSTANDING PRINCIPAL OF THE RELATED OBLIGATIONS OR, AT AGENT’S, LC ISSUER’S OR
SUCH LENDER’S OR HOLDER’S OPTION, PROMPTLY RETURNED TO THE BORROWER OR THE OTHER
PAYOR THEREOF UPON SUCH DETERMINATION.  IN DETERMINING WHETHER OR NOT THE
INTEREST PAID OR PAYABLE, UNDER ANY SPECIFIC CIRCUMSTANCE, EXCEEDS THE MAXIMUM
AMOUNT PERMITTED UNDER APPLICABLE LAW, AGENT, LC ISSUER, LENDERS AND THE RELATED
PERSONS (AND ANY OTHER PAYORS THEREOF) SHALL TO THE GREATEST EXTENT PERMITTED
UNDER APPLICABLE LAW, (I) CHARACTERIZE ANY NON-PRINCIPAL PAYMENT AS AN EXPENSE,
FEE OR PREMIUM RATHER THAN AS INTEREST, (II) EXCLUDE VOLUNTARY PREPAYMENTS AND
THE EFFECTS THEREOF, AND (III) AMORTIZE, PRORATE, ALLOCATE, AND SPREAD THE TOTAL
AMOUNT OF INTEREST THROUGHOUT THE ENTIRE CONTEMPLATED TERM OF THE INSTRUMENTS
EVIDENCING THE OBLIGATIONS IN ACCORDANCE WITH THE AMOUNTS OUTSTANDING FROM TIME
TO TIME THEREUNDER AND THE MAXIMUM LEGAL RATE OF INTEREST FROM TIME TO TIME IN
EFFECT UNDER APPLICABLE LAW IN ORDER TO LAWFULLY CHARGE THE MAXIMUM AMOUNT OF
INTEREST PERMITTED UNDER APPLICABLE LAW.  IN THE EVENT APPLICABLE LAW PROVIDES
FOR AN INTEREST CEILING UNDER CHAPTER 303 OF THE TEXAS FINANCE CODE, AS AMENDED,
FOR THAT DAY, THE CEILING SHALL BE THE “WEEKLY CEILING” AS DEFINED IN THE TEXAS
FINANCE CODE, PROVIDED THAT IF ANY APPLICABLE LAW PERMITS GREATER INTEREST, THE
LAW PERMITTING THE GREATEST INTEREST SHALL APPLY AND SHALL BE USED WHEN
APPROPRIATE IN DETERMINING THE HIGHEST LAWFUL RATE.  AS USED IN THIS SECTION THE
TERM “APPLICABLE LAW” MEANS THE LAWS OF THE STATE OF TEXAS OR THE LAWS OF THE
UNITED STATES OF AMERICA, WHICHEVER LAWS ALLOW THE GREATER INTEREST, AS SUCH
LAWS NOW EXIST OR MAY BE CHANGED OR AMENDED OR COME INTO EFFECT IN THE FUTURE.

 

10.11      COUNTERPARTS.   THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.  THIS AGREEMENT MAY BE
DULY EXECUTED BY FACSIMILE OR OTHER ELECTRONIC TRANSMISSION.

 

10.12      INTEGRATION.  THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS,
COMPRISES THE COMPLETE AND INTEGRATED AGREEMENT OF THE PARTIES ON THE SUBJECT
MATTER HEREOF AND THEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS, WRITTEN OR ORAL,
ON SUCH SUBJECT MATTER.  IN THE EVENT OF ANY CONFLICT BETWEEN THE PROVISIONS OF
THIS AGREEMENT AND THOSE OF ANY OTHER LOAN DOCUMENT, THE PROVISIONS OF THIS
AGREEMENT SHALL CONTROL; PROVIDED THAT THE INCLUSION OF SUPPLEMENTAL RIGHTS OR
REMEDIES IN FAVOR OF THE ADMINISTRATIVE AGENT OR THE LENDERS IN ANY OTHER LOAN
DOCUMENT SHALL NOT BE DEEMED A CONFLICT WITH THIS AGREEMENT.  EACH LOAN DOCUMENT
WAS DRAFTED WITH THE JOINT PARTICIPATION OF THE RESPECTIVE PARTIES THERETO AND
SHALL BE CONSTRUED NEITHER AGAINST NOR IN FAVOR OF ANY PARTY, BUT RATHER IN
ACCORDANCE WITH THE FAIR MEANING THEREOF.

 

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10.13      SURVIVAL OF REPRESENTATIONS AND WARRANTIES. ALL REPRESENTATIONS AND
WARRANTIES MADE HEREUNDER AND IN ANY OTHER LOAN DOCUMENT OR OTHER DOCUMENT
DELIVERED PURSUANT HERETO OR THERETO OR IN CONNECTION HEREWITH OR THEREWITH
SHALL SURVIVE THE EXECUTION AND DELIVERY HEREOF AND THEREOF.  SUCH
REPRESENTATIONS AND WARRANTIES HAVE BEEN OR WILL BE RELIED UPON BY THE
ADMINISTRATIVE AGENT AND EACH LENDER, REGARDLESS OF ANY INVESTIGATION MADE BY
THE ADMINISTRATIVE AGENT OR ANY LENDER OR ON THEIR BEHALF AND NOTWITHSTANDING
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE HAD NOTICE OR KNOWLEDGE OF
ANY DEFAULT AT THE TIME OF ANY CREDIT EXTENSION, AND SHALL CONTINUE IN FULL
FORCE AND EFFECT AS LONG AS ANY LOAN OR ANY OTHER OBLIGATION HEREUNDER SHALL
REMAIN UNPAID OR UNSATISFIED OR ANY LETTER OF CREDIT SHALL REMAIN OUTSTANDING.

 

10.14      SEVERABILITY. IF ANY PROVISION OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IS HELD TO BE ILLEGAL, INVALID OR UNENFORCEABLE, (A) THE LEGALITY,
VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS SHALL NOT BE AFFECTED OR IMPAIRED THEREBY AND (B) THE
PARTIES SHALL ENDEAVOR IN GOOD FAITH NEGOTIATIONS TO REPLACE THE ILLEGAL,
INVALID OR UNENFORCEABLE PROVISIONS WITH VALID PROVISIONS THE ECONOMIC EFFECT OF
WHICH COMES AS CLOSE AS POSSIBLE TO THAT OF THE ILLEGAL, INVALID OR
UNENFORCEABLE PROVISIONS.  THE INVALIDITY OF A PROVISION IN A PARTICULAR
JURISDICTION SHALL NOT INVALIDATE OR RENDER UNENFORCEABLE SUCH PROVISION IN ANY
OTHER JURISDICTION.

 

10.15      TAX FORMS. (A)  (I)  EACH LENDER THAT IS NOT A “UNITED STATES PERSON”
WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE (A “FOREIGN LENDER”) SHALL
DELIVER TO THE ADMINISTRATIVE AGENT, PRIOR TO RECEIPT OF ANY PAYMENT SUBJECT TO
WITHHOLDING UNDER THE CODE (OR UPON ACCEPTING AN ASSIGNMENT OF AN INTEREST
HEREIN), TWO DULY SIGNED COMPLETED COPIES OF EITHER IRS FORM W-8BEN OR ANY
SUCCESSOR THERETO (RELATING TO SUCH FOREIGN LENDER AND ENTITLING IT TO AN
EXEMPTION FROM, OR REDUCTION OF, WITHHOLDING TAX ON ALL PAYMENTS TO BE MADE TO
SUCH FOREIGN LENDER BY THE BORROWER PURSUANT TO THIS AGREEMENT) OR IRS FORM
W-8ECI OR ANY SUCCESSOR THERETO (RELATING TO ALL PAYMENTS TO BE MADE TO SUCH
FOREIGN LENDER BY THE BORROWER PURSUANT TO THIS AGREEMENT) OR SUCH OTHER
EVIDENCE SATISFACTORY TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT SUCH
FOREIGN LENDER IS ENTITLED TO AN EXEMPTION FROM, OR REDUCTION OF, U.S.
WITHHOLDING TAX, INCLUDING ANY EXEMPTION PURSUANT TO SECTION 881(C) OF THE
CODE.  THEREAFTER AND FROM TIME TO TIME, EACH SUCH FOREIGN LENDER SHALL (A)
PROMPTLY SUBMIT TO THE ADMINISTRATIVE AGENT SUCH ADDITIONAL DULY COMPLETED AND
SIGNED COPIES OF ONE OF SUCH FORMS (OR SUCH SUCCESSOR FORMS AS SHALL BE ADOPTED
FROM TIME TO TIME BY THE RELEVANT UNITED STATES TAXING AUTHORITIES) AS MAY THEN
BE AVAILABLE UNDER THEN CURRENT UNITED STATES LAWS AND REGULATIONS TO AVOID, OR
SUCH EVIDENCE AS IS SATISFACTORY TO THE BORROWER AND THE ADMINISTRATIVE AGENT OF
ANY AVAILABLE EXEMPTION FROM OR REDUCTION OF, UNITED STATES WITHHOLDING TAXES IN
RESPECT OF ALL PAYMENTS TO BE MADE TO SUCH FOREIGN LENDER BY THE BORROWER
PURSUANT TO THIS AGREEMENT, (B) PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT OF ANY
CHANGE IN CIRCUMSTANCES WHICH WOULD MODIFY OR RENDER INVALID ANY CLAIMED
EXEMPTION OR REDUCTION, AND (C) TAKE SUCH STEPS AS SHALL NOT BE MATERIALLY
DISADVANTAGEOUS TO IT, IN THE REASONABLE JUDGMENT OF SUCH LENDER, AND AS MAY BE
REASONABLY NECESSARY (INCLUDING THE RE-DESIGNATION OF ITS LENDING OFFICE) TO
AVOID ANY REQUIREMENT OF APPLICABLE LAWS THAT THE BORROWER MAKE ANY DEDUCTION OR
WITHHOLDING FOR TAXES FROM AMOUNTS PAYABLE TO SUCH FOREIGN LENDER.

 

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(ii)           Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or payable
to such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Administrative Agent
on the date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect to
which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or
any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.

 

(iii)          The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 3.01 (A) with respect to any Taxes required
to be deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this Section 10.15(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 10.15(a); provided that if such Lender
shall have satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.15(a) shall
relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.

 

(iv)          The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Borrower is not required to pay
additional amounts under this Section 10.15(a).

 

(b)           Upon the request of the Administrative Agent, each Lender that is
a “United States person” within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9.  If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.

 

(c)           If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any Lender, such
Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs

 

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and expenses (including Attorney Costs) of the Administrative Agent.  The
obligation of the Lenders under this Section shall survive the termination of
the Aggregate Commitments, repayment of all other Obligations hereunder and the
resignation of the Administrative Agent.

 

10.16      REPLACEMENT OF LENDERS; REPLACEMENT OF RATING AGENCY.  UNDER ANY
CIRCUMSTANCES SET FORTH HEREIN PROVIDING THAT THE BORROWER SHALL HAVE THE RIGHT
TO REPLACE A LENDER AS A PARTY TO THIS AGREEMENT, THE BORROWER MAY, UPON NOTICE
TO SUCH LENDER AND THE ADMINISTRATIVE AGENT, REPLACE SUCH LENDER BY CAUSING SUCH
LENDER TO ASSIGN ITS COMMITMENT (WITH THE ASSIGNMENT FEE TO BE PAID BY THE
BORROWER IN SUCH INSTANCE) PURSUANT TO SECTION 10.07(B) TO ONE OR MORE OTHER
LENDERS OR ELIGIBLE ASSIGNEES PROCURED BY THE BORROWER; PROVIDED, HOWEVER, THAT
IF THE BORROWER ELECTS TO EXERCISE SUCH RIGHT WITH RESPECT TO ANY LENDER
PURSUANT TO SECTION 3.06(B), IT SHALL BE OBLIGATED TO REPLACE ALL LENDERS THAT
HAVE MADE SIMILAR REQUESTS FOR COMPENSATION PURSUANT TO SECTION 3.01 OR 3.04. 
THE BORROWER SHALL (X) PAY IN FULL ALL PRINCIPAL, INTEREST, FEES AND OTHER
AMOUNTS OWING TO SUCH LENDER THROUGH THE DATE OF REPLACEMENT (INCLUDING ANY
AMOUNTS PAYABLE PURSUANT TO SECTION 3.05), (Y) PROVIDE APPROPRIATE ASSURANCES
AND INDEMNITIES (WHICH MAY INCLUDE LETTERS OF CREDIT) TO THE L/C ISSUER AS IT
MAY REASONABLY REQUIRE WITH RESPECT TO ANY CONTINUING OBLIGATION TO FUND
PARTICIPATION INTERESTS IN ANY L/C OBLIGATIONS THEN OUTSTANDING, AND (Z) RELEASE
SUCH LENDER FROM ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.  ANY LENDER BEING
REPLACED SHALL EXECUTE AND DELIVER AN ASSIGNMENT AND ASSUMPTION WITH RESPECT TO
SUCH LENDER’S COMMITMENT AND OUTSTANDING LOANS AND PARTICIPATIONS IN L/C
OBLIGATIONS.

 

(b)                   If Debt Rating Downgrade occurs under the proviso
immediately following clause (v) of the definition of Debt Rating Downgrade, the
Administrative Agent and the Borrower shall select a replacement rating agency
for the Rating Agency that has withdrawn its Debt Rating.  Promptly thereafter,
the Administrative Agent shall submit the name of such replacement rating agency
to all Lenders for approval, together with such information regarding such
replacement rating agency as it deems necessary.  Within ten (10) Business Days
of its receipt of notice regarding such replacement rating agency, each Lender
shall notify the Administrative Agent in writing whether or not it approves such
replacement rating agency.  If a Lender does not respond in writing to the
Administrative Agent within such ten-Business Day period, such Lender shall be
deemed to have approved such replacement rating agency.  If such replacement
rating agency is approved by Required Lenders, it shall be the “Replacement
Rating Agency.”

 

10.17      GOVERNING LAW.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS
SITTING IN DALLAS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH
STATE, AND BY EXECUTION AND

 

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DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS.  THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.  THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

 

CHAPTER 346 OF THE TEXAS FINANCE CODE (THE “TEXAS FINANCE CODE”) AS AMENDED
(WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY
ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR TO THE NOTES.

 

10.18      WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

10.19      ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

10.20      RESTATEMENT.THIS AGREEMENT RESTATES AND AMENDS THE EXISTING CREDIT
AGREEMENT IN ITS ENTIRETY, AND ALL OF THE TERMS AND  PROVISIONS HEREOF SHALL
SUPERSEDE THE TERMS AND PROVISIONS THEREOF.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

WESTERN GAS RESOURCES, INC.

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

William J. Krysiak

 

 

Executive Vice President and Chief
Financial Officer

 

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BANK OF AMERICA, N.A.,

 

as Administrative Agent

 

 

 

 

 

By:

/s/ Richard L. Stein

 

 

Name:

Richard L. Stein

 

 

Title:

Principal

 

 

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BANK OF AMERICA, N.A.,

 

 

as a Lender and L/C Issuer

 

 

 

 

 

 

 

 

 

 

By:

/s/ Richard L. Stein

 

 

Name:

Richard L. Stein

 

 

Title:

Principal

 

 

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BANK OF OKLAHOMA, N.A.,  as a Lender

 

 

 

 

 

 

 

By:

/s/ Thomas M. Foncannon

 

 

Name:

Thomas M. Foncannon

 

 

Title:

Senior Vice President

 

 

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BANK ONE, NA, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Tom K. Martin

 

 

Name:

Tom K. Martin

 

 

Title:

Associate Director

 

 

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BNP PARIBAS, as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ J. Onischuk

 

 

Name:

J. Onischuk

 

 

Title:

Director

 

 

 

 

 

 

 

By:

  /s/ Greg Smothers

 

 

Name:

  Greg Smothers

 

 

Title:

  Vice President

 

 

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COMERICA BANK - TEXAS, as a Lender

 

 

 

 

 

 

 

By:

/s/ Thomas G. Rajan

 

 

Name:

Thomas G. Rajan

 

 

Title:

Vice President

 

 

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FLEET NATIONAL BANK, as a Lender

 

 

 

 

 

 

 

By:

/s/ Christopher Holmgren

 

 

Name:

Christopher Holmgren

 

 

Title:

Managing Director

 

 

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THE ROYAL BANK OF SCOTLAND plc, as a Lender

 

 

 

 

 

 

 

By:

/s/ Matthew J. Main

 

 

Name:

Matthew J. Main

 

 

Title:

Senior Vice President

 

 

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UNION BANK OF CALIFORNIA, N.A., as a Lender

 

 

 

 

 

 

 

By:

/s/ Kimberly Coil

 

 

Name:

Kimberly Coil

 

 

Title:

Banking Officer

 

 

 

By:

/s/ Ali Ahmed

 

 

Name:

Ali Ahmed

 

 

Title:

Vice President

 

 

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U.S. BANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

 

By:

/s/ Kathryn A. Gaiter

 

 

Name:

Kathryn A. Gaiter

 

 

Title:

Vice President

 

 

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WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender

 

 

 

 

 

 

 

By:

/s/ Philip Trinder

 

 

Name:

Philip Trinder

 

 

Title:

Vice President

 

 

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WELLS FARGO BANK, N.A., as a Lender

 

 

 

 

 

 

 

By:

/s/ Todd Stornetta

 

 

Name:

Todd Stornetta

 

 

Title:

Vice President

 

 

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