Exhibit 10.3

 

[Execution]

 

INTERCREDITOR AGREEMENT

 

This INTERCREDITOR AGREEMENT (as amended or supplemented from time to time,
herein called this “Agreement”), is entered into as of April 24, 2003, by and
among the BANKS (as defined below), BANK OF AMERICA, N.A., as Administrative
Agent for the Banks (in such capacity, the “Agent”) and as Collateral Agent for
the Lenders (in such capacity, the “Collateral Agent”), and THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA (“PICA”), PRUCO LIFE INSURANCE COMPANY (“Pruco”),
ING LIFE INSURANCE & ANNUITY COMPANY (“ING”), and PRUDENTIAL INVESTMENT
MANAGEMENT, INC. (“Prudential” and, together with PICA, Pruco and ING,
collectively, the “Initial Prudential Noteholders”).

 

W I T N E S S E T H:

 

WHEREAS, WESTERN GAS RESOURCES, INC., a Delaware corporation (herein called the
“Company”), the Banks and the Agent have entered into that certain Credit
Agreement of even date herewith (herein, as from time to time amended,
supplemented or restated, called the “Bank Agreement”) which amends and restates
in its entirety the Loan Agreement dated as of April 29, 1999 among the Company,
the Agent and the lenders named therein;

 

WHEREAS, pursuant to the Bank Agreement, the Banks have agreed to make revolving
loans to the Company and to issue letters of credit for the account of the
Company, and the Company has executed in favor of each Bank a promissory note
(such promissory notes, as from time to time supplemented or amended and all
promissory notes given in renewal and extension thereof are collectively
referred to herein as the “Bank Notes”);

 

WHEREAS, one or more of the Banks or Prudential Affiliates (as defined herein)
may, from time to time, enter into Swap Contracts with the Company or Affiliates
of the Company;

 

WHEREAS, payment of the obligations of the Company to the Banks and the Agent
arising under or in connection with the Bank Agreement and the Swap Contracts
from time to time is guaranteed pursuant to that certain Guaranty of even date
herewith from the Guarantors in favor of Agent and the Banks (herein, as amended
from time to time, collectively called the “Bank Guaranty”) which amends and
restates the Guaranty dated as of April 29, 1999 from each Guarantor in favor of
the Banks and the Agent;

 

WHEREAS, the Company and the Initial Prudential Noteholders have entered into
that certain Third Amended and Restated Master Shelf Agreement dated as of
December 19, 1991 and effective as of January 13, 2003 (herein, as from time to
time amended, supplemented or

 

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restated, called the “Prudential Agreement”), which amended and restated the
Master Shelf Agreement dated as of December 19, 1991 between the Company and
PICA;

 

WHEREAS, the Company has issued and may hereafter issue Senior Notes pursuant to
the Prudential Agreement, in each case evidencing indebtedness of the Company to
the Initial Prudential Noteholders and all subsequent holders of Prudential
Notes;

 

WHEREAS, each Guarantor has heretofore executed and delivered to Prudential its
guaranty (herein, as amended from time to time, collectively called the
“Prudential Guaranties”), guaranteeing payment of obligations of the Company to
Prudential, for itself and on behalf of the Initial Prudential Noteholders under
the Prudential Agreement and all subsequent holders of Prudential Notes under
the Prudential Agreement, arising under or in connection with the Prudential
Notes and the Prudential Agreement and, to the extent any Prudential Affiliate
enters into a Swap Contract, any such Swap Contract (by amendment to the
Prudential Guaranties);

 

WHEREAS, hereafter subsidiaries of the Company may from time to time issue
additional guaranties in favor of the Banks or any of them in connection with
the Bank Agreement, in favor of any Swap Lenders in connection with any Swap
Contracts, or in favor of Prudential in connection with the Prudential Notes and
the Prudential Agreement (any such guaranties herein being called “Additional
Guaranties” and any subsidiaries executing Additional Guaranties herein being
called the “Additional Guarantors”);

 

WHEREAS, the Company has executed and delivered to the Agent for the benefit of
the Banks that certain Pledge Agreement of even date herewith (as from time to
time supplemented, amended or restated, the “Company Pledge Agreement”), which
amends and restates in its entirety the Pledge Agreement dated as of April 29,
1999, pursuant to which the Company has granted to the Agent a security interest
in all of its ownership interests in certain of its subsidiaries;

 

WHEREAS, MIGC has executed and delivered to the Agent for the benefit of the
Banks that certain Stock Pledge Agreement of even date herewith (as from time to
time supplemented, amended or restated, the “Subsidiary Pledge Agreement”),
which amends and restates the Stock Pledge Agreement dated as of April 29, 1999,
pursuant to which MIGC has granted to the Agent a security interest in all of
its ownership interests in MGTC;

 

WHEREAS, the Company has executed and delivered to Prudential that certain
Pledge Agreement dated as of April 29, 1999, pursuant to which the Company has
granted to Prudential, for itself and on behalf of the Initial Prudential
Noteholders under the Prudential Agreement and all subsequent holders of the
Prudential Notes under the Prudential Agreement, a security interest in all of
its ownership interests in certain of its subsidiaries, and MIGC has executed
and delivered to Prudential that certain Pledge Agreement dated as of April 29,
1999, pursuant to which MIGC has granted to Prudential, for itself and on behalf
of the Initial Prudential Noteholders under the Prudential Agreement and all
subsequent holders of the Prudential Notes under the Prudential Agreement, a
security interest in all of its ownership interests in MGTC

 

INTERCREDITOR AGREEMENT

 

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(such Pledge Agreements as from time to time amended, supplemented or restated
herein being collectively called the “Prudential Pledge Agreements”);

 

WHEREAS, subsidiaries of the Company may from time to time create additional
pledge agreements in favor of the Banks or any of them in connection with the
Bank Agreement, in favor of any Swap Lenders in connection with any Swap
Contracts, or in favor of the holders of the Prudential Notes in connection with
the Prudential Agreement (any such pledge agreements herein being called the
“Additional Pledge Agreements” and any subsidiaries executing such Additional
Pledge Agreement herein being collectively called the “Additional Pledgors”);

 

WHEREAS, the Bank Agreement and the Prudential Agreement each require that upon
the occurrence of certain events, the Company and its subsidiaries shall execute
and deliver to the Collateral Agent deeds of trust and mortgages securing the
Obligations and covering certain of their oil and gas properties of the Company
and its subsidiaries (all deeds of trust and mortgages  hereafter delivered to
the Collateral Agent for the benefit of the Lenders by the Company and/or any of
its subsidiaries, as from time to time supplemented amended or restated, are
herein being called the “Mortgages”);

 

WHEREAS, the Agent, the Collateral Agent, Prudential, and the Banks have entered
into that certain Intercreditor Agreement dated as of as of April 26, 2001 (as
amended and supplemented to the date hereof, the “Existing Intercreditor
Agreement”) to evidence their agreement with respect to certain payments that
may be received by the Lenders under or in connection with the Subject
Guaranties and the Pledge Agreements; and

 

WHEREAS, the Lenders desire to amend and restate the Existing Intercreditor
Agreement as provided herein;

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Lenders hereby agree that the Existing Intercreditor
Agreement is hereby amended and restated to read in its entirety as follows:

 

1.             Definitions.  As used herein the following definitions shall have
the meanings set forth below:

 

“Acceleration Event” means (i) the failure by the Company to pay in full the
outstanding principal balance of and any accrued and unpaid interest on any Note
on the final maturity date of such Note; (ii) the acceleration of the
outstanding principal balance of and any accrued and unpaid interest on, any
Note by any Lender or by any person or entity acting on behalf of any Lender; or
(iii) any of the Debtor Parties (A) suffers the entry against it of a judgment,
decree or order or relief by a court of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy, insolvency or other
similar law of any jurisdiction now or hereafter in effect, including the
federal Bankruptcy Code, as from time to time amended, or has any such
proceeding commenced against it which remains undismissed for a period of sixty
days; (B) commences a voluntary case under any applicable bankruptcy, insolvency
or similar law now or hereafter in effect, including the federal Bankruptcy
Code, as from time to time amended; or

 

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applies for or consents to the entry of an order for relief in an involuntary
case under any such law; or makes a general assignment for the benefit of
creditors; or fails generally to pay (or admits in writing its inability to pay)
its debts as such debts become due; or takes corporate or other action to
authorize any of the foregoing; or (C) suffers the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of all or a substantial part of its assets in a proceeding
brought against or initiated by it, and such appointment or taking possession is
neither made ineffective nor discharged within thirty days after the making
thereof, or such appointment or taking possession is at any time consented to,
requested by, or acquiesced to by it.

 

“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.

 

“Agent” has the meaning assigned to such term in the preamble of this Agreement.

 

“Additional Guaranties” has the meaning assigned to such term in the preamble of
this Agreement.

 

“Additional Guarantors” has the meaning assigned to such term in the preamble of
this Agreement.

 

“Additional Pledge Agreements” has the meaning assigned to such term in the
preamble of this Agreement.

 

“Additional Pledgors” has the meaning assigned to such term in the preamble of
this Agreement.

 

“Banks” means the “Lenders” as such term is defined in the Bank Agreement.

 

“Bank Agreement” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Bank Agreement Obligations” means all “Obligations” as defined in the Bank
Agreement, as from time to time supplemented, amended or restated (including,
without limitation, default interest, interest accruing at the then applicable
rate provided in the Bank Agreement after the maturity of the Bank Notes and
interest accruing at the then applicable rate provided in the Bank Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to any of the

 

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Debtor Parties, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, that
arise under, out of, or in connection with, the Bank Agreement, any Bank Notes
or any other document made, delivered or given in connection therewith, whether
on account of principal, interest, premium, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements of
counsel to the Agent and the Banks that are required to be paid by any of the
Debtor Parties pursuant to the terms of this Agreement, the Bank Agreement, any
Bank Notes or any other document made, delivered or given in connection
therewith).

 

“Bank Guaranty” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Bank Notes” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Bank Pledge Agreements” means the Company Pledge Agreement and the Subsidiary
Pledge Agreement.

 

“Calculation Date” has the meaning assigned to such term in Section 2 of this
Agreement.

 

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

 

“Collateral Agent” means Bank of America, N.A., in its capacity as Collateral
Agent under and subject to the terms and conditions of this Agreement.

 

“Collateral Agent-Related Persons” means the Collateral Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.

 

“Company” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Company Pledge Agreement” has the meaning assigned to such term in the preamble
of this Agreement

 

“Credit Agreements” means the Bank Agreement, the Swap Contracts, and the
Prudential Agreement.

 

“Debtor Parties” means the Company, MIGC, any Guarantor, any Additional
Guarantor, any Additional Pledgor and any Mortgagor.

 

“Debt Rating Downgrade” shall have the meaning given to such term in the Bank
Agreement.

 

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“Determination Date” has the meaning assigned to such term in Section 3 of this
Agreement

 

“Existing Intercreditor Agreement” has the meaning assigned to such term in the
preamble of this Agreement.

 

“Finance Documents” means this Agreement, the Credit Agreements, the Security
Documents and all other documents and instruments under, by reason of which, or
pursuant to which any or all of the indebtedness and obligations arising under
or pursuant to the Credit Agreements are evidenced, governed, secured,
guarantied, or otherwise dealt with, and all other agreements, certificates, and
other documents, instruments and writings heretofore or hereafter delivered in
connection herewith or therewith.

 

“Guarantors” means Mountain Gas Resources, Inc., a Delaware corporation, Western
Gas Resources-Texas, Inc., a Texas corporation, MGTC, Inc., a Wyoming
corporation (“MGTC”), MIGC, Inc., a Delaware corporation (“MIGC”), Lance Oil &
Gas Company, Inc., a Delaware corporation, and Western Gas Wyoming, L.L.C., a
Wyoming limited liability company.

 

“Indebtedness” means, with respect to any Calculation Date or Determination
Date, the aggregate outstanding principal amount of indebtedness of the Company
under the Bank Agreement, the Bank Notes, the Prudential Agreement, and the
Prudential Notes on such date.

 

“Indemnified Liabilities” means any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs, expenses
and disbursements (including reasonable attorney’s costs and expenses) of any
kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any Collateral Agent-Related Person in any way relating to or
arising out of or in connection with (a) the execution, delivery, enforcement,
performance or administration of this Agreement or any Security Document, (b)
the use or proposed use of the proceeds of any Collateral, or (c) 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).

 

“Initial Prudential Noteholders” has the meaning assigned to such term in the
preamble of this Agreement.

 

“Lenders” means the Banks, the Agent, the Initial Prudential Noteholders and the
other holders from time to time of the Prudential Notes.

 

“Majority Lenders” means two or more Lenders, including at least one holder of a
Bank Note and one holder of a Prudential Note, whose Proportionate Shares equal
or exceed sixty-six and two-thirds percent (66 2/3%).

 

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“Make-Whole Amount” means with respect to the holders of the Prudential Notes,
the “Yield Maintenance Amount” as defined in the Prudential Agreement except
that (for purposes of this Agreement only) the “Reinvestment Yield”, which is
defined in the Prudential Agreement and used in computing such Yield Maintenance
Amount, shall be the rate of 1.32% per annum with respect to the 7.99% Notes,
1.35% per annum with respect to the 6.77% Notes, 1.40% per annum with respect to
the 7.23% Notes, 1.45% per annum with respect to the 9.24% Notes, 1.55% per
annum with respect to the 7.61% Notes and 3.45% per annum with respect to the
6.36% Notes above the Reinvestment Yield, as it would otherwise be calculated
under the Prudential Agreement, and with respect to additional Prudential Notes
issued under the Prudential Agreement, the initial spread over comparable
average life U.S. treasuries at time of commitment to purchase such Prudential
Notes above the Reinvestment Yield, as it would otherwise be calculated under
the Prudential Agreement.

 

“Mortgages” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Notes” means the Bank Notes and the Prudential Notes.

 

“Obligations” means (i) the Bank Agreement Obligations, (ii) the Swap Agreement
Obligations and (iii) the Prudential Agreement Obligations.

 

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

 

“PICA” has the meaning assigned to such term in the preamble of this Agreement.

 

“Pledge Agreements” means the Bank Pledge Agreements, the Prudential Pledge
Agreements, and all Additional Pledge Agreements.

 

“Proportionate Share” means a fraction (i) the numerator of which is the sum of
the

Indebtedness owing to such Lender plus the Swap Amount and/or Make-Whole Amount
owing to such Lender and (ii) the denominator of which is the sum of the
Indebtedness owing to all Lenders plus the Swap Amount and/or Make-Whole Amount
owing to all Lenders;

 

“Pruco” has the meaning assigned to such term in the preamble of this Agreement.

 

“Prudential” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Prudential Affiliate” means (i) any corporation or other entity controlling,
controlled by, or under common control with, Prudential either directly or
through subsidiaries and (ii) any managed account or investment fund which is
managed by Prudential or a Prudential Affiliate described in clause (i) of this
definition.  For purposes of this definition, the terms “control”, “controlling”
and “controlled” shall mean the ownership, directly or through subsidiaries, of
a majority of a corporation’s or other entity’s Voting Stock or equivalent
voting securities or interests.

 

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“Prudential Agreement” has the meaning assigned to such term in the preamble of
this Agreement.

 

“Prudential Agreement Obligations” means the unpaid principal of, interest on
and “Yield Maintenance Amount” as defined in the Prudential Agreement, if any,
on the Prudential Notes and all other obligations and liabilities of any of the
Debtor Parties to the holders from time to time of the Prudential Notes
(including, without limitation, interest accruing at the then applicable rate
provided in the Prudential Agreement, as from time to time supplemented, amended
or restated, or the Prudential Notes, as applicable, after the maturity thereof
and interest accruing at the then applicable rate provided in the Prudential
Agreement or the Prudential Notes, as applicable, after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to any of the Debtor Parties, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Prudential Agreement, any Prudential Notes or any other document made,
delivered or given in connection therewith, whether on account of principal,
interest, Make-Whole Amount, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to any
holder(s) of the Prudential Notes that are required to be paid by the Debtor
Parties pursuant to the terms of this Agreement, the Prudential Agreement, the
Prudential Notes or any other document made, delivered or given in connection
therewith).

 

“Prudential Guaranties” has the meaning assigned to such term in the preamble of
this Agreement.

 

“Prudential Notes” means the 7.61% Senior Notes due July 28, 2007 (the “7.61%
Notes”), the 6.77% Senior Notes due September 22, 2003 (the “6.77% Notes”), the
7.99% Senior Notes due October 27, 2003 (the “7.99% Notes”), the 9.24% Senior
Notes due October 27, 2004 (the “9.24% Notes”), the 6.36% Senior Notes, Series
H, due January 17, 2008 (the “6.36% Notes”), the 7.23% Senior Notes due December
27, 2003 (the “7.23% Notes”), and any additional Senior Notes issued pursuant to
the Prudential Agreement or in replacement thereof.

 

“Prudential Pledge Agreements” has the meaning assigned to such term in the
preamble of this Agreement.

 

“Subject Guaranties” means the Bank Guaranty, the Prudential Guaranties and the
Additional Guaranties.

 

“Subject Guaranty Excess Amount” has the meaning assigned to such term in
Section 2 of this Agreement.

 

“Subsidiary Pledge Agreement” has the meaning assigned to such term in the
preamble of this Agreement

 

“Security Documents” means the Pledge Agreements and the Mortgages.

 

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“Security Document Excess Amount” has the meaning assigned to such term in
Section 3 of this Agreement.

 

“Swap Agreement Obligations” means any amounts that, at the time in question,
are due and payable to any Swap Lender under any Swap Contract.

 

“Swap Amount” means with respect to each Swap Lender on each Calculation Date
and on each Determination Date, the Swap Termination Value under all Swap
Contracts which would be due and owing thereunder to such Swap Lender on such
Calculation Date or Determination Date if any such Swap Contract were terminated
on such date whether or not such Swap Amount is actually due and owing on such
date.

 

“Swap Lender” means with respect to any Calculation Date or any Determination
Date, each Lender that is a party to a Swap Contract with the Company or an
Affiliate of the Company on such date.

 

“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), 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).

 

“Voting Stock” means, with respect to any corporation, any shares of stock of
such corporation whose holders are entitled under ordinary circumstances to vote
for the election of directors of such corporation (irrespective of whether at
the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).

 

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2.             Subject Guaranties.  If, after the occurrence and during the
continuance of a “Default” or “Event of Default” under any Credit Agreement (as
“Default” or “Event of Default” is defined in each Credit Agreement) any Lender
shall at any time obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) from any Guarantor pursuant
to a Subject Guaranty (each date on which a Lender receives any such payment or
recovery is herein called a “Calculation Date”) in excess of its Proportionate
Share calculated as of such date of payments or other recoveries then or
therewith obtained by all Lenders with respect to the Subject Guaranties, such
Lender shall purchase from the other Lenders such participation(s) in the
Indebtedness (and interest thereon) of the Company held by such other Lenders
that is guaranteed pursuant to such other Lenders’ Subject Guaranty or Subject
Guaranties, as shall be necessary to cause such purchasing Lender to share such
payment or other recovery ratably with such selling Lenders; provided, however,
that if all or any portion of such payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded, and each
selling Lender shall repay to the purchasing Lender the purchase price, to the
ratable extent of such recovery, together with an amount equal to such selling
Lender’s ratable share (according to the proportion of (x) the amount of such
selling Lender’s required repayment to the purchasing Lender to (y) 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.  Notwithstanding the foregoing, if a Swap Amount is not due and owing
on a Calculation Date or does not actually become due and owing within 30 days
of such Calculation Date, and as a result of the inclusion of the Swap Amount in
calculating a Swap Lender’s Proportionate Share, such Swap Lender receives a
greater portion of any payment or other recovery from any Guarantor than it
would have if the Swap Amount had not been included in such calculation (such
amount is herein called a “Subject Guaranty Excess Amount”), then such Swap
Lender shall immediately purchase from each other Lender such participation(s)
in the Indebtedness (and interest thereon) of the Company held by such other
Lender that is guaranteed pursuant to such other Lender’s Subject Guaranty or
Subject Guaranties in an amount equal to such other Lender’s Proportionate Share
as of such Calculation Date (after being recalculated to exclude the Swap
Amount) of the Subject Guaranty Excess Amount plus such other Lender’s
Proportionate Share of any interest earned by the Swap Lender on such Subject
Guaranty Excess Amount.

 

3.             Security Documents.  If any Lender shall at any time obtain any
payment or other recovery (whether voluntary, involuntary, or otherwise) under a
Security Document (each date on which a Lender receives any such payment or
recovery is herein called a “Determination Date”) in excess of its Proportionate
Share calculated as of such date of payments or other recoveries then or
therewith obtained by all Lenders under a Security Document, such Lender shall
purchase from the other Lenders such participation(s) in the Indebtedness (and
interest thereon) of the Company held by such other Lenders that is secured by
the Security Documents, as shall be necessary to cause such purchasing Lender to
share such payment or other recovery ratably with such selling Lenders;
provided, however, that if all or any portion of such payment or other recovery
is thereafter recovered from such purchasing Lender, the purchase shall be
rescinded, and each selling Lender shall repay to the purchasing Lender the
purchase price, to the ratable extent of such recovery, together with an amount
equal to such selling Lender’s ratable share

 

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(according to the proportion of (x) the amount of such selling Lender’s required
repayment to the purchasing Lender to (y) 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.  Notwithstanding
the foregoing, if a Swap Amount is not due and owing on a Determination Date or
does not actually become due and owing within 30 days of such Determination
Date, and as a result of the inclusion of the Swap Amount in calculating a Swap
Lender’s Proportionate Share, such Swap Lender receives a greater portion of any
payment or other recovery with respect to the Collateral under any Security
Documents than it would have if the Swap Amount had not been included in such
calculation (such amount is herein called a “Security Document Excess Amount”),
then such Swap Lender shall immediately purchase from each other Lender such
participation(s) in the Indebtedness (and interest thereon) of the Company held
by such other Lender that is secured under such other Lender’s Security Document
in an amount equal to such other Lender’s Proportionate Share as of such
Determination Date (after being recalculated to exclude the Swap Amount) of the
Security Document Excess Amount plus such other Lender’s Proportionate Share of
any interest earned by the Swap Lender on such Security Document Excess Amount.

 

4.             Consent and Agreement.  Each of the Company and each Guarantor,
by signing the Consent and Agreement attached hereto, agrees that each Lender so
purchasing a participation from another Lender pursuant to Section 2 or 3 hereof
may, to the fullest extent permitted by law, exercise all its rights of payment
(including rights of setoff) with respect to such participation as fully as if
such Lender were the direct creditor of the Company and such Guarantor in the
amount of such participation.  By its execution of the Consent and Agreement,
the Company hereby agrees that it shall cause each Additional Guarantor, each
Additional Pledgor and each Mortgagor to execute and deliver to Lenders a
Consent and Agreement substantially in the form attached hereto concurrently
with the delivery of its respective Additional Guaranty, Additional Pledge
Agreement or Mortgage, as applicable.

 

5.             Bankruptcy Claims.  If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which Section 3 hereof applies, such Lender shall exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the other Lenders in accordance with Section 3 hereof.

 

6.             Perfection and Priority.  All security interests of the Lenders
in the Collateral shall be pari passu regardless of the order of filing of any
financing statements with respect thereto or the taking of any other action
relevant to the determination of the perfection or priority of such security
interests.  Except for the filings to be made by the Agent on behalf of the
Banks, each Lender shall be responsible for the preparation and filing of its
respective financing statement covering the Collateral.  The Lenders hereby
direct the Agent to receive and maintain physical possession, of all
certificates (the “Certificates”) evidencing the Collateral.  The Agent will
hold the Certificates to perfect each Lender’s security interest in the
Collateral.  The Agent will hold the Certificates in its capacity as collateral
agent for the Lenders.

 

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7.             Collateral Agent Appointment, Powers, and Immunities.

 

(a)           Each Lender hereby irrevocably appoints and authorizes Bank of
America, N.A. to act as Collateral Agent under the Security Documents on the
terms and conditions set forth in this Agreement and authorizes the Collateral
Agent to execute and/or accept from Debtor Parties the Mortgages substantially
in the form of Exhibit A hereto and any other Security Documents (including,
without limitation, the Bank Pledge Agreements and any Additional Pledge
Agreements), as applicable, in the name of and for the benefit of the Lenders,
and Bank of America, N.A., hereby accepts such appointment and shall have all of
the rights and obligations of the Collateral Agent hereunder and under the
Security Documents.

 

(b)           Each Lender hereby authorizes Collateral Agent to do the following
in accordance with the terms of this Agreement and the Security Documents:

 

(i)            to receive all documents and items to be furnished from time to
time to Collateral Agent or any Lender under the Security Documents;

 

(ii)           to distribute to the Lenders information, requests, documents,
and other items received from the Company and other Persons under the Security
Documents;

 

(iii)          to execute and deliver to the Company and other Persons requests,
demands, notices, approvals, consents, waivers, and other communications
received from Lenders in connection with the Security Documents and herewith
subject to the terms and conditions set forth therein and herein;

 

(iv)          to receive on behalf of each of the Lenders any payment of monies
paid to Collateral Agent in accordance with this Agreement and the Security
Documents, and to distribute to each Lender in accordance with the terms of this
Agreement such Lender’s share of all payments so received based upon such
Lender’s Proportionate Share;

 

(v)           to act on behalf of Lenders at the direction of any Lender to
maintain the perfection and priority of the Liens created under the Security
Documents;

 

(vi)          subject to the terms and conditions of the Security Documents and
this Agreement, to exercise on behalf of each Lender all remedies of Lenders
under the Security Documents upon the occurrence of any Acceleration Event; and

 

(vii)         subject to the terms and conditions of the Security Documents and
this Agreement, to take such other actions as may be directed by Majority
Lenders as are reasonably incident to any powers granted to Collateral Agent
hereunder, including but not limited to any action described in Sections 8 and
9(a) hereof.

 

(c)           Each Lender hereby acknowledges and agrees that (i) as set forth
in Section 6.19 of the Credit Agreement, no Mortgage will be delivered to
Collateral Agent by the Debtor Parties at the time the Bank Agreement is
executed and delivered and (ii) the execution, delivery and recording of any
Mortgage delivered to Collateral Agent is subject to Section 6.19 of the Bank
Agreement.

 

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8.             Enforcement Against Collateral; Application of Proceeds from
Collateral.

 

(a)           Prior to the occurrence of an Acceleration Event, no Lender shall
exercise any remedy or other right available to it with respect to any
Collateral.  Concurrently with the occurrence of any event described in either
clause (i) or (ii) of the definition of Acceleration Event, the Lender whose
Note has matured and has not been paid at maturity or so accelerating its Note,
as the case may be, shall give written notice of such Acceleration Event to the
Agent, in its capacity as Collateral Agent, and each other Lender.

 

(b)           The Lenders agree among themselves and for their own benefit alone
that the liens and security interests granted and provided for in the Security
Documents shall not be enforced against any of the Collateral except at the
direction of the Majority Lenders upon the occurrence of one or more
Acceleration Events and in compliance with the provisions hereof. Each Lender
agrees that, as long as any Indebtedness exists or may become outstanding
pursuant to the terms of the Finance Documents, the provisions of this Agreement
shall provide the exclusive method by which any Lender may exercise rights and
remedies under the Security Documents.

 

(c)           Upon the occurrence of any Acceleration Event and the Collateral
Agent’s actual knowledge of or receipt of a notice of Acceleration Event, the
Collateral Agent, at the direction of the Majority Lenders, shall seek to
realize upon the security interests and liens granted to the Collateral Agent
and/or any Lenders under the Security Documents in such manner as shall be
directed by the Majority Lenders. Whether before or after any Acceleration
Event, subject to the terms and conditions hereof, the Collateral Agent shall
(except to the limited extent provided in the last sentence of Section 9(e)) act
only on the directions of the Majority Lenders with respect to the preservation,
protection, collection or realization upon any Collateral.  Notwithstanding the
foregoing, in the event that the Collateral Agent deems (in its reasonable
discretion) that the provisions of this Agreement are not adequate to protect
the Collateral Agent against the liabilities associated with any of the actions
described above, then the Collateral Agent may refuse to take such action until
such time as the Lenders have granted to Collateral Agent additional security or
indemnifications satisfactory to Collateral Agent in its reasonable discretion
to protect it against such liabilities.

 

(d)           Whenever Collateral Agent applies any cash proceeds received by
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral, the same shall be applied in
the following order:

 

(i)            To the repayment of all costs and expenses, including reasonable
attorneys’ fees and legal expenses, incurred by Collateral Agent in connection
with (1) the administration of the Security Documents, (2) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any Collateral, (3) the exercise or enforcement of any of the
rights of Collateral Agent hereunder or under the Security Documents, or (4) the
failure of the Company or any Affiliate of the Company to perform or observe any
of the provisions of the Security Documents and to any Indemnified Liabilities
and reimbursements due Collateral Agent under Section 9(g);

 

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(ii)           To the payment or other satisfaction of any Liens, encumbrances,
or adverse claims upon or against any of the Collateral that are prior to those
of the Collateral Agent or which Collateral Agent is otherwise required to pay
under applicable law;

 

(iii)          To the reimbursement of Collateral Agent for the amount of any
obligations of the Company or any Affiliate of the Company that are prior to
those of the Collateral Agent or which Collateral Agent is otherwise required to
pay under applicable law and are paid or discharged by Collateral Agent (other
than amounts for principal and interest under the Notes) pursuant to the
provisions hereof or of the Security Documents, and of any expenses of
Collateral Agent payable by the Company or any Affiliate of the Company
hereunder or thereunder;

 

(iv)          To the satisfaction the Obligations of the Lenders, to each Lender
in accordance with such Lender’s Proportionate Share;

 

(v)           To the payment or prepayment of any other Obligations of a Lender
not included in subsection (iv) above, which payment shall be made ratably to
each Lender in accordance with its pro rata share of such Obligations;

 

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

 

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

 

The provisions of this Section 8(d) are intended solely to establish the manner
and amount of distribution of proceeds as among the Lenders.  The provisions of
this Agreement are not intended, as among the Banks, to modify or amend the
manner of application of funds as set forth in the Bank Agreement and related
documents or to modify or amend the manner of application of funds as set forth
in the Prudential Agreement and related documents.  Any amounts distributable
hereunder to a Lender shall be applied in accordance with the priorities set
forth in the applicable Finance Documents, regardless of how such payments are
characterized or the order of priority under this Section 8(d).

 

(e)           Whenever Collateral Agent in good faith determines that it is
uncertain about how to distribute to Lenders any funds which it has received, or
whenever Collateral Agent in good faith determines that there is any dispute
among Lenders about how such funds should be distributed, Collateral Agent may
choose to defer distribution of the funds which are the subject of such
uncertainty or dispute.  If Collateral Agent in good faith believes that the
uncertainty or dispute will not be promptly resolved, or if Collateral Agent is
otherwise required to invest funds pending distribution to Lenders, Collateral
Agent shall invest such funds pending distribution; all interest on any such
investment shall be distributed upon the distribution of such investment and in
the same proportion and to the same Persons as such investment.  All moneys
received by

 

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Collateral Agent for distribution to Lenders shall be held by Collateral Agent
pending such distribution solely as Collateral Agent for such Lenders, and
Collateral Agent shall have no equitable title to any portion thereof except in
its separate capacity as a Lender.

 

9.             Provisions Concerning Collateral Agent.

 

(a)           Duties as Collateral Agent.  Notwithstanding any provision to the
contrary contained elsewhere herein or in any other Finance Document, the
Collateral Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Collateral 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 Finance Document or otherwise exist
against the Collateral Agent.  Without limiting the generality of the foregoing
sentence, the use of the term Aagent@ herein with reference to the Collateral
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.  The Lenders irrevocably authorize the Collateral Agent, at its option
and in its discretion, to release any lien on or security interest in any
Collateral (i) if the property subject to such lien or security interest is
permitted to be sold or otherwise transferred pursuant to both the Bank
Agreement and the Prudential Agreement or such lien is otherwise permitted to be
released pursuant to such Credit Agreements and (ii) upon termination of and
payment in full of all Obligations (other than contingent indemnification
obligations, including but not limited to obligations of the Debtor Parties
under the Swap Agreements that are not yet due).

 

(b)           Delegation of Duties.  The Collateral Agent may execute any of its
duties under this Agreement or any Security 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 Collateral 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.

 

(c)           Liability of Collateral Agent.  No Collateral 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 Security Document or the
transactions contemplated hereby and thereby including but not limited to those
arising from its own negligence (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 the Company, any of the Company’s
Affiliates or any officer thereof, contained herein or in any other Security
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Collateral Agent under or in connection
with, this Agreement or any Security Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any Security
Document, or for any failure of the Company or any of its Affiliates to perform
its obligations hereunder or thereunder.  No Collateral Agent-Related Person
shall be under any obligation to

 

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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 Security Document, or to inspect the properties, books or
records of the Company or any of its Affiliates.

 

(d)           Reliance by Collateral Agent.  The Collateral 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 reasonably
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 the Company or any of its Affiliates), independent
accountants and other experts selected by the Collateral Agent.  The Collateral
Agent shall be fully justified in failing or refusing to take any action under
any Security Document unless it shall first receive such advice or concurrence
of the Majority 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 Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any Security Document in accordance with a request or consent of the Majority
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.

 

(e)           Notice of Default.  The Collateral Agent shall not be deemed to
have knowledge or notice of the occurrence of any Acceleration Event or any
“Default” or “Event of Default” under any Credit Agreement or Security Document
(as “Default” or “Event of Default” is defined in each Credit Agreement and
Security Document), except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Collateral Agent, acting in its
capacity as “Administrative Agent” under the Bank Agreement, as for the account
of the Banks, or unless the Collateral Agent shall have received written notice
from a Lender or the Company, describing such “Default” or “Event of Default”
and stating that such notice is a Anotice of default.@  The Collateral Agent
will notify the Lenders of its receipt of any such notice.  The Collateral Agent
shall take such action with respect to the Collateral after any such “Default”
or “Event of Default” as may be directed by the Majority Lenders in accordance
with the terms hereof.  Unless and until the Collateral Agent has received any
such direction, the Collateral Agent shall not be obligated to take such action
with respect to such “Default” or “Event of Default”.  Furthermore, the
Collateral Agent may (but shall not be obligated to) take action hereunder to
the extent necessary to maintain insurance on the Collateral or otherwise
protect the Collateral from damage or destruction.

 

(f)            Credit Decision; Disclosure of Information by Collateral Agent. 
Each Lender acknowledges that no Collateral Agent-Related Person has made any
representation or warranty to it, and that no act by the Collateral Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of the Company or any of its Affiliates, shall be deemed
to constitute any representation or warranty by any Collateral Agent-Related
Person to any Lender as to any matter, including whether Collateral
Agent-Related Persons have disclosed material information in their possession. 
Each Lender represents to the Collateral

 

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Agent that it has, independently and without reliance upon any Collateral
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 Company and its Affiliates, and all applicable bank or
other regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into the Finance Documents and this Agreement and to
extend credit to the Company under its Credit Agreement.  Each Lender also
represents that it will, independently and without reliance upon any Collateral
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 Finance 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 Company.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Collateral Agent herein (or required to be furnished to the Banks
by the Agent, in its capacity as “Administrative Agent” under the Bank
Agreement), the Collateral 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 Company or its Affiliates which may come into the
possession of any Collateral Agent-Related Person.

 

(g)           Indemnification of Collateral Agent.  The Lenders shall indemnify
upon demand each Collateral Agent-Related Person (to the extent not reimbursed
by or on behalf of the Company or any of its Affiliates and without limiting the
obligation of the Company or any of its Affiliates to do so), to the extent of
each Lender’s Proportionate Share, and hold harmless each Collateral
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it, including but not limited to those arising from its own
negligence;  provided, however, that no Lender shall be liable for the payment
to any Collateral 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 Collateral
Agent-Related Person’s own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Majority
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 Collateral Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including reasonable attorney’s fees and
expenses) incurred by the Collateral 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 or any
Security Document to the extent that the Collateral Agent is not reimbursed for
such expenses by or on behalf of the Company.  The undertaking in this Section
shall survive termination of the Indebtedness.  Notwithstanding anything herein
to the contrary, the parties hereto agree that the obligations of each holder of
a Prudential Note to Collateral Agent under this Section 9(g) shall be limited
to the amount of the proceeds of the Collateral it receives hereunder, under the
Security Documents or from any other source that is attributable to the
Collateral.

 

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(h)           Collateral Agent in its Individual Capacity.  Bank of America,
N.A. (“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 the Company and its Affiliates as though Bank of America
were not the Collateral Agent 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 the Company or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Affiliate) and acknowledge that the
Collateral Agent shall be under no obligation to provide such information to
them.  With respect to the Collateral, Bank of America shall have the same
rights and powers under this Agreement and the Security Documents as any other
Lender and may exercise such rights and powers as though it were not the
Collateral Agent, and the terms ALender@ and ALenders@ include Bank of America
in its individual capacity.

 

(i)            Successor Collateral Agent.  The Collateral Agent may resign as
Collateral Agent upon not less than 60 days’ notice to the Lenders, with such
resignation to take effect upon the acceptance by a successor Collateral Agent
of its appointment as the Collateral Agent hereunder.  In addition, the Majority
Lenders may remove the Collateral Agent by giving written notice thereof to the
Collateral Agent at least 30 days’ prior to the effective date of such removal.
Upon any such resignation or removal, the Majority Lenders shall have the right
to appoint a successor Collateral Agent.  If no successor Collateral Agent shall
have been so appointed and shall have accepted such appointment in writing
within 30 days after the retiring Collateral Agent’s giving of notice of
resignation or its removal, then the retiring Collateral Agent may, on behalf of
the Lenders, appoint a successor Collateral Agent which meets the eligibility
requirements of Section 9(k), and the Debtor Parties agree to pay such
reasonable fees and expenses of any such appointee as shall be necessary to
induce such appointee to agree to become a successor Collateral Agent hereunder.
Upon acceptance of appointment as Collateral Agent, such successor shall
thereupon and forthwith succeed to and become vested with all the rights, powers
and privileges, immunities and duties of the retiring Collateral Agent, the term
“Collateral Agent” shall mean such successor Collateral Agent, and the retiring
Collateral Agent, upon the transferring and setting over to such successor
Collateral Agent all rights, moneys and other collateral held by it in its
capacity as Collateral Agent, shall be discharged from its duties and
obligations hereunder.  After any retiring Collateral Agent’s resignation or
removal hereunder as Collateral Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Collateral Agent under this Agreement.

 

(j)            Succession of Successor Collateral Agent.  Any successor
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
the Debtor Parties, the Banks, the holders of the Prudential Notes and the
predecessor Collateral Agent an instrument accepting such appointment, and
thereupon such successor Collateral Agent, without any further act, deed,
conveyance or transfer, shall become vested with the title to the Collateral,
and with all the rights, powers, duties and obligations of the predecessor
Collateral Agent in the trust hereunder, with like effect as if originally named
as Collateral Agent herein.  Upon the request of any such successor Collateral
Agent, the Debtor Parties and the predecessor Collateral Agent shall promptly
execute and deliver such instruments of conveyance and further assurance
reflecting

 

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terms consistent with the terms of the Finance Documents then in effect and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in such successor Collateral Agent its interest in the
Collateral and all such rights, powers, duties and obligations of the
predecessor Collateral Agent hereunder, and the predecessor Collateral Agent
shall also promptly assign and deliver to the successor Collateral Agent any
Collateral subject to the lien and security interest of this Agreement which may
then be in its possession.

 

(k)           Eligibility of Designated Replacement Collateral Agent.  Any
successor Collateral Agent appointed by a retiring Collateral Agent pursuant to
Section 9(i) shall be a state or national bank or trust company in good
standing, organized under the laws of the United States of America or of any
state, having a capital, surplus and undivided profits aggregating at least
$500,000,000 and whose certificates of deposit have a Satisfactory Rating, if
there be such a bank or trust company willing and able to accept the duties
hereunder upon reasonable and customary terms.  As used in this Section 9(k),
the term “Satisfactory Rating” means, with respect to any Person, that such
Person and its bank deposits or other short term credit obligations have both a
short-term bank deposit rating of Prime-2 or better from Moody’s Investors
Service, Inc. and a short term credit obligation rating of A-3 or better from
Standard and Poor’s, a division of The McGraw-Hill Companies.

 

(l)            Successor Collateral Agent by Merger.  Any corporation into which
the Collateral Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Collateral
Agent shall be a party, or any state or national bank or trust company in any
manner succeeding to the corporate trust business of the Collateral Agent as a
whole or substantially as a whole shall be the successor of the Collateral Agent
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything to the contrary contained herein
notwithstanding.

 

10.           Unconditional Agreement.  This Agreement shall in all respects be
a continuing, absolute, unconditional and irrevocable agreement, and shall
remain in full force and effect until the payment in full of all Obligations
(other than contingent obligations, including but not limited to obligations of
the Debtor Parties under Swap Agreements which are not yet due) satisfied in
full, all obligations of all Lenders to the other Lenders hereunder shall have
been satisfied in full and all Security Documents have been terminated.  Each
Lender agrees that this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the obligations of the Company, any of the Guarantors or any of the
Additional Guarantors is rescinded or must otherwise be restored by any Lender,
upon the insolvency, bankruptcy or reorganization of the Company, any of the
Guarantors or any of the Additional Guarantors or otherwise, as though such
payment had not been made.

 

11.           Representations and Warranties of Bank.  In order to induce the
Initial Prudential Noteholders to enter into this Agreement, each of the Banks
and the Agent severally represent and warrant to the Initial Prudential
Noteholders that it has full corporate power, and has taken all action
necessary, to execute and deliver this Agreement and to fulfill its respective
obligations hereunder, and that no governmental or other authorizations are
required in connection herewith, and that this Agreement constitutes its legal,
valid and binding obligation, enforceable in

 

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accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium, regulatory and similar laws of general application
and by general principles of equity.

 

12.           Representations and Warranties of the Initial Prudential
Noteholders.  In order to induce the Banks and the Agent to enter into this
Agreement, each Initial Prudential Noteholder represents and warrants to the
Banks and the Agent that it has full corporate power, and has taken all action
necessary, to execute and deliver this Agreement and to fulfill its obligations
hereunder, and that no governmental or other authorizations are required in
connection herewith, and that this Agreement constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium, regulatory and similar
laws of general application and by general principles of equity.

 

13.           Successors and Assigns.  This Agreement shall be binding upon, and
inure to the benefit of and be enforceable by, the Lenders and each of their
respective successors, transferees and assigns.  Without limiting the generality
of the foregoing sentence, any Lender may assign or otherwise transfer (in whole
or in part) to any other person or entity the obligations of the Debtor Parties
to such Lender (with respect to the Banks, subject to the provisions of the Bank
Agreement and with respect to the holders of the Prudential Notes, subject to
the Prudential Agreement), and such other person or entity shall thereupon
become vested with all rights and benefits, and become subject to all the
obligations, in respect thereof granted to or imposed upon such Lender under
this Agreement, subject, however, to any contrary provisions in such assignment
or transfer (with respect to the Banks, subject to the provisions of the Bank
Agreement and with respect to the holders of the Prudential Notes, subject to
the Prudential Agreement).

 

14.           Benefit of Agreement.  None of the provisions of this Agreement
shall inure to the benefit of any of the Debtor Parties or any other Person
other than the Lenders; consequently, neither the Debtor Parties nor any other
persons shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the provisions of this Agreement or the failure of any Lender to
comply with such provisions.

 

15.           Amendments and Waivers.  No amendment to or waiver of any
provision of this Agreement, nor consent to any departure by any Lender
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Majority Lenders, 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 without the consent of each Lender, no such
amendment, waiver or consent shall: (a) amend this Section 15, (b) amend the
definition of Proportionate Share or (c) change Sections 2, 3, 6 or 8 in a
manner that would alter the pari passu treatment of the security interests of
the Lenders, the order of priority or the pro rata sharing of payments required
thereby.

 

16.           Notices.  All notices and other communications provided to any
Lender under this Agreement shall be in writing or by facsimile and addressed,
delivered or transmitted to such Lender at its address or facsimile number set
forth (a) on Annex 1 hereto, or (b) at such other

 

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address or facsimile number as may be designated by such Lender in a notice to
the other Lenders.  Any notice, if mailed and properly addressed with postage
prepaid or if properly addressed and sent by prepaid courier service, shall be
deemed given received; any notice, if transmitted by facsimile, shall be deemed
given when transmitted if actually received, and the burden of proving receipt
shall be on the transmitting Lender.

 

17.           Remedies Cumulative.  No failure or delay on the part of any
Lender in exercising any power or right under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof of the exercise of any
other power or right.  The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

18.           Integration.  Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

19.          NO ORAL AGREEMENTS.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.  THIS
AGREEMENT CONSTITUTES THE ENTIRE UNDERSTANDING BETWEEN THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.

 

20.          JURY TRIAL.  EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF ANY LENDER IN CONNECTION HEREWITH.  EACH LENDER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
OTHER LENDERS ENTERING INTO THIS AGREEMENT.

 

21.           Restatement.  This Agreement amends and restates in its entirety
the Existing Intercreditor Agreement.

 

22.           Counterparts.  This Agreement may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Agreement.  This Agreement may be duly executed by facsimile or other electronic
transmission.

 

21

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

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

By:

/s/ Richard L. Stein

 

 

 

Name: Richard L. Stein

 

 

Title: Principal

 

22

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BANK OF OKLAHOMA, N.A.

 

 

 

 

 

By:

/s/ Thomas M. Foncannon

 

 

 

Name: Thomas M. Foncannon

 

 

Title: Senior Vice President

 

23

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BANK ONE, NA

 

 

 

 

 

By:

/s/ Tom K. Martin

 

 

 

Name: Tom K. Martin

 

 

Title: Associate Director

 

24

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BNP PARIBAS

 

 

 

 

 

By:

/s/ J. Ornischuk

 

 

 

Name: J. Ornischuk

 

 

Title: Director

 

 

 

 

 

By:

/s/ Greg Smothers

 

 

 

Name: Greg Smothers

 

 

Title: Vice President

 

25

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COMERICA BANK - TEXAS

 

 

 

 

 

By:

/s/ Thomas G. Rajan

 

 

 

Name: Thomas G. Rajan

 

 

Title: Vice President

 

26

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FLEET NATIONAL BANK

 

 

 

 

 

By:

/s/ Christopher Holmgren

 

 

 

Name: Christopher Holmgren

 

 

Title: Managing Director

 

27

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THE ROYAL BANK OF SCOTLAND plc

 

 

 

 

 

By:

/s/ Matthew J. Main

 

 

 

Name: Matthew J. Main

 

 

Title: Senior Vice President

 

28

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UNION BANK OF CALIFORNIA, N.A.

 

 

 

 

 

By:

/s/ Kimberly Coil

 

 

 

Name: Kimberley Coil

 

 

Title: Banking Officer

 

 

 

 

 

By:

/s/ Ali Ahmed

 

 

 

Name: Ali Ahmed

 

 

Title: Vice President

 

29

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U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Kathryn A. Gaiter

 

 

 

Name: Kathryn A. Gaiter

 

 

Title: Vice President

 

30

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WACHOVIA BANK, NATIONAL
ASSOCIATION

 

 

 

 

 

By:

/s/ Philip Trinder

 

 

 

Name: Philip Trinder

 

 

Title: Vice President

 

31

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WELLS FARGO BANK, N.A.

 

 

 

 

 

By:

/s/ Todd Stornetta

 

 

 

Name: Todd Stornetta

 

 

Title: Vice President

 

32

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THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA

 

 

 

 

 

By:

/s/ Ric E. Abel

 

 

 

Ric E. Abel

 

 

Vice President

 

 

 

 

 

PRUCO LIFE INSURANCE COMPANY

 

 

 

 

 

By:

/s/ Ric E. Abel

 

 

 

Ric E. Abel

 

 

Vice President

 

 

 

 

 

PRUDENTIAL INVESTMENT
MANAGEMENT, INC.

 

 

 

 

 

By:

/s/ Ric E. Abel

 

 

 

Ric E. Abel

 

 

Vice President

 

 

 

 

 

ING LIFE INSURANCE & ANNUITY
COMPANY

 

 

 

 

 

By:

Prudential Private Placement Investors, L.P.
(as Investment Advisor)

 

 

 

 

By:

Prudential Private Placement Investors,
Inc., General Partner

 

 

 

 

 

By:

/s/ Ric E. Abel

 

 

 

 

Ric E. Abel

 

 

 

Vice President

 

33

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CONSENT AND AGREEMENT

 

Each of the undersigned hereby consents to Section 4, Section 7(a), Section 9(i)
and Section 9(j) of the foregoing Agreement as of the date first written above.

 

 

 

WESTERN GAS RESOURCES, INC.

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

William J. Krysiak

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

 

 

 

 

MIGC, INC.

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

William J. Krysiak

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

 

 

 

MGTC, INC.

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

William J. Krysiak

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

 

 

WESTERN GAS RESOURCES-TEXAS, INC.

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

William J. Krysiak

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

34

--------------------------------------------------------------------------------

 

 

MOUNTAIN GAS RESOURCES, INC.

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

William J. Krysiak

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

 

 

 

 

LANCE OIL & GAS COMPANY, INC.

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

William J. Krysiak

 

 

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

 

 

 

WESTERN GAS WYOMING, L.L.C.

 

 

 

By:

WESTERN GAS RESOURCES, INC., its
sole member

 

 

 

 

 

 

 

 

By:

/s/ William J. Krysiak

 

 

 

 

William J. Krysiak

 

 

 

Executive Vice President and

 

 

 

Chief Financial Officer

 

35

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Annex 1

 

ADDRESSES FOR NOTICE

 

Bank of America, N.A.

901 Main Street

Dallas, TX  75201

Attn:

Ramon Presas

Tel:

214.209.2642

Fax:

214.290.8364

 

 

with a copy to:

Bank of America, N.A.

700 Louisiana, 8th Floor

TX4-213-08-14

Houston, TX  77002

Attn:

Richard Stein

Tel:

713.247.7258

Fax:

713.247.7286

 

 

Bank of Oklahoma, N.A.

1625 Broadway, Suite 1570

Denver, CO  80202

Attn:

Thomas M. Foncannon

Tel:

303.534.9461

Fax:

303.534.9499

 

 

with a copy to:

Bank of Oklahoma, N.A.

1625 Broadway, Suite 1570

Denver, CO  80202

Attn:

Mary Anne Anderson

Tel:

303.534.9465

Fax:

303.534.9499

 

 

Bank One, NA

1 Bank One Plaza

IL21-0634

Chicago, IL  60670

Attn:

Brenda De Los Reyes

Tel:

312.732.2594

Fax:

312.732.4840

 

--------------------------------------------------------------------------------

 

with a copy to:

Bank One, NA

1717 Main Street, 4th Floor

Dallas, TX  75201

Attn:

Thomas K. Martin

Tel:

214.290.2301

Fax:

214.290.2332

 

 

BNP Paribas

1220 Smith Street, Suite 3100

Houston, TX  77002

Attn:

Joe Onischuk

Tel:

713.982.1161

Fax:

713.659.6915

 

 

Comerica Bank - Texas

1601 Elm Street

2nd Floor, MC 6593

Dallas, TX  75201

Attn:

Thomas G. Rajan

Tel:

214.969.6565

Fax:

214.969.6561

 

 

Fleet National Bank

Mail Stop:  MA DE 10008A

100 Federal Street

Boston, MA  02110

Attn:

David Lundberg

Tel:

617.434.8516

Fax:

617.434.3652

 

 

The Royal Bank of Scotland plc

600 Travis Street, Suite 6070

Houston, TX  77002

Attn:

Keith Johnson

Tel:

713.221.2437

Fax:

713.221.2430

 

 

Union Bank of California, Inc.

500 N. Akard, Suite 4200

Dallas, TX  75201

Attn:

Kimberly Coil

Tel:

214.922.4200

Fax:

214.922.4209

 

2

--------------------------------------------------------------------------------

 

with a copy to:

Union Bank of California, Inc.

601 Potrero Grande Dr., 1st Floor

Monterey Park, CA  91754

Attn:

An Cheng

Tel:

323.720.7837

Fax:

323.278.6173

 

U.S. Bank National Association

918 17TH Street, DNCOBB3E

Denver, CO  80202

Attn:

Kathryn A. Gaiter

Tel:

303.585.4210

Fax:

303.585.4362

 

Wachovia Bank, National Association

1001 Fannin Street, Suite 255

Houston, TX  77002

Attn:

Philip Trinder

Tel:

713.346.2718

Fax:

713.650.6354

 

Wells Fargo Bank, N.A.

1740 Broadway

Denver, CO  80274

Attn:

Todd Stornetta

Tel:

303.863.5653

Fax:

303.863.5196

 

The Prudential Insurance Company of America

Pruco Life Insurance Company

Prudential Investment Management, Inc.

2200 Ross Avenue, Suite 4200E

Dallas, TX  75201

Attn:

Ric Abel

Tel:

214.720.6202

Fax:

214.720.6299

 

ING Life Insurance & Annuity Company

c/o Prudential Private Placement Investors, L.P.

4 Gateway Center, 100 Mulberry Street

Newark, NJ 07102

Attn:

Albert Trank

Tel:

973.802.8608

Fax:

973.624.6432

 

3

--------------------------------------------------------------------------------

 

Prudential Investment Management, Inc.

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4200E

Dallas, TX 75201

Attn:

Ric Abel

Tel:

214.720.6202

Fax:

214.720.6299

 

4

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EXHIBIT A

 

FORM OF MORTGAGE

 

5

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