Exhibit 10.2
 
TERM LOAN AGREEMENT
Dated as of August 2, 2010
among
WESTERN GAS PARTNERS, LP,
as the Borrower,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
DNB NOR BANK ASA, NEW YORK BRANCH,
as Syndication Agent,
U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agent
and
THE LENDERS SIGNATORY HERETO
 
WELLS FARGO SECURITIES, LLC
DNB NOR MARKETS, INC.
Co-Lead Arrangers and Bookrunners
 

 

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

 

TABLE OF CONTENTS

              Page
ARTICLE I
       
DEFINITIONS AND ACCOUNTING TERMS
       
 
       
Section 1.01 Defined Terms
    1  
Section 1.02 Use of Defined Terms
    14  
Section 1.03 Accounting Terms
    14  
Section 1.04 Interpretation
    14  
 
       
ARTICLE II
       
AMOUNT AND TERMS OF LOANS
       
 
       
Section 2.01 Loans
    14  
Section 2.02 Repayment of Loans; Evidence of Debt
    15  
Section 2.03 Procedure for Borrowing
    16  
Section 2.04 Reserved
    16  
Section 2.05 Reserved
    16  
Section 2.06 Reserved
    16  
Section 2.07 Optional Prepayments
    16  
Section 2.08 Reserved
    16  
Section 2.09 Reserved
    16  
Section 2.10 Interest
    17  
Section 2.11 Computation of Interest
    18  
Section 2.12 Funding of Borrowings
    19  
Section 2.13 Pro Rata Treatment and Payments
    19  
Section 2.14 Increased Cost of Loans
    21  
Section 2.15 Illegality
    23  
Section 2.16 Taxes
    23  
Section 2.17 Substitute Loan Basis
    25  
Section 2.18 Certain Conversions or Continuations
    26  
Section 2.19 Certain Notices
    26  
Section 2.20 Minimum Amounts of Eurodollar Borrowings
    26  
Section 2.21 Break Funding Payments
    26  
 
       
ARTICLE III
       
REPRESENTATIONS AND WARRANTIES
       
 
       
Section 3.01 Representations of the Borrower
    27  
 
       
ARTICLE IV
       
AFFIRMATIVE COVENANTS
       
 
       
Section 4.01 Financial Statements and Other Information
    29  
Section 4.02 Notices of Material Events
    30  
Section 4.03 Compliance with Laws
    31  
Section 4.04 Use of Proceeds
    31  

i

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

 

              Page
Section 4.05 Maintenance of Property; Insurance
    31  
Section 4.06 Additional Guarantors
    31  
Section 4.07 Books and Records; Inspections
    32  
Section 4.08 Payment of Obligations
    32  
Section 4.09 Material Contracts
    32  
 
       
ARTICLE V
       
FINANCIAL COVENANTS
       
 
       
Section 5.01 Consolidated Leverage Ratio
    32  
Section 5.02 Consolidated Interest Coverage Ratio
    32  
 
       
ARTICLE VI
       
NEGATIVE COVENANTS
       
 
       
Section 6.01 Nature of Business
    33  
Section 6.02 Liens
    33  
Section 6.03 Dispositions
    35  
Section 6.04 Transactions with Affiliates
    35  
Section 6.05 Indebtedness
    36  
Section 6.06 Investments
    37  
Section 6.07 Restricted Payments
    38  
Section 6.08 Intercompany Payments
    39  
Section 6.09 Limitations on Sales and Leasebacks
    39  
Section 6.10 Fundamental Changes
    39  
Section 6.11 Negative Pledge Agreements
    40  
 
       
ARTICLE VII
       
CONDITIONS OF LENDING
       
 
       
Section 7.01 Conditions Precedent to the Loans
    40  
Section 7.02 Additional Conditions Precedent to the Loans
    42  
 
       
ARTICLE VIII
       
EVENTS OF DEFAULT
       
 
       
Section 8.01 Events of Default
    42  
 
       
ARTICLE IX
       
THE AGENTS
       
 
       
Section 9.01 Powers
    44  
Section 9.02 Agent’s Reliance, Etc.
    44  
Section 9.03 No Responsibility for Recitals, Etc.
    44  
Section 9.04 Right to Indemnity
    44  
Section 9.05 Action on Instructions of Lenders
    45  
Section 9.06 Employment of Agents
    45  
Section 9.07 Reliance on Documents
    45  
Section 9.08 Rights as a Lender
    45  
Section 9.09 Non-Reliance on Agents or other Lenders
    45  
Section 9.10 Events of Default
    46  

ii

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

 

              Page
Section 9.11 Successor Agent
    46  
Section 9.12 Arrangers and Other Agents
    46  
 
       
ARTICLE X
       
MISCELLANEOUS
       
 
       
Section 10.01 Notices
    46  
Section 10.02 Waivers; Amendments
    47  
Section 10.03 Expenses; Indemnity; Damage Waiver
    48  
Section 10.04 Successors and Assigns
    49  
Section 10.05 Survival
    52  
Section 10.06 Counterparts; Integration; Effectiveness
    52  
Section 10.07 Severability
    52  
Section 10.08 Right of Setoff
    52  
Section 10.09 Governing Law; Jurisdiction; Consent to Service of Process
    53  
Section 10.10 WAIVER OF JURY TRIAL
    53  
Section 10.11 Headings
    54  
Section 10.12 Confidentiality
    54  
Section 10.13 Termination and Substitution of Lender
    54  
Section 10.14 USA Patriot Act Notice
    55  

Annexes, Schedules and Exhibits:

     
Annex I
  (List of Commitments)
 
   
Schedule I
  (Pricing Schedule)
Schedule II
  (Subsidiaries)
Schedule III
  (Transactions with Affiliates)
 
   
Exhibit A
  (Form of Note)
Exhibit B
  (Assignment and Assumption)
Exhibit C
  (Form of Guaranty Agreement)

iii

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

 

     This TERM LOAN AGREEMENT is made as of August 2, 2010 (the “Effective
Date”), by and among WESTERN GAS PARTNERS, LP, a limited partnership organized
under the laws of the State of Delaware (the “Borrower”), WELLS FARGO BANK,
NATIONAL ASSOCIATION, individually and as Administrative Agent (herein, together
with its successors in such capacity, the “Administrative Agent”), DNB NOR BANK
ASA, NEW YORK BRANCH, as Syndication Agent (herein, together with its successors
in such capacity, the “Syndication Agent”), U.S. BANK NATIONAL ASSOCIATION, as
Documentation Agent (herein, together with its successors in such capacity, the
“Documentation Agent”), and each of the Lenders that is a signatory hereto or
which becomes a signatory hereto pursuant to Section 10.04 (individually,
together with its successors and assigns, a “Lender” and collectively, the
“Lenders”).
     In consideration of the mutual covenants and agreements contained herein,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
     Section 1.01 Defined Terms. As used in this Agreement, and unless the
context otherwise requires, the following terms shall have the meanings set out
respectively after each:
     “Acquired Indebtedness” — (i) with respect to any Person that becomes a
Subsidiary after the Effective Date as the result of a Permitted Acquisition,
Indebtedness of such Person and its Subsidiaries (including, for the avoidance
of doubt, Indebtedness incurred in the ordinary course of such Person’s business
to acquire assets used or useful in its business) existing at the time such
Person becomes a Subsidiary that was not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary and (ii) with respect to the
Borrower or any Subsidiary, any Indebtedness of a Person (including, for the
avoidance of doubt, Indebtedness incurred in the ordinary course of such
Person’s business to acquire assets used or useful in its business), other than
the Borrower or a Subsidiary, existing at the time such Person is merged with or
into the Borrower or a Subsidiary, or Indebtedness expressly assumed by the
Borrower or any Subsidiary in connection with the acquisition of an asset or
assets from such Person, which Indebtedness was not, in any case, incurred by
such other Person in connection with, or in contemplation of, such merger or
acquisition.
     “Acquisition” — the acquisition by any Person, in a single transaction or
in a series of related transactions, of property or assets (other than capital
expenditures in the ordinary course of business) of, or of a business unit or
division of, another Person or, except as permitted by Section 6.06(d), at least
a majority of the securities having ordinary voting power for the election of
directors, managing general partners or the equivalent of another Person, in
each case whether or not involving a merger or consolidation with such other
Person and whether for cash, property, services, assumption of Indebtedness,
securities or otherwise.
     “Administrative Agent” — as defined in the preamble hereof.
     “Administrative Questionnaire” — an Administrative Questionnaire in a form
supplied by the Administrative Agent.

1

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

 

     “Affected Loans” — as defined in Section 2.18.
     “Affiliate” — 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.
     “Agents” — each of the Administrative Agent, the Syndication Agent and the
Documentation Agent.
     “Agreement” — this Term Loan Agreement, as the same may be amended,
modified, supplemented or restated from time to time in accordance with the
terms hereof.
     “Alternate Base Rate” —for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%, and (c) the LIBO Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
the LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate,
respectively.
     “Alternate Base Rate Loans” — Loans hereunder at all times when they bear
interest at a rate based upon the Alternate Base Rate.
     “Anadarko” — Anadarko Petroleum Corporation, a Delaware corporation.
     “APC Revolver” — the $1,300,000,000 Revolving Credit Agreement dated
March 4, 2008, among Anadarko, the Borrower, JPMorgan Chase Bank, N.A., as
administrative agent, and the lenders party thereto, as amended or replaced from
time to time.
     “Applicable Percentage” — with respect to any Lender, such Lender’s
percentage of outstanding Loans.
     “Assignment and Assumption” — an assignment and assumption entered into by
a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit B or any other form approved by the Administrative Agent.
     “Available Cash” — the meaning ascribed to such term in the Partnership
Agreement as in effect on the Effective Date, with such amendments thereto as
agreed to by the Majority Lenders.
     “Bankruptcy Laws” — Title 11 of the United States Code entitled
“Bankruptcy”, as amended from time to time and any similar other applicable law
or statute in any other jurisdiction as amended from time to time.
     “Base Rate Margin” — a rate per annum determined in accordance with the
Pricing Schedule.

2

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

 

     “Board” — the Board of Governors of the Federal Reserve System.
     “Board of Directors” — with respect to a Person, the board of directors or
other governing body of such Person.
     “Borrower” — Western Gas Partners, LP, a Delaware limited partnership or
permitted successor and assigns under Section 10.04.
     “Borrowing” — Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
     “Borrowing Request” — the request by the Borrower for the Borrowing of the
term Loans in accordance with Section 2.03.
     “Business Day” — any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City, New York are authorized or required by
law to remain closed; provided that when used in connection with a Eurodollar
Loan, the term “Business Day” shall also exclude any day on which banks are not
open for dealings in Dollar deposits in the London interbank market.
     “Capital Lease” — as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in accordance
with GAAP, is required to be accounted for as a capital lease on the balance
sheet of that Person.
     “Cash Equivalents” — as at any date, (a) securities guaranteed or insured
by the United States or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition,
(b) Dollar denominated time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having capital
and surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody’s is at least P-1 or the equivalent thereof (any such bank being an
“Approved Bank”), in each case with maturities of not more than 270 days from
the date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody’s and maturing within six months of the date of acquisition,
(d) repurchase agreements entered into by any Person with a bank or trust
company (including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States in which such Person shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least 100% of
the amount of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940 which are administered by
reputable financial institutions having capital of at least $500,000,000 or
having portfolio assets of at least $5,000,000,000 and the portfolios of which
are comprised primarily of Investments of the character described in the
foregoing subdivisions (a) through (d).

3

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

 

     “Change of Control” — (a) Anadarko shall cease to own, directly or
indirectly, 51% of the voting ownership interest of the General Partner, or
(b) the General Partner shall cease to either be or control the sole general
partner of the Borrower.
     “Chipeta” — Chipeta Processing LLC.
     “Code” — the Internal Revenue Code of 1986, as amended from time to time.
     “Commission” — the Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, or, if at any
time after the execution of this Agreement such Commission is not existing and
performing the duties now assigned to it, then the body performing such duties
at such time.
     “Commitment” — with respect to each Lender, the commitment of such Lender
to make a single term Loan to the Borrower pursuant to Section 2.01 in the
amount set forth on Annex I.
     “Consolidated EBITDA” — for any period, an amount equal to Consolidated Net
Income for such period plus, to the extent deducted in determining Consolidated
Net Income for such period, the aggregate amount of (a) taxes based on or
measured by income, (b) Consolidated Interest Expense and (c) depreciation and
amortization expenses.
     “Consolidated Indebtedness” — at any time, the Indebtedness of the Borrower
and its Subsidiaries, determined on a consolidated basis as of such time in
accordance with GAAP.
     “Consolidated Interest Coverage Ratio” — as of the last day of each fiscal
quarter of the Borrower, the ratio of (a) Consolidated EBITDA for the period of
four consecutive fiscal quarters ending on such day to (b) Consolidated Interest
Expense for the period of four consecutive fiscal quarters ending on such day.
     “Consolidated Interest Expense” — for any period, the sum (determined
without duplication) of the aggregate gross interest expense (excluding, for the
avoidance of doubt, any interest income) of the Borrower and its Subsidiaries
for such period, including to the extent included in interest expense under
GAAP: (a) amortization of debt discount and (b) capitalized interest.
     “Consolidated Leverage Ratio” — as of the last day of each fiscal quarter
of the Borrower, the ratio of (a) Consolidated Indebtedness on such day to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters
ending on such day.
     “Consolidated Net Income” — for any period, the net income of the Borrower
and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP; provided, that: (A) Consolidated Net Income shall not
include (i) extraordinary gains or extraordinary losses, (ii) net gains and
losses in respect of disposition of assets other than in the ordinary course of
business, (iii) gains or losses attributable to write-ups or write-downs of
assets including unrealized gains or losses with respect to hedging and
derivative activities, (iv) gains or losses attributable to any Joint Venture
unless such gains are actually distributed to the Borrower or its Subsidiaries
in cash and (v) the cumulative effect of a change in accounting principles, all
as reported in the Borrower’s consolidated statement(s) of income for the
relevant

4

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

 

period(s) prepared in accordance with GAAP; and (B) if the Borrower or any
Subsidiary shall acquire or dispose of any property during such period, then
Consolidated Net Income shall be calculated after giving pro forma effect to
such acquisition or disposition, as if such acquisition or disposition had
occurred on the first day of such period.
     “Consolidated Net Tangible Assets” — as of any date of determination, the
total amount of assets of the Borrower and its Subsidiaries determined on a
consolidated basis after deducting therefrom the value (net of any applicable
reserves) of all current liabilities (excluding (i) any current liabilities that
by their terms are extendable or renewable at the option of the obligor thereon
to a time more than 12 months after the time as of which the amount thereof is
being computed, and (ii) current maturities of long-term debt), goodwill, trade
names, trademarks, patents and other like intangible net assets, all as set
forth, or on a pro forma basis would be set forth, on the consolidated balance
sheet of the Borrower and its Subsidiaries for the most recently completed
fiscal quarter, in accordance with GAAP.
     “Control” — 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.
     “Default” — an event which with the giving of notice or the passage of
time, or both, would constitute an Event of Default.
     “Defaulting Lender” — any Lender that shall (a) (i) fail to make the Loan
required to be made by it hereunder or (ii) state in writing that it will not
make, or that it has disaffirmed or repudiated its obligation to make, the Loan
required to be made by it hereunder, unless, in either case, such failure to
make such Loan by a Lender is the subject of a good faith dispute, or (b) assign
or transfer all or a part of its rights hereunder without the prior written
consent of the Borrower, unless such assignment or transfer is made without the
consent of the Borrower pursuant to Section 10.04(b)(i)(A).
     “Disposition” or “Dispose” — the sale, transfer, license, lease or other
disposition (including any Sale and Leaseback Transaction) of any property by
the Borrower or any Subsidiary (including the equity interests of any
Subsidiary), 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.
     “Documentation Agent” — as defined in the preamble hereof.
     “Domestic Lending Office” — initially, the office of a Lender designated as
such in its Administrative Questionnaire, and thereafter such other office of
such Lender, if any, of which such Lender shall have most recently notified the
Administrative Agent and the Borrower in writing.
     “Effective Date” — as defined in the preamble.
     “Environmental Laws” — to the extent relating to exposure to hazardous or
toxic substances or materials, any applicable and legally enforceable
requirement of any Governmental

5

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

 

Authority pertaining to (a) the protection of human health, safety, and the
indoor or outdoor environment, (b) the conservation, management, or use of
natural resources and wildlife, (c) the protection or use of surface water and
groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure to, any
hazardous or toxic substance or material or (e) pollution (including any release
to land surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC
9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42 USC
6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1977, 33 USC 1251 et seq., Clean Air Act, as amended, 42 USC 7401 et
seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous
Materials Transportation Law, 49 USC App. 1501 et seq., Occupational Safety and
Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990,
33 USC 2701 et seq., Emergency Planning and Community Right to Know Act of 1986,
42 USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et
seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.
     “Equity Interests” — shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.
     “ERISA” — the Employee Retirement Income Security Act of 1974, as amended
from time to time.
     “ERISA Affiliate” — any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
     “ERISA Event” — (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived), (b) the withdrawal of the
Borrower, a Subsidiary or any ERISA Affiliate from a Plan during a plan year in
which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA,
(c) the failure of a Plan to meet the minimum funding standards under Section
412 of the Code or Section 302 of ERISA (determined without regard to Section
412(c) of the Code or Section 302(c) of ERISA), (d) the incurrence by the
Borrower, any Subsidiary or any of ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Plan, (e) the receipt by the
Borrower, a Subsidiary or any ERISA Affiliate from the Pension Benefit Guaranty
Corporation or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan,
(f) the incurrence by the Borrower, a Subsidiary or any ERISA Affiliate of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan, (g) the failure of a Plan to satisfy the requirements of
Section 401(a)(29) of the Code, Section 436 of the Code or

6

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

 

Section 206(g) of ERISA, or (h) the receipt by the Borrower, a Subsidiary or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower, a Subsidiary or any ERISA Affiliate of any notice, concerning the
imposition of withdrawal liability under Section 4202 of ERISA, or a
determination that a Multiemployer Plan is, or is expected to be, “insolvent,”
in “reorganization,” in “endangered status,” or in “critical status” (within the
meaning assigned to such terms under ERISA).
     “Eurodollar Lending Office” — initially, the office of a Lender designated
as such in its Administrative Questionnaire, and thereafter such other office of
such Lender, if any, of which such Lender shall have most recently notified the
Administrative Agent and the Borrower in writing.
     “Eurodollar Loan” — a Loan denominated in Dollars that bears interest at a
rate based upon the LIBO Rate.
     “Eurodollar Margin” — a rate per annum determined in accordance with the
Pricing Schedule.
     “Event of Default” — any of the events of default set forth in ARTICLE
VIII.
     “Excluded Taxes” — with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) the net income or “taxable margin” (within the meaning of the Texas
Franchise Tax) of such Administrative Agent, Lender or other recipient by the
United States or any political subdivision thereof, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States, or any
similar tax imposed by any other jurisdiction in which the Borrower is located,
(c) in the case of a Foreign Lender, any withholding tax that is imposed in
respect of amounts payable by the Borrower by the United States of America or by
any other jurisdiction in which such Lender is organized, has its principal
office or its applicable lending office on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender’s
failure to comply with Section 2.16(e) except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.16(e),
(d) in the case of a Lender other than a Foreign Lender, any backup withholding
that is imposed in respect of amounts payable by the Borrower by the United
States of America that is attributable to such Lender’s failure to comply with
Section 2.16(e), and (e) any U.S. Federal withholding taxes imposed by FATCA
other than by reason of a change in law imposed after the date hereof.
     “FATCA” — means the Foreign Account Tax Compliance Act of 2009,
Sections 1471 through 1474 of the Code and any regulations or official
interpretations thereof.
     “Federal Funds Effective Rate” — for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight US
Federal funds

7

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

 

transactions with members of the US Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
     “Financial Officer” — the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower or any other officer or
employee that any of the foregoing may, in accordance with the Borrower’s
customary business practices, designate to act as a Financial Officer by notice
to the Administrative Agent in accordance with this Agreement.
     “Fitch” — Fitch, Inc., and any successor thereto that is a nationally
recognized rating agency.
     “Foreign Lender” — any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
     “GAAP” — generally accepted accounting principles in the United States of
America, as in effect from time to time.
     “General Partner” — Western Gas Holdings, LLC, a Delaware limited liability
company.
     “Governmental Authority” — the government of the United States, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
     “Guarantor” — each of the Subsidiaries of the Borrower listed on
Schedule II other than Chipeta, and (b) each other Subsidiary of the Borrower
that is not a Joint Venture and that guarantees the Loans pursuant to
Section 4.06.
     “Guaranty Agreement” – the Guaranty Agreement dated as of even date
herewith by the Guarantors, in favor of the Administrative Agent for the benefit
of the Lenders.
     “Indebtedness” — any indebtedness which (a) is for money borrowed,
(b) represents the deferred purchase price of property or assets purchased,
except trade accounts payable in the ordinary course of business, (c) is in
respect of a capitalized lease or (d) is in respect of a guarantee of any of the
foregoing obligations of another Person.
     “Indemnitee” — has the meaning specified in Section 10.03(b).
     “Indemnified Taxes” — Taxes other than Excluded Taxes.

8

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

 

     “Information” — as defined in Section 10.12.
     “Information Memorandum” — the Confidential Information Memorandum dated
June 28, 2010 relating to the Borrower and the Transactions.
     “Intercompany Loan” — the intercompany loan from Anadarko to the Borrower
dated December 19, 2008 in an aggregate amount not exceeding $175,000,000.
     “Interest Election Request” — as defined in Section 2.10(c).
     “Interest Payment Date” — (a) as to any Alternate Base Rate Loan (except as
provided in Section 2.18), the end of any calendar quarter with respect thereto
and, as to any Lender, the Maturity Date for such Lender, and (b) as to any
Eurodollar Loan, the last day of the Interest Period with respect thereto, and,
for Interest Periods longer than 3 months, each date which is 3 months, or a
whole multiple thereof, from the first day of such Interest Period.
     “Interest Period” — with respect to any Eurodollar Loan, (i) initially, the
period commencing on the Effective Date or continuation date, as the case may
be, with respect to such Eurodollar Loan and ending 2 weeks or 1, 2, 3, 6 or, to
the extent funds are available, as determined by the Administrative Agent, 9 or
12 months thereafter, as selected by the Borrower in its Borrowing Request or
Interest Election Request, as the case may be, given with respect thereto, and
(ii) thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending 2 weeks or 1, 2,
3, 6 or, to the extent funds are available, as determined by the Administrative
Agent, 9 or 12 months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than two Business Days prior to the
last day of the then current Interest Period with respect thereto; provided,
that (A) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
and (B) any Interest Period (other than a 2 week Interest Period) that commences
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period.
     “Investment” — with respect to any Person, (a) any purchase or other
acquisition by such Person of (i) any Equity Interest issued by, (ii) a
beneficial interest in any Equity Interest issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a significant part of the assets of a business conducted by another Person,
(c) any loan, advance (other than deposits with financial institutions available
for withdrawal on demand, prepaid expenses, accounts receivable and similar
items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness of any other Person to that Person arising from a
sale of property by that Person other than in the ordinary course of its
business, and (d) any guaranty obligation incurred by that Person in respect of
Indebtedness of any other Person.

9

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

 

     “Investment Grade Rating” — the rating of the Loans or senior unsecured
non-credit enhanced publicly held debt of the Borrower, by at least two of the
three rating agencies as follows: BBB- or better by S&P or Baa3 or better by
Moody’s or BBB- or better by Fitch.
     “Investment Grade Rating Date” — the date on which the Borrower achieves an
Investment Grade Rating.
     “Joint Venture” — any Person, other than an individual, the Borrower or a
wholly-owned Subsidiary of the Borrower, in which the Borrower or a Subsidiary
of the Borrower holds or acquires an Equity Interest (whether by way of capital
stock, partnership or limited liability company interest, or other evidence of
ownership) excluding warrants, options or unexercised right to acquire or
purchase an Equity Interest.
     “Lender” — as defined in the preamble hereof.
     “LIBO Rate” — with respect to any Eurodollar Borrowing for any Interest
Period, the rate reported by Bloomberg L.P. in its index of rates (or any
successor to or substitute for such index, providing rate quotations comparable
to those currently provided on such page of such index, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to US Dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for US Dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which US
Dollar deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
     “Lien” — any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any conditional sale or
other title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in the
nature thereof).
     “Loan” — the term Loan made by each Lender to the Borrower pursuant to
Section 2.01(a) of this Agreement, and, as the context may require, each
Alternate Base Rate Loan and Eurodollar Loan comprising such Lender’s term Loan.
“Loans” shall mean the term Loans made by the Lenders to the Borrower pursuant
to Section 2.01(a) of this Agreement and, as the context may require, the
Alternate Base Rate Loans and Eurodollar Loans comprising each Lender’s term
Loan as provided in Section 2.01(c) of this Agreement.
     “Loan Document(s)” — this Agreement, the Guaranty Agreement, any Notes and
each and every other agreement executed in connection with this Agreement.
     “Majority Lenders” — at any time, Lenders holding more than 50.0% of the
then aggregate outstanding principal amount of the Loans.

10

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

 

     “Margin Regulations” — Regulations T, U and X of the Board.
     “Material Adverse Change” — any change occurring since December 31, 2009,
in the consolidated financial position or results of operations of the Borrower
and its Subsidiaries taken as a whole that has had or could reasonably be
expected to have the effect of preventing the Borrower from carrying on its
business or from meeting its current and anticipated obligations on a timely
basis.
     “Material Subsidiary” — any Subsidiary which as of any relevant date either
(i) represents more than five percent (5%) of the Consolidated Net Income of the
Borrower for the preceding period of four (4) consecutive fiscal quarters for
which financial statements are then available or (ii) if such Subsidiary were
formed or acquired during such period, would have represented more than five
percent (5%) of Consolidated Net Income assuming that Consolidated Net Income
were calculated after giving pro forma effect to such acquisition or formation,
as if it had occurred on the first day of such period.
     “Maturity Date” — August 2, 2013.
     “Moody’s” — Moody’s Investors Service, Inc., and any successor thereto that
is a nationally recognized rating agency.
     “Multiemployer Plan” — a Plan which is a multiemployer plan as defined in
section 3(37) or 4001 (a)(3) of ERISA.
     “Note” — any promissory note of the Borrower payable to the order of a
Lender in substantially the form attached hereto as Exhibit A.
     “Other Taxes” — any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement, other than income, franchise and
similar taxes and Excluded Taxes.
     “Participant” — as defined in Section 10.04(c)(i).
     “Partnership Agreement” — the Amended and Restated Agreement of Limited
Partnership of the Borrower, as may be amended from time to time.
     “Permitted Acquisitions” — an Acquisition by the Borrower or any of its
Subsidiaries, so long as (i) no Default or Event of Default is in existence or
would be created thereby, (ii) (x) a substantial part of the assets of the
Person (including any Joint Venture) or (y) the assets being acquired by the
Borrower or such Subsidiaries are commonly understood to be in the midstream
energy business, and (iii) immediately after giving effect to such acquisition,
the Borrower has aggregate availability of not less than $50,000,000 under
committed credit facilities and its Consolidated Leverage Ratio does not exceed
4.25 to 1.00.
     “Permitted Senior Debt” — any Indebtedness in an aggregate principal amount
not to exceed, at any one time outstanding, (a) the greater of (i) $50,000,000
and (ii) 15% of Consolidated Net Tangible Assets minus (b) the Principal Amount
of the Loans, calculated as of

11

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

 

the date such Indebtedness is incurred; provided that, for purposes of this
definition with respect to any such Indebtedness of a Joint Venture of the
Borrower with no recourse to the Borrower or any wholly-owned Subsidiary
thereof, only that portion of such Indebtedness reflecting the Borrower’s pro
rata ownership interest therein shall be included in calculating compliance
herewith.
     “Permitted Senior Debt Document” means any indenture, note purchase
agreement, term loan agreement, revolving credit agreement, commercial paper
facility or other agreement pursuant to which any Permitted Senior Debt is
incurred.
     “Person” — any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
     “Plan” — any employee pension benefit plan, as defined in section 3(2) of
ERISA, which (a) is currently or hereafter sponsored, maintained or contributed
to by the Borrower, a Subsidiary or an ERISA Affiliate or (b) was at any time
during the six calendar years preceding the Effective Date, sponsored,
maintained or contributed to by the Borrower, a Subsidiary or an ERISA
Affiliate.
     “Pricing Schedule” — the schedule attached hereto as Schedule I and
identified as such.
     “Prime Rate” — the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its principal
U.S. office; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective. Such rate is set
by the Administrative Agent as a general reference rate of interest, taking into
account such factors as the Administrative Agent may deem appropriate; it being
understood that many of the Administrative Agent’s commercial or other loans are
not priced in relation to such rate, that it is not necessarily the lowest or
best rate actually charged to any customer and that the Administrative Agent may
make various commercial or other loans at rates of interest having no
relationship to such rate.
     “Principal Amount” —the outstanding principal amount of any Loan.
     “Register” — as defined in Section 10.04(b)(iv).
     “Related Parties” — with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, advisors and
agents of such Person and such Person’s Affiliates.
     “Restricted Payment” — any dividend or other distribution (whether in cash,
securities or other property) with respect to any equity interests in the
Borrower or any of its Subsidiaries, 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 equity interests in the Borrower or any of its Subsidiaries or any
option, warrant or other right to acquire any such equity interests in the
Borrower or any of its Subsidiaries.

12

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

 

     “Revolving Credit Agreement” — that certain Revolving Credit Agreement
dated October 29, 2009 among Borrower, Wells Fargo Bank, National Association,
as administrative agent, and the lenders named therein, as from time to time
amended, supplemented, replaced, restated or otherwise modified from time to
time, together with any and all other documents, instruments and certificates
executed and delivered pursuant thereto, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
     “S&P” — Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, and any successor thereto that is a nationally recognized rating
agency.
     “Sale and Leaseback Transaction” — as defined in Section 6.09.
     “Subsidiary” — with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless the context otherwise
clearly requires, reference in this Agreement to a “Subsidiary” or the
“Subsidiaries” refers to a Subsidiary or the Subsidiaries of the Borrower.
     “Syndication Agent” — as defined in the preamble hereof.
     “Taxes” — any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings and interest or penalties in respect thereof
imposed by any Governmental Authority.
     “Transactions” — the execution, delivery, and performance by the Borrower
of this Agreement, the borrowing of the Loans and the use of the proceeds
thereof.
     “Type” — as to any Loan or Borrowing, its nature as an Alternate Base Rate
Loan or an Alternate Base Rate Borrowing, a Eurodollar Loan or a Eurodollar
Borrowing.
     “US” or “United States” — the United States of America, its fifty states,
and the District of Columbia.
     “US Dollars” or “US$” or “$” or “Dollars” — lawful money of the United
States of America.
     “USA Patriot Act” — as defined in Section 10.14.
     “Working Capital Line” — the working capital line of credit issued by
Anadarko to the Borrower pursuant to that Working Capital Loan Agreement dated
as of May 25, 2010, as the

13

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

 

same may be amended, restated, modified or replaced from time to time, in an
aggregate amount not exceeding $30,000,000.
     Section 1.02 Use of Defined Terms. Any defined term used in the plural
preceded by the definite article shall be taken to encompass all members of the
relevant class. Any defined term used in the singular preceded by “any” shall be
taken to indicate any number of the members of the relevant class.
     Section 1.03 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in each case in accordance with GAAP as in
effect from time to time; provided that unless the Borrower and the Majority
Lenders shall otherwise agree in writing, no such change shall modify or affect
the manner in which compliance with the covenants contained herein is computed
such that all such computations shall be conducted utilizing financial
information presented consistently with prior periods.
     Section 1.04 Interpretation. The word “including” (and with correlative
meaning “include”) means including, without limitation, the generality of any
description preceding such term.
ARTICLE II
AMOUNT AND TERMS OF LOANS
     Section 2.01 Loans.
          (a) Subject to the terms and conditions of this Agreement, each Lender
severally agrees to make a single term Loan to the Borrower on the Effective
Date in a principal amount that will not result in (i) such Lender’s Loan
exceeding such Lender’s Commitment or (ii) the sum of the total Loans of all
Lenders exceeding the total Commitments. The Borrower may not use the
Commitments by borrowing, repaying and prepaying the Loans in whole or in part,
and reborrowing.
          (b) The term Loan shall be made only on the Effective Date as part of
a Borrowing consisting of Loans made by the Lenders ratably in accordance with
their Commitments. The failure of any Lender to make its Loan required to be
made by it shall not relieve any other Lender of its obligations hereunder,
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make its Loan as required.
          (c) Subject to Section 2.17, the Loans may be (i) Eurodollar Loans,
(ii) Alternate Base Rate Loans or (iii) a combination thereof, as determined by
the Borrower. Eurodollar Loans shall be made and maintained by each Lender at
either its Eurodollar Lending Office or its Domestic Lending Office, at its
option, provided that the exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement or create or increase any obligation of the Borrower not
otherwise arising, or arising in such increased amount, under Section 2.14.

14

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

 

     Section 2.02 Repayment of Loans; Evidence of Debt.
          (a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
and accrued interest amount of the Loan of such Lender on the Maturity Date in
respect of such Lender; provided that all Loans shall be paid on such earlier
date upon which the maturity of the Loans shall have been accelerated pursuant
to ARTICLE VIII.
          (b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from the Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
          (c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder, and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.
          (d) The entries made in the accounts maintained pursuant to paragraph
(b) and (c) of this Section 2.02 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
          (e) Any Lender may request that the Loan made by it to the Borrower be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender in substantially the form attached hereto as Exhibit A. Thereafter,
the Loan evidenced by such Note and interest thereon shall, at all times
(including after assignment pursuant to Section 10.04), be represented by one or
more Notes in such form payable to the order of the payee named therein.
          (f) Each Lender is authorized to and shall endorse the date, Type and
amount of the Loan made by such Lender, each continuation thereof, each
conversion of all or a portion thereof to the same or another Type, and the date
and amount of each payment of principal with respect thereto on the schedule
annexed to and constituting a part of its Note from the Borrower. No failure to
make or error in making any such endorsement as authorized hereby shall affect
the validity of the obligations of the Borrower to repay the unpaid Principal
Amount of the Loan made to the Borrower with interest thereon as provided in
Section 2.10 or the validity of any payment thereof made by the Borrower. Each
Lender shall, at the request of the Borrower, deliver to the Borrower copies of
the Borrower’s Note and the schedules annexed thereto.

15

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

 

     Section 2.03 Procedure for Borrowing. The Borrower shall borrow the Loans
on the Effective Date, which shall be a Business Day; provided that the Borrower
shall notify the Administrative Agent by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower of the Borrowing (the “Borrowing
Request”) not later than 10:00 a.m., New York City time (a) three (3) Business
Days prior to the Effective Date, in the case of Eurodollar Loans, and (b) on
the Effective Date, in the case of Alternate Base Rate Loans. Such written
Borrowing Request shall specify (i) the amount to be borrowed, (ii) the
Effective Date, (iii) whether the Borrowing is to consist of Eurodollar Loans,
Alternate Base Rate Loans, or a combination thereof (in each case stating the
amounts and currency requested), (iv) in the case of Eurodollar Loans, the
length of the Interest Period(s) therefor, and (v) the location and number of
the Borrower’s account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.12. The Borrowing shall be in an amount
specified in the Borrowing Request not to exceed the aggregate amount of the
Commitments. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its pro
rata share of the Borrowing available to the Administrative Agent for the
account of the Borrower in accordance with Section 2.12. The proceeds of the
Borrowing of Loans will be made available to the Borrower by the Administrative
Agent in accordance with Section 2.12.
     Section 2.04 Reserved.
     Section 2.05 Reserved.
     Section 2.06 Reserved.
     Section 2.07 Optional Prepayments.
          (a) The Borrower may, at its option, as provided in this Section 2.07,
at any time and from time to time prepay the Loans payable by the Borrower, in
whole or in part, upon notice to the Administrative Agent, specifying (i) the
date and amount of prepayment, and (ii) the respective amounts to be prepaid in
respect of such Loans. Upon receipt of such prepayment notice, the
Administrative Agent shall promptly notify each Lender thereof. The payment
amount specified in such notice shall be due and payable on the date specified.
All prepayments pursuant to this Section 2.07 shall include accrued interest on
the amount prepaid to the date of prepayment and, in the case of prepayments of
Eurodollar Loans, any amounts payable pursuant to Section 2.21. The Loans shall
also be subject to prepayment as provided in Section 10.13.
          (b) Partial optional prepayments pursuant to this Section 2.07 shall
be in an aggregate principal amount of $5,000,000 or any whole multiple of
$1,000,000 in excess thereof. All prepayments of Loans pursuant to this
Section 2.07 shall be without the payment by the Borrower of any premium or
penalty except for amounts payable pursuant to Section 2.21.
     Section 2.08 Reserved.
     Section 2.09 Reserved.

16

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

 

     Section 2.10 Interest.
          (a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto on the unpaid Principal Amount thereof at a
rate per annum equal to the LIBO Rate for such Interest Period plus the
Eurodollar Margin for such day. Each Alternate Base Rate Loan shall bear
interest on the unpaid Principal Amount thereof at a fluctuating rate per annum
equal to the Alternate Base Rate plus the Base Rate Margin. Upon the occurrence
and continuance of any Event of Default occurring pursuant to Section 8.01(a),
Section 8.01(f) or Section 8.01(g), all Loans outstanding and such overdue
amount, in the case of a failure to pay amounts when due, shall automatically
bear interest (as well after as before judgment), at a rate per annum which is
two percent (2%) above the rate which would otherwise be applicable to such Loan
pursuant to whichever of the three preceding sentences shall apply (the
“Post-Default Rate”) until paid in full. Upon the occurrence and continuance of
any Event of Default other than those listed in the previous sentence, all Loans
outstanding shall bear interest at the Post-Default Rate upon the written
election of the Majority Lenders. Interest shall be payable in arrears on each
Interest Payment Date; provided, however, that interest payable on overdue
principal shall be payable on demand.
          (b) The Borrowing initially shall be of the Type specified in the
Borrowing Request and, in the case of a Eurodollar Loan, shall have an initial
Interest Period as specified in the Borrowing Request. Thereafter, the Borrower
may elect to convert the Borrowing to a different Type or to continue the
Borrowing for an additional Interest Period (and elect Interest Periods
therefor), all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall then and thereafter be considered a separate Borrowing.
          (c) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election (the “Interest Election
Request”) by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
          (d) Each telephonic and written Interest Election Request shall
identify the Borrower and specify the following information in compliance with
Section 2.03:
          (i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and
(iv) below shall be specified for each resulting Borrowing);

17

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

 

          (ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
          (iii) whether the resulting Borrowing is to be an Alternate Base Rate
Borrowing or a Eurodollar Borrowing; and
          (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term “Interest
Period.”
          (e) If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.
          (f) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s obligation with respect to each resulting Borrowing.
          (g) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Loan prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be continued as
an Alternate Base Rate Loan. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Majority Lenders, so notifies the Borrower, then, so long
as such Event of Default is continuing (i) no outstanding Borrowing may be
continued as a Eurodollar Loan, and (ii) unless repaid, each Eurodollar Loan
shall be continued as an Alternate Base Rate Loan at the end of the Interest
Period applicable thereto.
     Section 2.11 Computation of Interest.
          (a) Interest on Alternate Base Rate Loans shall be calculated on the
basis of a 365- (or 366- as the case may be) day year for the actual days
elapsed. Interest on Eurodollar Loans shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent shall notify
the Borrower and the Lenders of each determination of a LIBO Rate. Any change in
the interest rate resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such change
in the applicable rate shall become effective. The Administrative Agent shall
notify the Borrower and the Lenders of the effective date and the amount of each
such change in the Alternative Base Rate.
          (b) The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the computations used by the
Administrative Agent in determining any interest rate pursuant to
Section 2.11(a).

18

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

 

     Section 2.12 Funding of Borrowings.
          (a) Each Lender shall make the Loan to be made by it hereunder on the
Effective Date by wire transfer of immediately available funds by 12:00 p.m.,
New York City time, to the account of the Administrative Agent designated by it
for such purpose by notice to the Lenders. The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower designated by the
Borrower in the Borrowing Request.
          (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the Effective Date that such Lender will not make available to
the Administrative Agent such Lender’s share of the Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on the Effective Date in accordance with Section 2.12(a) and may, in reliance
upon such assumption, make available to the Borrower a corresponding amount. In
such event, if a Lender has not in fact made its share of the Borrowing
available to the Administrative Agent, then each such Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to the Borrower to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the cost incurred by the Administrative Agent for making such
Lender’s share of the Borrowing and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation, or
(ii) in the case of the Borrower, the interest rate applicable to Alternate Base
Rate Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in the Borrowing.
     Section 2.13 Pro Rata Treatment and Payments.
          (a) The Borrowing by the Borrower from the Lenders, each payment
(including each prepayment) by the Borrower on account of the principal of and
interest on the Loans shall be made pro rata according to the Applicable
Percentages, except that (i) payments or prepayments, and offsets against or
reductions from the amount of payments and prepayments, in each case,
specifically for the account of a particular Lender under the terms of Section
2.14, Section 2.15, Section 2.16, Section 2.21, Section 10.03 or Section 10.13
shall be made for the account of such Lender, and (ii) if any Lender shall
become a Defaulting Lender, from and after the date upon which such Lender shall
have become a Defaulting Lender, any payment made on account of principal of or
interest on the Loans shall be applied, first for the account of the Lenders
other than the Defaulting Lender, pro rata according to the Applicable
Percentages of such Lenders, until the principal of and interest on the Loans of
such Lenders shall have been paid in full and, second for the account of such
Defaulting Lender, provided that the application of such payments in accordance
with this clause (ii) shall not constitute an Event of Default or a Default, and
no payment of principal of or interest on the Loans of such Defaulting Lender
shall be considered to be overdue for purposes of Section 2.10(a), if, had such
payments been applied without regard to this clause (ii), no such Event of
Default or Default would have occurred and no such payment of principal of or
interest on the Loans of such

19

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

 

Defaulting Lender would have been overdue. All payments (including prepayments)
to be made by the Borrower on account of principal and interest shall be made in
immediately available funds without setoff or counterclaim and shall be made to
the Administrative Agent on behalf of the Lenders at the Administrative Agent’s
office as notified to the Borrower from time to time at least five (5) Business
Days before any change in such office. On the date of this Agreement, the office
of the Administrative Agent is located at Wells Fargo Bank, National
Association, Houston Energy Group, 1000 Louisiana Street, 9th Floor, Houston, TX
77002, Attention of Will Rogers, Phone No.: (713) 319-1362, Facsimile No.: (713)
739-1087. The Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received.
          (b) If any payment hereunder (other than payments on the Eurodollar
Loans) becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month in which event such
payment shall be made on the immediately preceding Business Day.
          (c) Except as provided in Section 2.14, Section 2.15, Section 2.16,
Section 2.21, Section 10.03, Section 10.13, and this Section 2.13, if any Lender
shall, by exercising any right of set-off or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Loans resulting
in such Lender receiving payment of a greater proportion of the aggregate amount
of its Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans with respect to the Loans
of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by such Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
          (d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent

20

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

 

for the account of the Lenders hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the cost incurred by the
Administrative Agent for making such distributed amount and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation.
          (e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.12(b) or Section 2.13(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.
     Section 2.14 Increased Cost of Loans.
          (a) If any change in any applicable law, treaty or governmental
regulation after the date of this Agreement, or in the interpretation or
application thereof after the date of this Agreement, or compliance by any
Lender with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made or issued after the
date of this Agreement, which:
          (i) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, advances or loans by,
or other credit extended by, or any other acquisition of funds by, any office of
such Lender; or
          (ii) does or shall impose on such Lender or the London interbank
market any other condition affecting this Agreement, any Note or the Eurodollar
Loans;
and the result of any of the foregoing is to increase the cost to such Lender of
making, continuing or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to reduce any amount received or
receivable by such Lender hereunder or under any Note (whether of principal,
interest, or otherwise), then, in any such case, the Borrower shall pay such
Lender, upon written demand being made to the Borrower by such Lender, such
additional amount or amounts which will compensate such Lender for such amounts
as such Lender reasonably deems to be material with respect to this Agreement,
the Notes, or the Loans hereunder, provided, however, that if all or any such
additional cost would not have been payable, or such reduction would not have
occurred, but for such Lender’s decision to designate a new Eurodollar Lending
Office or Domestic Lending Office or refusal to change to another Eurodollar
Lending Office or Domestic Lending Office as provided below, the Borrower shall
have no obligation under this Section 2.14 to compensate such Lender for such
amount. Such

21

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

 

demand shall be accompanied by a certificate of a duly authorized officer of
such Lender setting forth the amount of such payment and the basis therefor.
Each Lender shall also give written notice to the Borrower and the
Administrative Agent of any event occurring after the date of this Agreement
which would entitle such Lender to compensation pursuant to this Section 2.14 as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation and will designate a different Eurodollar Lending
Office or a Domestic Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender. Notwithstanding the foregoing,
in the event that any Lender shall demand payment pursuant to this Section 2.14,
the Borrower may, upon at least two (2) Business Days’ notice to the
Administrative Agent and such Lender, continue in whole (but not in part) the
Eurodollar Loans of such Lender into Alternate Base Rate Loans without regard to
the requirements of Section 2.10.
          (b) If any Lender shall have reasonably determined that the adoption
after the date of this Agreement of any law, rule or regulation regarding
capital adequacy, or any change therein or in the interpretation or application
thereof after the date of this Agreement or compliance by any Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any central bank or other Governmental Authority made or issued
after the date of this Agreement, does or shall have the effect of reducing the
rate of return on such Lender’s capital, or in the capital of such Lender’s
holding company, if any, as a consequence of its obligations hereunder to a
level below that which such Lender, or such Lender’s holding company, could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s policies and the policies of such Lender’s holding company with
respect to capital adequacy) by an amount reasonably deemed by such Lender to be
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction from and after such
date the Borrower receives the request; provided, however, that the foregoing
shall not apply to any capital adequacy requirement imposed solely by reason of
any business combination effected after the Effective Date.
          (c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section 2.14 shall be delivered to
the Borrower and shall be prima facie evidence of the amount of such payment.
The Borrower shall pay such Lender the amount shown as due on any such
certificate within ten (10) days after receipt thereof.
          (d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section 2.14 shall not constitute a waiver of such Lender’s
right to demand such compensation; provided that the Borrower shall not be
required to compensate a Lender pursuant to this Section 2.14 for any increased
costs or reductions incurred more than 270 days prior to the date that such
Lender notifies the Borrower of the change in law giving rise to such increased
costs or reductions and of such Lender’s intention to claim compensation
therefor; provided further that, if the change in law giving rise to such

22

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

 

increased costs or reductions is retroactive, then the 270-day period referred
to above shall be extended to include the period of retroactive effect thereof.
     Section 2.15 Illegality. Notwithstanding anything herein contained, if any
Lender shall make a good faith determination that a change in any applicable law
or regulation after the date of this Agreement or in the interpretation thereof
after the date of this Agreement by any authority charged with the
administration thereof shall make it unlawful for such Lender to give effect to
its obligations to make, continue or maintain its Eurodollar Loans under this
Agreement, the obligation of such Lender to make, continue or maintain
Eurodollar Loans hereunder shall be suspended for the duration of such
illegality. Such Lender, by written notice to the Administrative Agent and the
Borrower, shall declare that such Lender’s obligation to make Eurodollar Loans
and to, continue and maintain Eurodollar Loans shall be suspended, and the
Borrower, on the last day of the then current Interest Period applicable to such
Eurodollar Loans or portion thereof or, if such Lender so requests, on such
earlier date as may be required by relevant law, shall continue such Eurodollar
Loans or portion thereof as Alternate Base Rate Loans without regard to the
requirements of Section 2.10. If and when such illegality ceases to exist, such
suspension shall cease and such Lender shall notify the Borrower and the
Administrative Agent thereof and any Loans previously continued from Eurodollar
Loans to Alternate Base Rate Loans pursuant to this Section 2.15 shall be
continued as Loans of Types corresponding to the Loans maintained by the other
Lenders on the last day of the Interest Period of the corresponding Eurodollar
Loans of such other Lenders.
     Section 2.16 Taxes.
          (a) Any and all payments by or on account of any obligation of the
Borrower under each Loan Document shall be made free and clear of and without
deduction or withholding for any Indemnified Taxes or Other Taxes; provided that
if the Borrower shall be required to deduct or withhold any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions or withholding (including
deductions or withholding applicable to additional sums payable under this
Section), the Administrative Agent or any Lender receives an amount equal to the
sum it would have received had no such deductions or withholding been made,
(ii) the Borrower shall make such deductions or withholding, and (iii) the
Borrower shall pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law.
          (b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
          (c) The Borrower shall indemnify the Administrative Agent and each
Lender, within ten (10) days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, on or with respect to any payment by or on account of any obligation of
the Borrower under each Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the

23

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

 

relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender, or by the Administrative
Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.
          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
          (e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or with withholding at a reduced rate. In addition,
each Lender that is not (i) a Foreign Lender or (ii) an “exempt recipient” that
is either (A) a corporation described in U.S. Treasury regulation section
1.6049-4(c)(1)(ii)(A)(1) or (B) a financial institution described in U.S.
Treasury regulation section 1.6049-4(c)(1)(ii)(M) (provided that the Lender is
reasonably identifiable as a financial institution pursuant to the last two
sentences of subparagraph (M)), agrees to provide Borrower with such form or
forms, including IRS Form W-9, as may be required under the Code, or other laws
of the United States or reasonably requested by Borrower, as a condition to
exemption from, United States backup withholding before receiving its first
payment under this Agreement and at any other time reasonably requested by
Borrower.
          (f) For any period during which a Lender has failed to provide the
Borrower with the appropriate documentation as required by Section 2.16(e), the
Borrower shall not be obligated to pay, and such Lender shall not be entitled to
secure additional amounts under this Section 2.16 with respect to Indemnified
Taxes imposed by a Governmental Authority to the extent that such additional
amounts would not have arisen but for such failure of such Lender.
          (g) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.16 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, however, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to forthwith repay
the amount paid over to the Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent or such Lender in the event

24

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

 

the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. Nothing contained in this Section 2.16 shall require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.
          (h) If the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.16(a), then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(a) would eliminate or reduce amounts payable pursuant to Section 2.16(a), in
the future and (b) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
          (i) If a payment made to a Lender under this Agreement would be
subject to withholding tax imposed by FATCA if such Lender fails to comply with
the applicable reporting requirements of FATCA (including those contained in
Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall
deliver to the Administrative Agent, at the time or times prescribed by
applicable law and at such time or times reasonably requested by the
Administrative Agent, such documentation prescribed by applicable law (including
as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Administrative Agent as may be
necessary for the Administrative Agent to comply with its obligations under
FATCA, to determine that such Lender has complied with such Lender’s obligations
under FATCA or to determine the amount to deduct and withhold from such payment.
     Section 2.17 Substitute Loan Basis. In the event that prior to the
commencement of any Interest Period for any Eurodollar Borrowing the Majority
Lenders shall reasonably determine (which determination shall be final and
conclusive and binding upon the Borrower) that (a) by reason of changes
affecting the London Interbank Eurodollar Market, adequate and fair means do not
exist for ascertaining the LIBO Rate for such requested Interest Period, or
(b) the LIBO Rate will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such Borrowing for such
Interest Period then, and in any such event, the Administrative Agent shall
forthwith give notice to the Borrower and, (i) unless, on the date upon which
such Eurodollar Loans were to be made, the Borrower notifies the Administrative
Agent that it elects not to borrow on such date, any Eurodollar Loans requested
to be made on the first day of such Interest Period shall be made as Alternate
Base Rate Loans, (ii) any Loans that were to have been, on the first day of such
Interest Period, continued as Eurodollar Loans, shall be continued as Alternate
Base Rate Loans on the date upon which such Loans were to have been continued,
and (iii) any outstanding Eurodollar Loans shall be continued, on the last day
of the Interest Period applicable thereto, as Alternate Base Rate Loans on the
date upon which such Loans are to be continued. The Administrative Agent shall
give written notice to the Borrower of any event occurring after the giving of
such notice which permits an adequate and fair means of ascertaining the LIBO
Rate and until such notice by the

25

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

 

Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to continue as Eurodollar Loans.
     Section 2.18 Certain Conversions or Continuations. If the Eurodollar Loans
of any Lender are converted or continued as Alternate Base Rate Loans pursuant
to Section 2.14 or Section 2.15 (such Eurodollar Loans being herein called
“Affected Loans”), unless and until such Lender gives written notice that the
circumstances which gave rise to such conversion or continuation no longer exist
(which such Lender agrees to do promptly upon such circumstances ceasing to
exist) such Lender shall not make further Affected Loans and all Loans which
would otherwise be made by such Lender as, or continued by such Lender into,
Affected Loans shall be made instead as, or continued as Alternate Base Rate
Loans (on which interest and principal shall be payable simultaneously with the
related Loans of the other Lenders).
     Section 2.19 Certain Notices. Notices by the Borrower under each of
Section 2.03, Section 2.07, Section 2.14, Section 2.17, and Section 2.10 and
under the definition of “Interest Period” in Section 1.01 (a) shall (unless
otherwise specifically provided) be given in writing, by telecopy or by
telephone (confirmed promptly in writing), and (b) shall be effective only if
received by the Administrative Agent and, in the case of Section 2.14, the
Lender involved, not later than 11:30 a.m. (New York City time) on the day
specified in the respective Section or definition as the latest day such notice
may be given. Notices by the Borrower under each of Section 2.03, Section 2.07,
Section 2.14, Section 2.17, and Section 2.10 shall be irrevocable.
     Section 2.20 Minimum Amounts of Eurodollar Borrowings. All Borrowings and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate Principal Amount of the Loans
comprising each Eurodollar Borrowing shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof.
     Section 2.21 Break Funding Payments. In the event of (a) the payment of any
Principal Amount of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the continuation of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, continue
or prepay any Loan on the date specified in any notice delivered pursuant
hereto, (d) the assignment of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto as a result of a request by the Borrower,
then, in any such event, the Borrower shall compensate each Lender for the loss,
cost and expense attributable to such event. In the case of a Eurodollar Loan,
such loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the Principal Amount of such Loan had such
event not occurred, at the LIBO Rate (in the case of a Eurodollar Loan) that
would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such Principal Amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any such Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall be
delivered to

26

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

 

the Borrower and the Administrative Agent and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof. Notwithstanding
anything to the contrary contained herein, no Lender shall be entitled to
receive any amount or amounts pursuant to this Section if such amount or amounts
are attributable solely to the merger or other consolidation of such Lender with
another Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     Section 3.01 Representations of the Borrower. The Borrower represents and
warrants to the Administrative Agent and the Lenders that:
          (a) The Borrower and each Subsidiary has been duly formed and is
validly existing and in good standing under the laws of the jurisdiction of its
organization and (ii) the Borrower and each Subsidiary is qualified to do
business as a foreign entity and is in good standing in each jurisdiction of the
United States in which the ownership of its properties or the conduct of its
business requires such qualification and where the failure to so qualify would
constitute a Material Adverse Change.
          (b) This Agreement, the Transactions and all other Loan Documents to
which the Borrower or any Subsidiary is a party have been duly authorized,
executed and delivered by the Borrower or such Subsidiary, and each of this
Agreement, its Notes and the other Loan Documents to which it is a party
constitutes a valid and binding agreement of the Borrower, enforceable in
accordance with its respective terms, subject to the effect of applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
equitable principals of general applicability. The Borrower’s Notes have been
duly authorized by the Borrower and, when executed, issued and delivered
pursuant hereto for value received, will constitute valid and binding
obligations of the Borrower, enforceable in accordance with their terms, except
as (i) may be limited by bankruptcy, insolvency or similar laws affecting
creditors’ rights generally, and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. There are no actions, suits or proceedings pending or, to
the knowledge of the Borrower or any Subsidiary, threatened against the Borrower
or any Subsidiary which purports to affect the legality, validity or
enforceability of this Agreement, any other Loan Document or any of their
respective Notes.
          (c) The execution, delivery and performance of each Loan Document by
the Borrower and its Subsidiaries will not violate or conflict with (i) the
organizational documents of the Borrower or any Subsidiary, as in effect on the
Effective Date, or (ii) any indenture, loan agreement or other similar agreement
or instrument binding on the Borrower or any Subsidiary.
          (d) The Borrower and its Subsidiaries are in compliance with all laws,
rules, regulations, orders, decrees and requirements of any Governmental
Authority applicable to them or their properties, except where the necessity of
compliance therewith

27

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

 

is being contested in good faith by appropriate proceedings or such failure to
comply would not have or would not reasonably be expected to cause a Material
Adverse Change.
          (e) On the Effective Date there are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Borrower, threatened against
the Borrower or any Subsidiary before any Governmental Authority as to which, in
the opinion of the Borrower, there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to constitute a Material Adverse Change.
          (f) The consolidated balance sheets of the Borrower (and its
predecessor entity) and its consolidated Subsidiaries as of December 31, 2008
and 2009, and the related consolidated statements of income, partners’ (or
stockholders’) equity and cash flows for each of the years in the three-year
period ended December 31, 2009, audited by KPMG LLP, present fairly, in all
material respects, the consolidated financial position of the Borrower and its
consolidated Subsidiaries as of December 31, 2008 and 2009, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 2009, in conformity with GAAP applied on a consistent
basis.
          (g) There has been no Material Adverse Change.
          (h) Neither the Borrower nor any Subsidiary is an “investment company”
as defined in, or subject to regulation under, the Investment Company Act of
1940.
          (i) No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Change. The present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans by an amount that could
reasonably be expected to be a Material Adverse Change.
          (j) Neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Agents or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished), taken as a whole, 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, it
being understood that projections by their nature are inherently uncertain and
no assurances are being given that the results reflected in the projected
financial information will be achieved.

28

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

 

          (k) The Borrower’s Subsidiaries as of the Effective Date are listed on
Schedule II.
          (l) The General Partner has filed all United States Federal income tax
returns and all other material tax returns and reports required to be filed (or
obtained extensions with respect thereto) and has paid all taxes required to
have been paid by it, except (i) taxes the validity of which is being contested
in good faith by appropriate proceedings, and with respect to which the General
Partner, to the extent required by GAAP, has set aside on its books adequate
reserves or (ii) to the extent the failure to do so (individually or
collectively) would not reasonably be expected to result in a Material Adverse
Change.
          (m) Each of the real properties owned or leased by the Borrower or any
of its Subsidiaries and all their operations at such properties are in
compliance with all applicable Environmental Laws and neither the Borrower nor
any of its Subsidiaries has received any notice regarding violation of any
Environmental Law with respect to the properties or the businesses operated by
the Borrower or any of its Subsidiaries, except as would not reasonably be
expected to result in a Material Adverse Change.
          (n) No Event of Default has occurred and is continuing.
          (o) The Borrower and its Subsidiaries are not engaged principally, or
as one of its or their important activities, in the business of extending credit
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock (within the meaning of the Margin Regulations).
          (p) The Borrower and each of its Subsidiaries is and, after the
consummation of the transactions contemplated by this Agreement, will be
“solvent” within the meaning of such term under the United States Bankruptcy
Code.
ARTICLE IV
AFFIRMATIVE COVENANTS
Until the principal of and interest on each Loan and all fees payable hereunder
shall have been paid in full, the Borrower covenants and agrees with the Lenders
that:
     Section 4.01 Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent and each Lender:
          (a) Within the period required by applicable law (and concurrently
with the filing thereof with the Commission), copies of the annual reports,
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Borrower may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Borrower is not required to file information, documents or reports
pursuant to either of said Sections, then such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 in respect of a security

29

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

 

listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations; provided, however, that the
Borrower shall be deemed to have furnished the information required by this
Section 4.01(a) if it shall have timely made the same available on “EDGAR” on
the worldwide web and complied with Section 4.01(f) in respect thereof; provided
further, however, that if any Lender is unable to access EDGAR on the worldwide
web, the Borrower agrees to provide such Lender with paper copies of the
information required to be furnished pursuant to this Section 4.01(a) promptly
following notice from the Administrative Agent that such Lender has requested
same.
          (b) Within sixty (60) days after the close of each of the first three
quarters of each fiscal year of the Borrower, a statement by a responsible
officer of the Borrower calculating compliance or non-compliance, as the case
may be, with Section 5.01 and Section 5.02 (if applicable) as of the close of
such period and stating whether to the knowledge of the Borrower an event has
occurred during such period and is continuing which constitutes an Event of
Default or a Default, and, if so, stating the facts with respect thereto.
          (c) Within one hundred twenty (120) days after the close of each
fiscal year of the Borrower, a statement by a responsible officer of the
Borrower calculating compliance or non-compliance, as the case may be, with
Section 5.01 and Section 5.02 (if applicable) as of the close of such period and
stating whether to the knowledge of the Borrower an event has occurred during
such period and is continuing which constitutes an Event of Default or a
Default, and, if so, stating the facts with respect thereto.
          (d) Such other information respecting the financial condition or
operations of the Borrower and its Subsidiaries as the Administrative Agent or
any Lender may from time to time reasonably request.
          (e) Information required to be delivered pursuant to Section 4.01(a)
above shall be deemed to have been delivered on the date on which the Borrower
provides notice to the Administrative Agent that such information has been
posted on EDGAR (and the Borrower hereby agrees to provide such notice).
     Section 4.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
          (a) the occurrence of any Event of Default;
          (b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower that if adversely determined, could reasonably be expected to result in
a Material Adverse Change; and
          (c) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Change.

30

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

 

Each notice delivered under this Section 4.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken with respect thereto.
     Section 4.03 Compliance with Laws. The Borrower will, and will cause each
of the Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property, and shall obtain
all consents and approvals required by any Governmental Authority (including the
U.S. Department of Justice) with respect to acquisitions, except where the
necessity of compliance therewith is being contested in good faith by
appropriate proceedings or where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Change.
     Section 4.04 Use of Proceeds.
          (a) The proceeds of the Loans shall be used to repay borrowings under
the Revolving Credit Agreement, provide working capital and for capital
expenditures, Permitted Acquisitions or other general corporate purposes.
          (b) No part of the proceeds of any Loan will be used for any purpose
which violates the Margin Regulations.
     Section 4.05 Maintenance of Property; Insurance.
          (a) The Borrower will keep, and will cause each of its Subsidiaries to
keep, all property useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted, except where the failure to do
so could not reasonably be expected to result in a Material Adverse Change.
          (b) The Borrower will at all times maintain, with financially sound
and reputable insurers, insurance of the kinds, covering the risks and in the
relative proportionate amounts (including as to self-insurance) customarily
carried by companies engaged in the same or similar business and similarly
situated; provided that the Borrower shall not be required to maintain insurance
against risks or in amounts no longer economically available on a de novo or
renewal basis, as applicable, to other companies engaged in the same or similar
business and similarly situated.
     Section 4.06 Additional Guarantors. The Borrower shall promptly cause any
newly formed or acquired Subsidiary other than a Joint Venture to guarantee the
Loans made under this Agreement pursuant to the Guaranty Agreement. In
connection with any such guaranty, the Borrower shall, or shall cause each such
Subsidiary to, (a) execute and deliver a supplement to the Guaranty Agreement
executed by such Subsidiary and (b) execute and deliver such other additional
closing documents, certificates and legal opinions as shall reasonably be
requested by the Administrative Agent. On the Investment Grade Rating Date, if
no Default or Event of Default has occurred and is continuing, the Subsidiaries
guaranteeing the Indebtedness shall be released of their obligations under the
Guaranty Agreement and this Section 4.06 shall have no further force or effect.

31

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

 

     Section 4.07 Books and Records; Inspections. The Borrower will keep, and
will cause each of its Subsidiaries to keep, complete and accurate books and
records of its transactions in accordance with good accounting practices on the
basis of GAAP (including the establishment and maintenance of appropriate
reserves). The Borrower will, and will cause each of its Subsidiaries to, permit
any representatives designated by the Administrative Agent, upon reasonable
prior notice, to visit and inspect its properties, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition
with its officers and independent accountants, all at such reasonable times and
as often as reasonably requested. In the absence of an Event of Default and
notwithstanding anything to the contrary in Section 10.03, the Borrower shall
not be required to pay for more than one such visit in any year.
     Section 4.08 Payment of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, pay its obligations, including Tax liabilities of the
Borrower and all of its Subsidiaries before the same shall become delinquent or
in default, except where (i) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (ii) the Borrower or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (iii) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Change.
     Section 4.09 Material Contracts. The Borrower will comply, and will cause
its Subsidiaries to comply, with all contracts necessary for the ongoing
operation and business of the Borrower or such Subsidiary in the ordinary
course, except where the failure to comply would not have or would not
reasonably be expected to cause a Material Adverse Change.
ARTICLE V
FINANCIAL COVENANTS
Until the principal of and interest on each Loan and all fees payable hereunder
shall have been paid in full, the Borrower covenants and agrees with the Lenders
that:
     Section 5.01 Consolidated Leverage Ratio. The Consolidated Leverage Ratio,
as at the end of each fiscal quarter of the Borrower (beginning with the fiscal
quarter ending September 30, 2010), shall be less than or equal to 4.50 to 1.00.
     Section 5.02 Consolidated Interest Coverage Ratio. The Consolidated
Interest Coverage Ratio, as at the end of each fiscal quarter of the Borrower
(beginning with the fiscal quarter ending September 30, 2010) occurring prior to
the Investment Grade Rating Date, shall be greater than or equal to 3.00 to
1.00. For each fiscal quarter ending on and after the Investment Grade Rating
Date, the Borrower shall have no further obligation to comply with this
Section 5.02.
ARTICLE VI
NEGATIVE COVENANTS
Until the principal of and interest on each Loan and all fees payable hereunder
shall have been paid in full, the Borrower covenants and agrees with the Lenders
that:

32

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

 

     Section 6.01 Nature of Business. The Borrower will not, nor will it permit
its Subsidiaries to (whether now owned or acquired or formed subsequent to the
Effective Date), materially alter the character of its or their business on a
consolidated basis from the midstream energy business.
     Section 6.02 Liens. The Borrower will not create, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired by it or any of its
Subsidiaries, except for the following:
          (a) Liens for taxes, assessments or other governmental or
quasi-governmental charges or levies not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance with
GAAP;
          (b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and interest owners of oil and gas production and other
Liens imposed by law, created in the ordinary course of business and for amounts
not past due for more than 60 days or which are being contested in good faith by
appropriate proceedings which are sufficient to prevent imminent foreclosure of
such Liens, are promptly instituted and diligently conducted and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP;
          (c) Liens incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers’ compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts;
          (d) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights of way, covenants, consents,
reservations, encroachments, variations and other restrictions, charges or
encumbrances (whether or not recorded) affecting the use of real property;
          (e) Liens with respect to judgments and attachments which do not
result in an Event of Default;
          (f) Liens created pursuant to construction, operating and maintenance
agreements, transportation agreements and other similar agreements and related
documents entered into in the ordinary course of business;
          (g) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
permitted under the terms of this Agreement (other than Capital Leases), public
or statutory obligations, surety, stay, appeal, indemnity, performance or other
obligations arising in the ordinary course of business;

33

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

 

          (h) Liens securing obligations under Capital Leases; provided, that
(i) any such Liens attach only to the property which is the subject of such
Capital Lease, (ii) such Liens secure only the Indebtedness comprised of such
Capital Lease and (iii) the aggregate Indebtedness being secured by such Liens
does not exceed at any one time calculated as of the date such Capital Lease is
created ten percent 10% of Consolidated Net Tangible Assets;
          (i) Liens securing Acquired Indebtedness;
          (j) rights of first refusal entered into in the ordinary course of
business;
          (k) Liens consisting of any (i) rights reserved to or vested in any
municipality or governmental, statutory or public authority to control or
regulate any property of the Borrower or any Subsidiary or to use such property,
(ii) obligations or duties to any municipality or public authority with respect
to any franchise, grant, license, lease or permit and the rights reserved or
vested in any Governmental Authority or public utility to terminate any such
franchise, grant, license, lease or permit or to condemn or expropriate any
property, or (iii) zoning laws, ordinances or municipal regulations;
          (l) Liens on deposits required by any Person with whom the Borrower or
any of its Subsidiaries enters into forward contracts, futures contracts, swap
agreements (including interest rate swap agreements) or other commodities
contracts in the ordinary course of business;
          (m) Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by this
Section 6.02; provided, that the principal amount of such Indebtedness is not
increased (other than to provide for the payment of any underwriting discounts
and fees related to any refinancing Indebtedness as well as any premiums owed on
and accrued and unpaid interest related to the original Indebtedness) and is not
secured by any additional assets; and
          (n) Liens securing (i) Permitted Senior Debt and (ii) other
obligations in an amount not to exceed, in the aggregate, at any one time,
calculated as of the date such Lien is incurred, 15% of Consolidated Net
Tangible Assets less the principal amount of Permitted Senior Debt then
outstanding and permitted to be secured pursuant to clause (i) above (and, for
purposes of this Section 6.02(n), with respect to any such secured Indebtedness
of a Joint Venture of the Borrower with no recourse to the Borrower or any
wholly-owned Subsidiary thereof, only that portion of such Indebtedness
reflecting the Borrower’s pro rata ownership interest therein shall be included
in calculating compliance herewith), provided that, if the amount of such
Permitted Senior Debt and other obligations exceed the amount specified above,
then at the time such Liens to secure such Permitted Senior Debt or other
obligations are granted, the Loans and other obligations under this Agreement
and other Loan Documents shall be secured equally and ratably with such
Permitted Senior Debt or other obligations.

34

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

 

     Section 6.03 Dispositions. Prior to the Investment Grade Rating Date, the
Borrower will not make, nor permit its Subsidiaries to make any Disposition
except:
          (a) Dispositions of inventory in the ordinary course of business;
          (b) Dispositions of machinery and equipment no longer used or useful
in the conduct of business of the Borrower and its Subsidiaries that are
Disposed of in the ordinary course of business;
          (c) Dispositions of assets to the Borrower or a Subsidiary;
          (d) Dispositions of or constituting Investments permitted under
Section 6.06;
          (e) Dispositions of accounts receivable in connection with the
collection or compromise thereof;
          (f) Dispositions of licenses, sublicenses, leases or subleases granted
to others not interfering in any material respect with the business of the
Borrower and its Subsidiaries;
          (g) Dispositions of Cash Equivalents for fair market value;
          (h) Dispositions in which: (i) the assets being disposed are used
simultaneously in exchange for replacement assets or (ii) the net proceeds
thereof are either (A) reinvested within 180 days from such Disposition in
assets to be used in the ordinary course of the business of the Borrower and its
Subsidiaries and/or (B) used first, to permanently reduce on a dollar for dollar
basis the commitments under the Revolving Credit Agreement, and then, to prepay
the Loans; or
          (i) other Dispositions not exceeding in the aggregate for the Borrower
and its Subsidiaries (i) 10% of Consolidated Net Tangible Assets in any fiscal
year (measured as of the date of determination) and (ii) 20% of Consolidated Net
Tangible Assets during the term of this Agreement.
     Section 6.04 Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, pay any funds to
or for the account of, make any investment in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate in,
or effect, any transaction with, any officer, director, employee or Affiliate
(other than the Borrower or one of its Subsidiaries) unless such transaction
between the Borrower and its Subsidiaries on the one hand and any officer,
director, employee or Affiliate (other than the Borrower or one of its
Subsidiaries) on the other hand, shall be on terms that are fair and reasonable
to the Borrower or such Subsidiary; provided, that the foregoing provisions of
this Section 6.04 shall not (a) prohibit the Borrower or any Subsidiary from
declaring or paying any lawful dividend or distribution otherwise permitted
hereunder, (b) prohibit the Borrower or any Subsidiary from providing credit
support for its Subsidiaries as it deems appropriate in the ordinary course of
business, (c) prohibit the Borrower or any Subsidiary from engaging in a
transaction or transactions on terms that are not fair and reasonable to such
Person, provided that

35

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

 

such transaction or transactions occurs within a related series of transactions,
which, in the aggregate, are fair and reasonable to such Person, (d) prohibit
the Borrower or any Subsidiary from engaging in non-material transactions with
any Affiliate other than the Borrower or any Subsidiary that are not fair and
reasonable to such Person, but are in the ordinary course of such Person’s
business, so long as, in each case, after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing, (e) prohibit the
Borrower or any Subsidiary from entering into or performing its obligations
under any of the agreements listed on Schedule III or any amendments,
modifications or replacements thereto that, in the aggregate, are not materially
adverse to the Borrower or any Subsidiary party thereto, or (f) prohibit the
Borrower or any Subsidiary from compensating its employees and officers in the
ordinary course of business; provided, further, that a finding by the Board of
Directors of General Partner that a transaction or series of transactions is on
terms which are fair and reasonable to the Borrower or any Subsidiary shall be
dispositive.
     Section 6.05 Indebtedness. Prior to the Investment Grade Rating Date, the
Borrower will not, nor will it permit its Subsidiaries to, create, incur, assume
or suffer to exist any Indebtedness, except:
          (a) Indebtedness under the Loan Documents;
          (b) Investments permitted under Section 6.06 that would constitute
Indebtedness;
          (c) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under hedging agreements or other derivative
products; provided that, such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments, investments, assets, or property
held or reasonably anticipated by such Person, or changes in the value of
securities issued by such Person, and not for purposes of speculation or taking
a “market view”;
          (d) current liabilities of the Borrower or its Subsidiaries incurred
in the ordinary course of business but not incurred through (i) the borrowing of
money or (ii) the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal purchases of
goods and services;
          (e) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in accordance
with the provisions of this Agreement;
          (f) Indebtedness in respect of the Working Capital Line and
Intercompany Loan in an aggregate principal amount not to exceed $205,000,000;
          (g) Indebtedness in respect of the Revolving Credit Agreement;
          (h) Indebtedness in respect of the APC Revolver in an aggregate amount
not to exceed $100,000,000;

36

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

 

          (i) Indebtedness in respect of judgments or awards only to the extent,
for the period and for an amount not resulting in a Default or Event of Default;
          (j) refinancings, extensions, renewals and refunding of Indebtedness
permitted by this Section 6.05;
          (k) Acquired Indebtedness; and
          (l) Permitted Senior Debt.
On and after the Investment Grade Rating Date, the Borrower will not (i) create,
incur, assume or suffer to exist any Indebtedness (other than Loans hereunder)
unless at the time of the incurrence thereof and after giving effect thereto
(x) the Borrower shall be in compliance with Section 5.01 and (y) no Default or
Event of Default shall have occurred and be continuing or (ii) permit its
Subsidiaries to, create, incur, assume or suffer any Indebtedness (other than
guarantees of the Loans hereunder), except (x) Indebtedness in an aggregate
amount not to exceed, at any one time outstanding as of the date such
Indebtedness is incurred, not to exceed the lesser of (A) 20% of Consolidated
Net Tangible Assets less, if the Loans and other obligations under this
Agreement have not been secured as contemplated under Section 6.02(n), the
amount of Indebtedness secured under Section 6.02(n) and (B) 15% of Consolidated
Net Tangible Assets and (y) Acquired Indebtedness.
     Section 6.06 Investments. Prior to the Investment Grade Rating Date, the
Borrower will not, nor will it permit its Subsidiaries to, make any Investments,
except:
          (a) Investments held by the Borrower or a Subsidiary of the Borrower
in the form of cash or Cash Equivalents;
          (b) Investments in any Subsidiary of the Borrower or by any Subsidiary
in the Borrower;
          (c) 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;
          (d) Investments in any Joint Venture for the purpose of developing
capital projects in the midstream energy business; provided that either (i) such
Joint Venture is not subject to any contract or other consensual restriction or
limitation on the ability of such Joint Venture to make Restricted Payments to
the Borrower or its Subsidiaries (each a “Payment Restriction”) other than
limitations contained in its organizational documents subjecting such Restricted
Payments to the discretion of its Board of Directors and/or permitting
Restricted Payments only to the extent of available cash (as defined therein),
(ii) such Investment is in a Joint Venture that was in existence prior to the
Effective Date, or (iii) if such Investment is in Joint Ventures subject to
Payment Restrictions (other than as permitted in the foregoing clause (ii)), the
aggregate amount of all such Investments does not exceed, at any one time
outstanding, calculated as

37

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

 

of the date such Investment is made, 25% of Consolidated Net Tangible Assets;
provided that in no event shall the aggregate amount of Investments in Joint
Ventures, other than Investments in Joint Ventures permitted under the foregoing
clause (ii), calculated as of the date such Investment is made, exceed 30% of
Consolidated Net Tangible Assets;
          (e) Investments in Permitted Acquisitions;
          (f) Loans and advances to the General Partner to enable the General
Partner to pay general and administrative costs and expenses pursuant to the
Partnership Agreement;
          (g) A $260,000,000 loan to Anadarko issued in connection with the
Borrower’s initial public offering in the form of a 6.5% 30-year note payable
quarterly, with principal and all accrued and unpaid interest due in full at
maturity; and
          (h) other Investments in an aggregate amount not to exceed, at any one
time outstanding, $25,000,000.
     Section 6.07 Restricted Payments. Prior to the Investment Grade Rating
Date, the Borrower will not, nor will it permit its Subsidiaries to, 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 pay dividends or distributions with
respect to its Equity Interests payable solely in additional Equity Interests of
the Borrower;
          (b) Subsidiaries may declare and pay dividends or distributions
ratably with respect to their Equity Interests;
          (c) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, the Borrower may declare and pay quarterly
cash dividends or distributions to its partners of Available Cash in accordance
with the Partnership Agreement;
          (d) the Borrower and its Subsidiaries may make payments or other
distributions to officers, directors or employees with respect to the exercise
by any such Persons of options, warrants or other rights to acquire Equity
Interests in the Borrower or such Subsidiary issued pursuant to an employment,
equity award, equity option or equity appreciation agreement or plans entered
into by the Borrower or such Subsidiary in the ordinary course of business;
          (e) so long as no Default or Event of Default exists and is
continuing, the Borrower may make repurchases of its Equity Interests; and
          (f) so long as no Default or Event of Default exists and is
continuing, the Borrower may make special distributions to the General Partner
in connection with any Permitted Acquisition with Anadarko or any of its
Subsidiaries (other than the Borrower and its Subsidiaries) in an amount, for
any Permitted Acquisition, not greater than the aggregate value of the
consideration for the property or assets acquired.

38

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

 

     Section 6.08 Intercompany Payments.
          (a) The Borrower will not, nor will it permit its Subsidiaries to,
make any payment of principal on any intercompany Indebtedness owed to any
Person other than the Borrower or its Subsidiaries, except (i) payments made by
the Borrower on the Working Capital Line, and (ii) as may be refinanced with a
public or private debt or equity issuance; provided that, if no Loan is
outstanding, the Borrower may make payments on the Intercompany Loan.
          (b) If an Event of Default has occurred and is continuing, then the
Borrower and its Subsidiaries shall not offset any intercompany payables or
receivables owing among any of the Borrower and any of its Subsidiaries on the
one hand and Anadarko or any of its Subsidiaries, other that the Borrower or its
Subsidiaries, on the other.
     Section 6.09 Limitations on Sales and Leasebacks. The Borrower will not,
and will not permit any Subsidiary to, enter into any arrangement with any bank,
insurance company or other lender or investor (not including the Borrower or any
Subsidiary) or to which any such lender or investor is a party, providing for
the leasing by the Borrower or a Subsidiary for a period, including renewals, in
excess of three years, of any property which has been or is to be sold or
transferred more than one hundred eighty (180) days after the completion of
construction and commencement of full operation thereof, by the Borrower or any
Subsidiary to such lender or investor or to any Person to whom funds have been
or are to be advanced by such lender or investor on the security of such
property (herein referred to as a “sale and leaseback transaction”) unless the
Borrower, within one hundred eighty (180) days after the sale or transfer shall
have been made by the Borrower or by a Subsidiary, applies an amount equal to
the greater of (i) the net proceeds of the sale of the property sold and leased
back pursuant to such arrangement or (ii) the net amount (after deducting
applicable reserves) at which such property is carried on the books of the
Borrower or such Subsidiary at the time of entering into such arrangement, to
the retirement of Indebtedness of the Borrower.
     Section 6.10 Fundamental Changes. The Borrower shall not consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person unless:
          (a) (i) in the case of a merger or amalgamation, the Borrower is the
surviving entity; or
     (ii) the Person formed by such consolidation or into which the Borrower is
merged or the Person which acquires by conveyance or transfer, or which leases,
the properties and assets of the Borrower substantially as an entirety shall be
a corporation, partnership or trust, shall be organized and existing under the
laws of the United States of America, any State thereof or the District of
Columbia, shall (1) have unsecured non-credit enhanced publicly held
indebtedness with an Investment Grade Rating, and (2) expressly assume, by an
agreement supplemental hereto, executed and delivered to the Administrative
Agent, in form reasonably satisfactory to the Administrative Agent, the
obligations of the Borrower hereunder, including the due and punctual payment of
the principal of and interest on all

39

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

 

the Loans and the performance of every covenant of this Agreement on the part of
the Borrower to be performed or observed; and
          (b) immediately after giving effect to such transaction, no Event of
Default or Default shall have occurred and be continuing.
     Section 6.11 Negative Pledge Agreements. Prior to the Investment Grade
Rating Date, the Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or suffer to exist any contract, agreement or
understanding (other than this Agreement, the Revolving Credit Agreement or the
Permitted Senior Debt Documents) which prohibits or restricts the granting,
conveying, creation or imposition of any Lien on any of its property in favor of
the Administrative Agent and the Lenders (other than any obligation under the
Revolving Credit Agreement or the Permitted Senior Debt Documents to secure the
obligations under this Agreement equally and ratably with other senior
Indebtedness permitted to be incurred under Section 6.05) or restricts any
Subsidiary from paying dividends or making distributions to the Borrower or any
Subsidiary that is a guarantor, or which requires the consent of other Persons
in connection therewith; provided, that this covenant shall not apply to Chipeta
or to any other Joint Venture in which the Equity Interests of the Borrower or
any Subsidiary constitute an Investment not prohibited under Section 6.06.
For the sake of clarity, nothing in this Section 6.11 shall restrict Anadarko or
any Subsidiary of Anadarko, other than the Borrower or any of its Subsidiaries.
ARTICLE VII
CONDITIONS OF LENDING
     Section 7.01 Conditions Precedent to the Loans.. The obligations of the
Lenders to make the Loans shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 10.02):
          (a) Appropriate Notes are issued payable to the order of such Lender,
if requested;
          (b) The Administrative Agent (or its counsel) shall have received
(i) from each party hereto either (1) a counterpart of this Agreement signed on
behalf of such party, or (2) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement and
(ii) from each Subsidiary that is a guarantor, either (1) a counterpart of the
Guaranty signed on behalf of such party, or (2) written evidence satisfactory to
the Administrative Agent (which may include telecopy transmission of a signed
signature page of the Guaranty) that such party has signed a counterpart of the
Guaranty;
          (c) The Administrative Agent and the Lenders shall have received all
fees and other amounts due and payable on the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder;

40

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

 

          (d) The Lenders shall have received (i) satisfactory audited
consolidated financial statements of the Borrower (and its predecessor entity)
for the three most recent fiscal years ended prior to the Effective Date as to
which such financial statements are available, (ii) satisfactory unaudited
interim consolidated financial statements of the Borrower for each fiscal
quarterly period ended subsequent to the date of the latest financial statements
delivered pursuant to clause (i) of this paragraph as to which such financial
statements are available, (iii) pro forma consolidated financial statements as
of the Effective Date of the Borrower and its Subsidiaries for the most recent
fiscal year after giving effect to the Loans made under this Agreement and
(iv) projections prepared by the Borrower of its balance sheet, income
statements, Consolidated Leverage Ratio and the Consolidated Interest Coverage
Ratio for the term of this Agreement;
          (e) The Administrative Agent (or its counsel) shall have received
certified copies of the resolutions of (i) the Board of Directors of the General
Partner, as general partner of and on behalf of the Borrower, authorizing the
execution, delivery and performance of this Agreement and the execution,
issuance, delivery and performance of its Notes and (ii) the Board of Directors
of and on behalf of each Subsidiary that is a guarantor, authorizing the
execution, delivery and performance under the Guaranty Agreement;
          (f) The Administrative Agent (or its counsel) shall have received
certificates of responsible officers of the General Partner, as general partner
and on behalf of the Borrower, to the effect that:
          (i) the representations and warranties contained in ARTICLE III are
true and accurate on and as of the date of the making of each such Loan as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date); and
          (ii) no event has occurred and is continuing or would result from the
proposed Borrowing, which constitutes an Event of Default or a Default.
          (g) The Administrative Agent (or its counsel) shall have received an
opinion:
          (i) of Vinson & Elkins LLP, special counsel to the Borrower, in form
and substance reasonably acceptable to the Administrative Agent and its counsel;
and
          (ii) of an associate general counsel or the general counsel of the
Borrower, in form and substance reasonably acceptable to the Administrative
Agent and its counsel;
          (h) There shall not have occurred a Material Adverse Change;
          (i) The Lenders shall have received such documents and other
instruments as are customary for transactions of this type or as they or their
counsel may reasonably request;

41

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

 

          (j) The Administrative Agent (or its counsel) shall have received a
certificate of a responsible officer of the Borrower relating to the USA Patriot
Act; and
          (k) The Administrative Agent shall be reasonably satisfied that, as of
the Effective Date, after giving pro forma effect to the Loans made under this
Agreement, the Consolidated Leverage Ratio of the Borrower and its Subsidiaries
will not exceed 3.00 to 1.00.
     Section 7.02 Additional Conditions Precedent to the Loans. The obligation
of each Lender to make its Loan is subject to the further conditions precedent
that, on the Effective Date, Section 7.01(f)(i) and Section 7.01(f)(ii) shall be
true with respect to such Loan, and the Borrowing shall be deemed to constitute
a certification by the Borrower that such statements are true.
ARTICLE VIII
EVENTS OF DEFAULT
     Section 8.01 Events of Default. If one or more of the following events of
default (“Events of Default”) shall occur and be continuing:
          (a) the Borrower shall default in any payment of principal of any Loan
when and as the same shall become due and payable, or the Borrower shall default
in any payment of interest on any Loan, or in the payment of any fees or other
amounts, when and as the same shall become due and payable, and such default
shall continue for a period of three (3) Business Days;
          (b) any representation or warranty, or certification made by the
Borrower herein or any Subsidiary that is a guarantor under the Guaranty
Agreement or any statement or representation or certification made or deemed to
be made pursuant to ARTICLE III, ARTICLE VII or the Guaranty Agreement shall
prove to have been incorrect in any material respect when made;
          (c) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 4.02(a) or Section 4.04 applicable
to it or ARTICLE VI required to be observed or performed by the Borrower;
          (d) the Borrower shall default in the performance of any other term,
condition, covenant or agreement contained in this Agreement (except as set
forth in Section 8.01(a) or Section 8.01(c)) required to be performed by it and
such default shall continue unremedied for a period of thirty (30) days after
written notice thereof, specifying such default and requiring it to be remedied,
shall have been received by the Borrower from any Lender;
          (e) the Borrower or any Material Subsidiary shall (i) default in the
payment of principal of any Indebtedness in an aggregate principal amount in
excess of $10,000,000 (other than the Loans) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created as and when the same shall become due and payable whether at maturity,
upon redemption, by declaration

42

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

 

or otherwise, or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, and such
default shall have resulted in such Indebtedness being declared due and payable
prior to its stated maturity;
          (f) the Borrower or any Material Subsidiary shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of its property, (ii) admit in
writing its inability to pay its debts as such debts become due, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under any Bankruptcy Law, (v) file a petition seeking to take advantage of
any other law providing for similar relief of debtors, or (vi) consent or
acquiesce in writing to any petition duly filed against it in any involuntary
case under any Bankruptcy Law;
          (g) a proceeding or case shall be commenced, without the application
or consent of the Borrower or any Material Subsidiary, in any court of competent
jurisdiction seeking (i) its liquidation, reorganization, dissolution or winding
up, or the composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of it or of its assets, or
(iii) similar relief in respect of it, under any law providing for the relief of
debtors, and such proceeding or case shall continue undismissed, or unstayed and
in effect, for a period of sixty (60) days (or such longer period, so long as
the Borrower or any such Material Subsidiary shall be taking such action in good
faith as shall be reasonably necessary to obtain the timely dismissal or stay of
such proceeding or case); or an order for relief shall be entered in an
involuntary case under any applicable Bankruptcy Law, against the Borrower or
any such Subsidiary;
          (h) there is entered against the Borrower or any Material Subsidiary
one or more final non-appealable judgments for the payment of money in an
aggregate amount in excess of $25,000,000 (net of insurance coverage which is
reasonably expected to be paid by the insurer), and the same shall remain
undischarged for a period of sixty (60) consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any
Material Subsidiary to enforce any such judgment;
          (i) the Loan Documents after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms
against the Borrower or a Guarantor (other than a Subsidiary that is not a
Material Subsidiary) party thereto or shall be repudiated by any of them, or
cease to create a valid and perfected Lien of the priority required thereby on
any of the collateral purported to be covered thereby, except to the extent
permitted by the terms of this Agreement, or the Borrower or any Subsidiary or
any of their Affiliates shall so state in writing.
          (j) an ERISA Event shall have occurred that, when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in a liability which would have a Material Adverse Change; or

43

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

 

          (k) any Change of Control shall occur,
then and in each and every case the Majority Lenders, by notice in writing to
the Borrower, may declare the unpaid balance of the Loans and any other amounts
payable hereunder to be forthwith due and payable and thereupon such balance
shall become so due and payable without presentation, protest or further demand
or notice of any kind, all of which are hereby expressly waived; provided that
in the case of Section 8.01(f) or (g) above, the Loans and any other amounts
payable hereunder shall forthwith be due and payable.
ARTICLE IX
THE AGENTS
     Section 9.01 Powers. Each Lender hereby irrevocably appoints and authorizes
the Administrative Agent to act as its agent hereunder. The Administrative Agent
shall have and may exercise such powers hereunder and under any agreement
executed and delivered pursuant to the terms hereof as are specifically
delegated to the Administrative Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto. The Administrative Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement, and shall not by reason of this Agreement have a fiduciary
relationship with any Lender.
     Section 9.02 Agent’s Reliance, Etc. Neither the Administrative Agent nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by any of them hereunder or under any
agreement executed and delivered pursuant to the terms hereof or in connection
herewith or therewith except for their own gross negligence or willful
misconduct.
     Section 9.03 No Responsibility for Recitals, Etc. The Administrative Agent
shall not be responsible to the Lenders for any recitals, statements, warranties
or representations herein or under any agreement executed and delivered pursuant
to the terms hereof, for the value, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, the Notes or any agreement executed and
delivered pursuant hereto or be bound to ascertain or inquire as to the
performance or observance of any of the terms of this Agreement on the part of
the Borrower or of any of the terms of any such other agreement by any party
thereto.
     Section 9.04 Right to Indemnity. The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder or under any
agreement executed and delivered pursuant to the terms hereof unless it shall
first be indemnified (upon requesting such indemnification) to its satisfaction
by the Lenders against any and all liability and expense which it may incur by
reason of taking or continuing to take any such action. The Lenders agree to
indemnify the Administrative Agent, to the extent not reimbursed by the
Borrower, under this Agreement, ratably in accordance with the aggregate
Principal Amount of the Loans made by them for any and all liabilities,
obligations, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent as agent in any way
relating to or arising out of this Agreement, the Notes or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
(including the costs and expenses which the Borrower is obligated to pay under
this Agreement but excluding, unless an Event of Default has

44

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

 

occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided no such
liability, obligation, damage, penalty, action, judgment, suit, cost, expense or
disbursement results from the Administrative Agent’s gross negligence or willful
misconduct; provided, however, that, in the event the Administrative Agent
receives indemnification from the Lenders hereunder with respect to costs and
expenses which the Borrower is obligated to pay under this Agreement, the
Administrative Agent shall remit to the Lenders the amount of such costs and
expenses to the extent subsequently paid by the Borrower, such remittance to be
in accordance with the proportionate amount of the indemnification made by each
respective Lender.
     Section 9.05 Action on Instructions of Lenders. The Administrative Agent
shall in all cases be fully protected in acting or refraining from acting
hereunder or under any agreement executed and delivered pursuant to the terms
hereof in accordance with written instructions to it signed by the Majority
Lenders, and (subject to Section 9.01) such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders.
     Section 9.06 Employment of Agents. The Administrative Agent may employ
agents and attorneys-in-fact and shall not be answerable, except as to money or
securities received by them or their authorized agents, for the default or
misconduct of any such agent or attorney-in-fact selected by it with reasonable
care.
     Section 9.07 Reliance on Documents. The Administrative Agent shall be
entitled to rely upon (a) any paper or document believed by it to be genuine and
to have been signed or sent by the proper person or persons, and (b) the opinion
of its counsel with respect to legal matters. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Administrative Agent signed by such payee shall have been filed with the
Administrative Agent.
     Section 9.08 Rights as a Lender. With respect to its Commitment and the
Loans made by it, the Administrative Agent shall have the same rights and powers
hereunder and under any agreement executed and delivered pursuant to the terms
hereof as any Lender, and may exercise the same as though it were not the
Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
context otherwise indicates, include the Administrative Agent in its capacity as
a Lender hereunder and thereunder. The Administrative Agent and its respective
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking or trust business with the Borrower, the Subsidiaries and their
respective Affiliates as if it were not the Administrative Agent.
     Section 9.09 Non-Reliance on Agents or other Lenders. Each Lender agrees
that it has, independently and without reliance on the Administrative Agent or
on any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Borrower and decision to
enter into this Agreement and that it will, independently and without reliance
upon any Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or the Notes. The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the

45

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

 

Borrower of this Agreement, the performance or observation by any guarantor
under the Guaranty Agreement or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
such party that is a guarantor under the Guaranty Agreement. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall have no duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or which
may at any time come into possession of any Agent or any of their respective
Affiliates.
     Section 9.10 Events of Default. If the Administrative Agent receives actual
knowledge of an Event of Default hereunder, such Agent shall promptly inform the
Lenders thereof. The Administrative Agent shall not be deemed to have actual
knowledge of an Event of Default hereunder until it shall have received a
written notice from the Borrower or any Lender referring to this Agreement,
describing such Event of Default and stating that such notice is a “Notice of
Default.”
     Section 9.11 Successor Agent. Subject to the appointment and acceptance of
a successor Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Majority Lenders shall have the right,
in consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after such retiring Administrative Agent gives notice
of its resignation, then such retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent which shall be a bank with
an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as the Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of such retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After an
Administrative Agent’s resignation hereunder, the provisions of this ARTICLE IX
and Section 10.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as the Administrative Agent hereunder.
     Section 9.12 Arrangers and Other Agents. Nothing contained in this
Agreement shall be construed to impose any obligation or duty whatsoever on any
Persons named on the cover of this Agreement or elsewhere in this Agreement as
Arrangers, as Syndication Agent, or as Documentation Agent, other than those
applicable to all Lenders as such.
ARTICLE X
MISCELLANEOUS
     Section 10.01 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

46

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

 

          (a) if to the Borrower, to it at 1201 Lake Robbins Drive, The
Woodlands, Texas 77380, Attention of the Senior Vice President and Chief
Financial Officer, Facsimile No. (832) 636-0278; messenger delivery to 1201 Lake
Robbins Drive, The Woodlands, Texas 77380;
          (b) if to the Administrative Agent, to Wells Fargo Bank, National
Association, Houston Energy Group, 1000 Louisiana Street, 9th Floor, Houston,
Texas 77002, Attention of Will Rogers, Facsimile No.: (713) 739-1087; or
          (c) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
     Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
     Section 10.02 Waivers; Amendments.
          (a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, to the fullest extent permitted by applicable law, the making of a
Loan shall not be construed as a waiver of any Event of Default, regardless of
whether the Administrative Agent or any Lender may have had notice or knowledge
of such Event of Default at the time.
          (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Majority Lenders or by the Borrower and the
Administrative Agent with the consent of the Majority Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce any Principal Amount or reduce the
rate of interest thereon without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of any Principal Amount or
any interest thereon, or reduce the amount of, waive or excuse any such payment,
without the written consent of each Lender affected thereby, (iv) change
Section 2.13(a) or Section 2.13(c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, (v) change Section 7.01, without the consent of each Lender,
(vi) release any Guarantor (except as set forth in Section 4.06 and the Guaranty
Agreement) or (vii) change any of the provisions of

47

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

 

this Section or the definition of “Majority Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent hereunder without the prior written consent of the
Administrative Agent.
     Section 10.03 Expenses; Indemnity; Damage Waiver.
          (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication (prior to the Effective Date) of the
credit facilities provided for herein, the preparation, execution, delivery and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated but subject to the cap on legal expenses agreed
with the Administrative Agent), and (ii) all reasonable out-of-pocket expenses
incurred by the Administrative Agent or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made hereunder, including all such reasonable out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans. Notwithstanding anything to the contrary, the Borrower shall not have any
obligation to pay the fees or expenses of any Lender or the Administrative Agent
in connection with any assignment of, or the grant of any participation in, any
rights of a Lender under or in connection with this Agreement; provided that the
provisions of this sentence shall not apply to any Lender substituted for a
Defaulting Lender pursuant to Section 10.13 (b) and (c).
          (b) The Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, penalties, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or the use of the proceeds therefrom, (iii) any actual or alleged presence or
release of hazardous materials on or from any property owned or operated by the
Borrower or any Subsidiary, or any environmental liability related in any way to
the Borrower or any Subsidiary, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, penalties, claims,
damages, liabilities or related expenses either (i) did not result directly or
indirectly from

48

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

 

the action or inaction of the Borrower or any Subsidiary, or (ii) resulted from
the gross negligence, unlawful conduct or willful misconduct of such Indemnitee.
          (c) To the extent that the Borrower fails to pay any amount required
to be paid by them to the Administrative Agent under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative Agent
such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against Administrative Agent in its capacity as such.
          (d) All amounts due under this Section shall be payable promptly after
written demand therefor together with a copy of the invoice(s) or other
documentation setting forth in reasonable detail the amount demanded and the
matter(s) to which it relates.
     Section 10.04 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 (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder except with the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. 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 paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of the Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
          (b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (other than the Borrower
or its Affiliates) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Loans at the time owing to it) with
the prior written consent (such consent not to be unreasonably withheld or
delayed) of:
          (A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender or, if an Event
of Default under Section 8.01(a), (b), (g), (h) or (i) has occurred and is
continuing, any other assignee; and
          (B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of any Loans to an
assignee that is a Lender immediately prior to giving effect to such assignment
or an Affiliate of a Lender.

49

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

 

          (ii) Assignments shall be subject to the following additional
conditions:
          (A) except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender’s Loan, the amount of the Loan of the assigning Lender 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) shall not
be less than $10,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default under Section 8.01(a), (b), (g), (h) or (i) has
occurred and is continuing;
          (B) 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 and, unless each of the Borrower and the Administrative Agent
otherwise consent, shall result in the assigning Lender having no less than
$10,000,000 in Loans after giving effect to such assignment;
          (C) 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; and
          (D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
          (iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(v) of this Section, from and after the effective date specified in
each Assignment and Assumption the assignee thereunder shall be a party hereto
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 Section 2.14, Section 2.16, Section 2.21 and Section 10.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 10.04 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 paragraph (c) of this Section.
          (iv) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain 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 principal amount of the Loans owing to, each Lender pursuant to
the terms hereof from time to time (the “Register”). The entries in the Register
shall be prima facie evidence of the existence and amounts of the obligations
recorded therein, and the Borrower, the

50

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

 

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.
          (v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph
(b)(ii)(C) of this Section and any written consent to such assignment required
by paragraph (b)(i) of this Section and upon satisfaction of the additional
conditions set forth in paragraph (b)(ii) of this Section, the Administrative
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register maintained at the New York office of the
Administrative Agent. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the applicable Register as provided in
this paragraph.
          (c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
other than the Borrower or its Affiliates (a “Participant”) in all or a portion
of such Lender’s rights and obligations under this Agreement (including all or a
portion of the Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) 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,
modification or waiver described in the first proviso to Section 10.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Section 2.14, Section 2.16 and Section 2.21 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. Notwithstanding anything to the contrary, unless otherwise
contractually agreed, no Participant shall be entitled to the benefits of
Section 10.08 as though it were a Lender.
     (ii) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or Section 2.16 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 2.16 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 2.16(e) and Section 2.16(g) as though it were a Lender.

51

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

 

          (d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank in accordance with Regulation A of the Board, and to a
trustee for the benefit of holders of debt securities issued by such Lender, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
     Section 10.05 Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid. The provisions of Section 2.14, Section 2.16, Section 2.21,
Section 10.03, this Section 10.05, and ARTICLE IX shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans or the termination of this
Agreement or any other provision hereof.
     Section 10.06 Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 7.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
     Section 10.07 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
     Section 10.08 Right of Setoff. If (a) an Event of Default shall have
occurred and be continuing, and (b) the principal of the Loans has been
accelerated each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and

52

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

 

apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other obligations at any time owing by such Lender
to or for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have. Any
Lender exercising a right of set off under this Section 10.08 shall promptly
notify the Administrative Agent of such action.
     Section 10.09 Governing Law; Jurisdiction; Consent to Service of Process.
          (a) THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
          (b) Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the courts of
the Supreme Court of the State of New York, sitting in New York County and of
the United States District Court of the Southern District of New York, and any
appellate court from either thereof, in any action or proceeding arising out of
or relating to this Agreement, the Notes, or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent,
any of the other agents or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in
the courts of any jurisdiction.
          (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
     Section 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS

53

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

 

AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
     Section 10.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
     Section 10.12 Confidentiality. 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 who have a reason to use such Information in connection with
the administration of this Agreement (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 and will agree
to use the Information solely for the purpose of such administration), (b) to
the extent requested by any regulatory authority or any self-regulatory body
having authority to regulate or oversee any aspect of any Lender’s (or any
Affiliate of such Lender) business or property, (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 any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, or to any counterparty
(or its advisor) to any swap, securitization, or derivative transaction
referencing or involving any of its rights or obligations under this Agreement,
(g) with the consent of the Borrower, or (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
non-confidential basis from a source other than the Borrower or any of its
Affiliates. For the purposes of this Section, “Information” means all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to the Administrative Agent or
any Lender on a non-confidential basis prior to disclosure by the Borrower;
provided that, in the case of information received from the Borrower after the
Effective Date, such information is clearly identified 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.
     Section 10.13 Termination and Substitution of Lender.
          (a) If (i) the obligation of any Lender to continue Loans as
Eurodollar Loans has been suspended pursuant to Section 2.15 or (ii) any Lender
has demanded compensation under Section 2.14 or Section 2.16, then the Borrower
may, upon three Business Days’ notice to such Lender through the Administrative
Agent, prepay in full all of the outstanding Loans of such Lender, or its
assignee, together with accrued interest thereon to the date of prepayment and
all other amounts payable hereunder to such Lender accrued to the date of
prepayment, and concurrently therewith terminate this Agreement

54

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

 

with respect to such Lender by giving notice of such termination to the
Administrative Agent and such Lender.
          (b) So long as no Default or Event of Default has occurred and is
continuing, if any Lender shall become a Defaulting Lender, the Borrower may, in
its sole discretion and without prejudice to any right or remedy that the
Borrower may have against such Defaulting Lender with respect to, on account of,
arising from or relating to any event pursuant to which such Lender shall be a
Defaulting Lender, upon notice to such Defaulting Lender and the Administrative
Agent, (i) if at such time there are no Loans of such Defaulting Lender
outstanding, terminate this Agreement with respect to such Defaulting Lender, or
(ii) if at such time such Defaulting Lender shall have its Loan outstanding,
subject to obtaining a substitute lender or lenders to assume the Loan of such
Defaulting Lender pursuant to subsection (c) below, terminate this Agreement
with respect to such Defaulting Lender and prepay in full the outstanding Loan
of such Defaulting Lender together with accrued interest to the date of
prepayment and any other amounts due such Defaulting Lender under the Loan
Documents, provided that the provisions of Section 2.19 shall not apply to any
such prepayment.
          (c) If the Borrower elects to terminate this Agreement with respect to
any Lender under Section 10.13(b)(ii), the Borrower shall cooperate in good
faith with the Administrative Agent, to seek a mutually satisfactory substitute
lender or lenders (which may be one or more of the Lenders) to assume the
Commitment and/or Loan of such relevant Lender and until a substitute lender (or
lenders) has been found and documents reasonably acceptable to each of the
substitute lender or lenders, the Administrative Agent and the Borrower have
been executed to provide for the assignment of the rights and obligations of the
Defaulting Lender to the substitute lender or lenders in accordance with
Section 10.04. If the Borrower elect to terminate this Agreement with respect to
any Lender under Section 10.13(a)(i) or (ii), the total Commitments hereunder
shall be reduced by an amount equal to such terminated Lender’s Commitment.
     Section 10.14 USA Patriot Act Notice. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “USA Patriot Act”), it
is required to obtain, verify and record information that identifies the
Borrower and its Subsidiaries, which information includes the name and address
of the Borrower and such Subsidiaries and other information that will allow such
Lender to identify the Borrower and such Subsidiaries in accordance with the USA
Patriot Act.
[SIGNATURES BEGIN ON NEXT PAGE]

55

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

 

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

              BORROWER:   WESTERN GAS PARTNERS, LP    
 
           
 
  By:   Western Gas Holdings, LLC,    
 
      its general partner    
 
           
 
  By:   /s/ Donald R. Sinclair    
 
           
 
  Name:   Donald R. Sinclair    
 
  Title:   President and Chief Executive Officer    

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

              ADMINISTRATIVE AGENT:   WELLS FARGO BANK, NATIONAL
ASSOCIATION    
 
           
 
  By:   /s/ William Rogers    
 
           
 
  Name:   William Rogers    
 
  Title:   Managing Director    

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

              LENDER:   WELLS FARGO BANK, NATIONAL
ASSOCIATION    
 
           
 
  By:   /s/ William Rogers    
 
           
 
  Name:   William Rogers    
 
  Title:   Managing Director    

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

              LENDER:   DNB NOR BASK ASA, NEW YORK BRANCH    
 
           
 
  By:   /s/ Barbara Gronquist    
 
           
 
  Name:   Barbara Gronquist    
 
  Title:   Senior Vice President    
 
           
 
  By:   /s/ Nikolai A. Nachamkin    
 
           
 
  Name:   Nikolai A. Nachamkin    
 
  Title:   Senior Vice President    

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

              LENDER:   U.S. BANK NATIONAL ASSOCIATION    
 
           
 
  By:   /s/ Justin M. Alexander    
 
           
 
  Name:   Justin M. Alexander    
 
  Title:   Vice President    

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

              LENDER:   MORGAN STANLEY BANK, N.A.    
 
           
 
  By:   /s/ Ryan Vetsch    
 
           
 
  Name:   Ryan Vetsch    
 
  Title:   Authorized Signatory    

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

              LENDER:   BANK OF MONTREAL    
 
           
 
  By:   /s/ James V. Ducote    
 
           
 
  Name:   James V. Ducote    
 
  Title:   Director    

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

          LENDER:   BARCLAYS BANK PLC
 
       
 
  By:   /s/ Ann Sutton
 
       
 
  Name:   Ann Sutton
 
  Title:   Director

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

          LENDER:   DEUTSCHE BANK AG NEW YORK BRANCH
 
       
 
  By:   /s/ Andreas Neumeier
 
       
 
  Name:   Andreas Neumeier
 
  Title:   Managing Director
 
       
 
  By:   /s/ Ming K. Chu
 
       
 
  Name:   Ming K. Chu
 
  Title:   Vice President

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

          LENDER:   ROYAL BANK OF CANADA
 
       
 
  By:   /s/ Jay T. Sartain
 
       
 
  Name:   Jay T. Sartain
 
  Title:   Authorized Signatory
 
       

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

          LENDER:   SCOTIABANC INC.
 
       
 
  By:   /s/ J.F. Todd
 
       
 
  Name:   J.F. Todd
 
  Title:   Managing Director

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

          LENDER:   UBS LOAN FINANCE LLC
 
       
 
  By:   /s/ Irja R. Otsa
 
       
 
  Name:   Irja R. Otsa
 
  Title:   Associate Director
 
       
 
  By:   /s/ April Varner-Nanton
 
       
 
  Name:   April Varner-Nanton
 
  Title:   Director

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

          LENDER:   CITIBANK, N.A.
 
       
 
  By:   /s/ K. Clinton Gerst
 
       
 
  Name:   K. Clinton Gerst
 
  Title:   Attorney-In-Fact

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

          LENDER:   COMERICA BANK
 
       
 
  By:   /s/ Paul Edmonds
 
       
 
  Name:   Paul Edmonds
 
  Title:   Vice President

[Signature Page — $250,000,000 Term Loan Agreement]

 

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

 

ANNEX I
LIST OF COMMITMENTS

                      Commitment/             Amount of     Percentage of  
Lenders   Term Loan     Term Loans  
Wells Fargo Bank, National Association
  $ 35,000,000       14.00 %
DnB NOR Bank ASA, New York Branch
  $ 35,000,000       14.00 %
U.S. Bank National Association
  $ 18,000,000       7.20 %
Morgan Stanley Bank, N.A.
  $ 18,000,000       7.20 %
Bank of Montreal
  $ 18,000,000       7.20 %
Barclays Bank PLC
  $ 18,000,000       7.20 %
Deutsche Bank AG New York Branch
  $ 18,000,000       7.20 %
Royal Bank of Canada
  $ 18,000,000       7.20 %
SCOTIABANC INC.
  $ 18,000,000       7.20 %
UBS Loan Finance LLC
  $ 18,000,000       7.20 %
Citibank, N.A.
  $ 18,000,000       7.20 %
Comerica Bank
  $ 18,000,000       7.20 %
 
           
Totals
  $ 250,000,000       100.00 %
 
           

Annex I-1
Commitments

 

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

 

SCHEDULE I
PRICING SCHEDULE
Prior to Borrower obtaining a rating on its senior unsecured non-credit enhanced
publicly held indebtedness of BBB-/Baa3 or higher from S&P, Moody’s or Fitch and
a rating not less than BB+/Ba1 from at least one other such agency, pricing
shall be based upon the Consolidated Leverage Ratio as follows:

                                      Eurodollar   Base Rate Level  
Consolidated Leverage Ratio   Margin   Margin   I    
Less than 2.50 to 1.00
    2.500 %     1.500 % II  
Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00
    2.750 %     1.750 % III  
Greater than or equal to 3.00 to 1.00 but less than 4.00 to 1.00
    3.000 %     2.000 % IV  
Greater than or equal to 4.00 to 1.00
    3.500 %     2.500 %

The applicable interest Margins shall be based on the applicable Level of the
Pricing Grid based on the calculation of the Total Leverage Ratio set forth in
the compliance certificate delivered on the Effective Date until the first
calculation date following the receipt by the Administrative Agent and the
Lenders of the financial information and related compliance certificate for the
first full fiscal quarter ending after the Effective Date.
On and after the date on which the Borrower obtains such ratings, pricing shall
be based upon the Borrower’s rating on its senior unsecured non-credit enhanced
publicly held indebtedness as follows:

                        Senior Unsecured   Eurodollar   Base Rate           Debt
Rating   Margin   Margin
> BBB+ / Baa1
    2.000 %     1.000 %
BBB / Baa2
    2.250 %     1.250 %
BBB- / Baa3
    2.500 %     1.500 %
< BBB- / Baa3
    3.000 %     2.000 %

If there are at least two ratings from S&P, Moody’s or Fitch, then if the
highest and lowest ratings are different by one notch, the highest rating will
govern and if there is a two notch or greater difference between the highest and
the lowest rating, then the governing rating will be one level better than the
lowest rating. If the Borrower ceases to have senior unsecured non-credit
enhanced publicly held indebtedness which is rated by at least two of S&P,
Moody’s and Fitch, then from and after the date on which the Borrower ceases to
have such indebtedness so rated, pricing shall be based on the first table in
this pricing schedule.
Schedule I
Pricing Schedule

 

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

 

SCHEDULE II
SUBSIDIARIES
Anadarko Gathering Company, LLC
     a Delaware limited liability company,
Kerr-McGee Gathering LLC
     a Colorado limited liability company,
MIGC, LLC
     a Delaware limited liability company,
Pinnacle Gas Treating, LLC
     a Texas limited liability company,
Western Gas Operating, LLC
     a Delaware limited liability company,
Western Gas Partners Finance Corporation,
     a Delaware corporation
Western Gas Wyoming LLC
     a Wyoming limited liability company,
WGR Operating, LP
     a Delaware limited partnership,
Schedule II
Subsidiaries

 

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

 

SCHEDULE III
AFFILIATE AGREEMENTS

1.   Contribution, Conveyance and Assumption Agreement by and among Western Gas
Partners, LP, Western Gas Holdings, LLC, Anadarko Petroleum Corporation, WGR
Holdings, LLC, Western Gas Resources, Inc., WGR Asset Holding Company LLC,
Western Gas Operating, LLC and WGR Operating, LP, dated as of May 14, 2008.   2.
  Contribution Agreement, dated as of November 11, 2008, by and among Western
Gas Resources, Inc., WGR Asset Holding Company LLC, WGR Holdings, LLC, Western
Gas Holdings, LLC, Western Gas Partners, LP, Western Gas Operating, LLC and WGR
Operating, LP.   3.   Contribution Agreement, dated as of July 10, 2009, by and
among Western Gas Resources, Inc., WGR Asset Holding Company LLC, Anadarko
Uintah Midstream, LLC, WGR Holdings, LLC, Western Gas Holdings, LLC, WES GP,
Inc., Western Gas Partners, LP, Western Gas Operating, LLC and WGR Operating,
LP.

4.   Contribution Agreement, dated as of January 29, 2010, by and among Western
Gas Resources, Inc., WGR Asset Holding Company LLC, Mountain Gas Resources LLC,
WGR Holdings, LLC, Western Gas Holdings, LLC, WES GP, Inc., Western Gas
Partners, LP, Western Gas Operating, LLC and WGR Operating, LP.

5.   Contribution Agreement, dated as of May 27, 2010 by and among Western Gas
Resources, Inc., WGR Asset Holding Company LLC, WGR Holdings, LLC, Western Gas
Holdings, LLC, WES GP, Inc., Western Gas Partners, LP, Western Gas Operating LLC
and WGR Operating, LP.

6.   First Amended and Restated Agreement of Limited Partnership of Western Gas
Partners, LP, dated May 14, 2008.

7.   Amendment No. 1 to First Amended and Restated Agreement of Limited
Partnership of Western Gas Partners, LP, dated as of December 19, 2008.

8.   Amendment No. 2 to First Amended and Restated Agreement of Limited
Partnership of Western Gas Partners, LP, dated as of April 15, 2009.

9.   Amendment No. 3 to First Amended and Restated Agreement of Limited
Partnership of Western Gas Partners, LP dated July 22, 2009.

10.   Amendment No. 4 to First Amended and Restated Agreement of Limited
Partnership of Western Gas Partners, LP dated January 29, 2010.

11.   Amended and Restated Limited Liability Company Agreement of Western Gas
Holdings, LLC, dated as of May 14, 2008.

Schedule III
Affiliate Agreements

 

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

 

12.   Term Loan Agreement due 2013 dated as of December 19, 2008 by and between
Anadarko Petroleum Corporation and Western Gas Partners, LP.

13.   Omnibus Agreement by and among Western Gas Partners, LP, Western Gas
Holdings, LLC and Anadarko Petroleum Corporation, dated as of May 14, 2008.

14.   Amendment No. 1 to Omnibus Agreement by and among Western Gas Partners,
LP, Western Gas Holdings, LLC, and Anadarko Petroleum Corporation, dated as of
December 19, 2008.

15.   Amendment No. 2 to Omnibus Agreement by and among Western Gas Partners,
LP, Western Gas Holdings, LLC, and Anadarko Petroleum Corporation, dated as of
July 22, 2009.

16.   Amendment No. 3 to Omnibus Agreement by and among Western Gas Partners,
LP, Western Gas Holdings, LLC, and Anadarko Petroleum Corporation, dated as of
December 31, 2009.

17.   Amendment No. 4 to Omnibus Agreement by and among Western Gas Partners,
LP, Western Gas Holdings, LLC, and Anadarko Petroleum Corporation, dated as of
January 29, 2010.

18.   Tax Sharing Agreement by and among Anadarko Petroleum Corporation and
Western Gas Partners, LP, dated as of May 14, 2008.

19.   Services and Secondment Agreement between Western Gas Holdings, LLC and
Anadarko Petroleum Corporation dated May 14, 2008.

20.   Anadarko Petroleum Corporation Fixed Rate Note due 2038.

21.   Working Capital Loan Agreement between Anadarko Petroleum Corporation and
Western Gas Partners, LP, dated as of May 25, 2010.

22.   Revolving Credit Agreement, dated as of March 4, 2008, by and among
Anadarko Petroleum Corporation, Western Gas Partners, LP, JPMorgan Chase Bank,
N.A., The Royal Bank of Scotland, PLC, BNP Paribas, Bank of America, N.A., BMO
Capital Markets Financing, Inc., The Bank of Tokyo-Mitsubishi UFJ, LTD., and
each of the Lenders named therein.

23.   Gas Processing Agreement between Chipeta Processing LLC and Kerr-McGee Oil
& Gas Onshore LP.

24.   Amended and Restated Limited Liability Company Agreement of Chipeta
Processing LLC.

Schedule III
Affiliate Agreements

 

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

 

25.   Dew Gas Gathering Agreement between Anadarko Gathering Company LLC and
Anadarko Petroleum Corporation.

26.   Haley Gas Gathering Agreement between Anadarko Gathering Company LLC and
Anadarko Petroleum Corporation.

27.   Hugoton Gas Gathering Agreement between Anadarko Gathering Company LLC and
Anadarko Petroleum Corporation.

28.   Pinnacle Gas Gathering Agreement between Pinnacle Gas Treating LLC and
Anadarko Petroleum Corporation.

29.   Indemnification Agreements (the form of which is on file with the
Securities and Exchange Commission) by and between Western Gas Holdings, LLC,
its Officers and Directors.

30.   Western Gas Partners, LP 2008 Long-Term Incentive Plan.

31.   Amended and Restated Western Gas Holdings, LLC Equity Incentive Plan.

Schedule III
Affiliate Agreements

 

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

 

EXHIBIT A
FORM OF NOTE
                                        , 20                    
     For value received, Western Gas Partners LP, a limited partnership formed
under the laws of the State of Delaware (the “Borrower”), promises to pay to the
order of (the “Lender”) at the office of Wells Fargo Bank, National Association
specified in Section 2.13(a) of the Term Loan Agreement, dated as of August 2,
2010, among the Borrower, the Lender, the several other banks party thereto,
Wells Fargo Bank, National Association, as Administrative Agent, the Document
Agent named therein, and the Syndication Agent named therein, (as may be
amended, supplemented or modified from time to time hereafter, the “Agreement;”
terms defined in the Agreement shall have their defined meanings when used in
this Note), in lawful money of the United States of America the principal amount
of                                       
*                      DOLLARS ($                
                        *                    ) or, if less than such principal
amount, the aggregate unpaid principal amount of all Loans made by the Lender to
the undersigned pursuant to Section 2.01 of the Agreement. Such principal shall
be payable on the date or dates specified in Section 2.02 of, or elsewhere in,
the Agreement.
     The undersigned further agrees to pay interest at said office, in like
money, on the unpaid principal amount owing hereunder from time to time from the
Effective Date at the rates specified in Section 2.10 of the Agreement. Such
interest shall be payable on the dates specified in Section 2.10 of the
Agreement. The date, Type, Tranche and amount of each Loan made by the Lender
pursuant to Section 2.01 of the Agreement, each continuation of all or a portion
thereof to another Type and the date and amount of each payment of principal
with respect thereto shall be endorsed by the holder of this Note on Schedule A
annexed hereto, which holder may add additional pages to such Schedule. No
failure to make or error in making any such endorsement as authorized hereby
shall affect the validity of the obligations of the Borrower hereunder or the
validity of any payment hereof made by the Borrower.
     This Note is one of the Notes referred to in the Agreement and is entitled
to the benefits thereof and is subject to prepayment in whole or in part as
provided therein.
     Upon the occurrence of any one or more of the Events of Default specified
in the Agreement, all amounts then remaining unpaid on this Note may be declared
to be immediately due and payable as provided in the Agreement.
     THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
Exhibit A-1
Form of Note

 

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

 

              WESTERN GAS PARTNERS, LP
 
       
 
  By:   Western Gas Holdings, LLC,
 
  its general partner  
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

Exhibit A-2
Form of Note

 

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

 

SCHEDULE A
LOANS AND REPAYMENTS

                              Amount of     Amount of Loan   Type of Loan  
Interest Rate   Principal Repair   Notation Made by                  

Exhibit A-3
Form of Note

 

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

 

EXHIBIT B
[FORM OF] ASSIGNMENT AND ASSUMPTION
     Reference is made to the Term Loan Agreement dated as of August 2, 2010 (as
amended and in effect on the date hereof, the “Credit Agreement”), among Western
Gas Partners, LP, the Lenders named therein, Wells Fargo Bank, National
Association, as Administrative Agent, the Documentation Agent named therein, and
the Syndication Agent named therein. Terms defined in the Credit Agreement are
used herein with the same meanings.
     The Assignor named as such below hereby sells and assigns, without
recourse, to the Assignee named as such on the reverse hereof, and the Assignee
hereby purchases and assumes, without recourse, from the Assignor, effective as
of the Assignment Date set forth below, the interests set forth below (the
“Assigned Interest”) in the Assignor’s rights and obligations under the Credit
Agreement, including, without limitation, the interests set forth below in the
and Loans owing to the Assignor which are outstanding on the Assignment Date,
but excluding accrued interest to and excluding the Assignment Date. The
Assignee hereby acknowledges receipt of a copy of the Credit Agreement. From and
after the Assignment Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the Assigned
Interest, have the rights and obligations of a Lender thereunder, and (ii) the
Assignor shall, to the extent of the Assigned Interest, relinquish its rights,
and be released from its obligations under the Credit Agreement arising
thereafter.
     This Assignment and Assumption is being delivered to the Administrative
Agents together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.16(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The [Assignee/Assignor] shall pay the fee payable to the
Administrative Agent pursuant to Section 10.04(b)(ii)(C) of the Credit
Agreement.
     This Assignment and Assumption shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
(“Assignor”)
Legal Name of Assignee:
(“Assignee”)
Assignee’s Address for Notices:
Effective Date of Assignment
(“Assignment Date”):
The terms set forth above and on the reverse side hereof are hereby agreed to:
Exhibit B-1
Form of Assignment and Assumption

 

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

 

              Percentage Assigned of Loans     (set forth to at least 8 decimals
    as a percentage of the Facility and Principal Amount of Loans   the
aggregate Loans of all Lenders Assigned   thereunder
$
    %  

              [Name of Assignor], as Assignor
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            [Name of Assignee], as Assignee
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

Exhibit B-2
Form of Assignment and Assumption

 

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

 

The undersigned hereby consent to the within assignment:1

              WESTERN GAS PARTNERS, LP,
as Borrower        
 
           
By:
  Western Gas Holdings, LLC,
its general partner        
 
           
By:
           
 
           
Name:
           
 
           
Title:
           
 
           
 
            WELLS FARGO BANK, NATIONAL ASSOCIATION
as Administrative Agent        
 
           
By:
           
 
           
Name:
           
 
           
Title:
           
 
           

 

1   Consents to be included to the extent required by Section 10.04(b) of the
Credit Agreement.

Exhibit B-3
Form of Assignment and Assumption

 

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

 

EXHIBIT C
FORM OF GUARANTY
Exhibit C-1
Form of Guaranty
 
 
GUARANTY
made by
EACH OF THE OBLIGORS (as defined herein)
in favor of
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Administrative Agent
Dated as of August 2, 2010
 

 

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

 

TABLE OF CONTENTS

              SECTION 1
DEFINITIONS

Section 1.01
  Defined Terms     1   SECTION 2
GUARANTY

Section 2.01
  Guaranty     2  
Section 2.02
  Right of Set-off     3  
Section 2.03
  No Subrogation     3  
Section 2.04
  Amendments, etc. with respect to the Borrower’s Obligations; Waiver of Rights
    4  
Section 2.05
  Guaranty Absolute and Unconditional     4  
Section 2.06
  Reinstatement     5  
Section 2.07
  Payments     5  
Section 2.08
  Release     5   SECTION 3
REPRESENTATIONS AND WARRANTIES

Section 3.01
  Representations and Warranties     6   SECTION 4
COVENANTS

Section 4.01
  [Intentionally Omitted]     6   SECTION 5
MISCELLANEOUS

Section 5.01
  Authority of Administrative Agent     6  
Section 5.02
  Notices     6  
Section 5.03
  Counterparts     6  
Section 5.04
  Severability     7  
Section 5.05
  Integration     7  
Section 5.06
  Amendments in Writing; No Waiver; Cumulative Remedies     7  
Section 5.07
  Loan Documents     7  
Section 5.08
  Section Headings     7  
Section 5.09
  Successors and Assigns     7  
Section 5.10
  GOVERNING LAW     7  
Section 5.11
  Submission to Jurisdiction     7  
Section 5.12
  Acknowledgments     8  
Section 5.13
  WAIVERS OF JURY TRIAL     8  
Section 5.14
  Additional Obligors     9  
SCHEDULES:
           
Schedule 1
  Address for Notices        
Schedule 2
  Form of Assumption Agreement        

 i 

 

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

 

GUARANTY
     GUARANTY, dated as of August 2, 2010, is made by each of the signatories
hereto (each of the signatories hereto, together with any other subsidiary of
the Borrower that becomes a party hereto from time to time after the date
hereof, the “Obligors”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as
administrative agent (in such capacity, the “Administrative Agent”) for the
lenders (the “Lenders”) party to the Loan Agreement.
R E C I T A L S
     The Lenders have severally agreed to make a term Loan to the Borrower upon
the terms and subject to the conditions set forth in the Term Loan Agreement
dated as of even date herewith (as such may be amended, supplemented or
otherwise modified from time to time, the “Loan Agreement”), among WESTERN GAS
PARTNERS, LP, a Delaware limited partnership (the “Borrower”), the financial
institutions now or hereafter signatory thereto (the “Lenders”), the
Administrative Agent for the Lenders, and the other Agents and Lenders party
thereto.
     The Obligors are each direct or indirect subsidiaries of the Borrower.
     The Borrower and the Obligors are engaged in related businesses, and
therefore each Obligor will derive substantial direct and indirect benefit from
the making of the term Loans to the Borrower under the Loan Agreement.
     The Loans are necessary and convenient to the conduct, promotion and
attainment of the business of the Borrower and each Obligor.
     It is a condition precedent to the obligation of the Lenders to make their
respective term Loan to the Borrower under the Loan Agreement that each Obligor
shall have executed and delivered this Guaranty to the Administrative Agent for
the ratable benefit of the Lenders.
     Now, therefore, in consideration of the premises herein and to induce the
Administrative Agent and the Lenders to enter into the Loan Agreement and to
induce the Lenders to make their respective term Loan to the Borrower
thereunder, each Obligor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
SECTION 1
DEFINITIONS
     Section 1.01 Defined Terms. Unless otherwise defined herein, each term
defined in the Loan Agreement and used herein shall have the meaning given to it
in the Loan Agreement.
     “Assumption Agreement” means an Assumption Agreement substantially in the
form attached hereto as Schedule 2.
     “Borrower’s Obligations” means the collective reference to all obligations
of the Borrower and its Subsidiaries under the Guaranteed Documents, including,
without limitation, the unpaid principal of and interest on the Loans and all
other obligations and liabilities of the

 

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

 

Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Loan Agreement after the maturity of the Loans
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) to the Administrative Agent or any Lender,
whether 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
Guaranteed Documents, whether on account of principal, interest, reimbursement
obligations, reasonable fees, indemnities, reasonable costs, reasonable expenses
or otherwise (including, without limitation, all reasonable fees and
disbursements of counsel to the Administrative Agent or any Lender that are
required to be paid by the Borrower pursuant to the terms of any Guaranteed
Documents).
     “Guaranteed Creditor” means the collective reference to the Administrative
Agent and the Lenders.
     “Guaranteed Document” means the collective reference to this Guaranty, the
Loan Agreement, any Note, the other Loan Documents and any other document made,
delivered or given in connection with any of the foregoing.
     The words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Guaranty shall refer to this Guaranty as a whole and not to
any particular provision of this Guaranty, and section and paragraph references
are to this Guaranty unless otherwise specified.
     The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
SECTION 2
GUARANTY
     Section 2.01 Guaranty.
          (a) Subject to the provisions of Section 2.01(b), each Obligor hereby,
jointly and severally, unconditionally and irrevocably, guarantees to each
Guaranteed Creditor and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Borrower or its
Subsidiaries when due (whether at the stated maturity, by acceleration or
otherwise) of the Borrower’s Obligations.
          (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Obligor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Obligor under applicable federal and state laws relating to the
insolvency of debtors.
          (c) Each Obligor further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by any Guaranteed Creditor in enforcing,
or obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Borrower’s Obligations and/or enforcing any rights
with respect to, or collecting against, an Obligor under this Guaranty. This
Guaranty shall remain in full force and effect until the Borrower’s Obligations
are paid in full, or

-2-

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

 

until a release of this Guaranty is made pursuant to Section 2.08,
notwithstanding that from time to time prior thereto no amounts may be
outstanding under the Loan Agreement.
          (d) Each Obligor agrees that the Borrower’s Obligations may at any
time and from time to time exceed the amount of the liability of such Obligor
hereunder without impairing this Guaranty or affecting the rights and remedies
of any Guaranteed Creditor hereunder.
          (e) No payment or payments made by the Borrower, any Obligor, any
other guarantor or any other Person or received or collected by a Guaranteed
Creditor from the Borrower, an Obligor, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower’s Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Obligor hereunder which shall,
notwithstanding any such payment or payments (other than payments made by the
Borrower or an Obligor in respect of the Borrower’s Obligations or payments
received or collected from an Obligor in respect of the Borrower’s Obligations),
remain liable for the Borrower’s Obligations up to the maximum liability of any
Obligor hereunder until the Borrower’s Obligations are paid in full.
          (f) Each Obligor agrees that whenever, at any time, or from time to
time, it shall make any payment to any Guaranteed Creditor on account of its
liability hereunder, it will notify the Administrative Agent in writing that
such payment is made under this Guaranty for such purpose.
     Section 2.02 Right of Set-off. During the continuance of any Event of
Default, each Obligor hereby irrevocably authorizes each Lender at any time and
from time to time without prior notice to such Obligor, any such notice being
expressly waived by each Obligor, to set-off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final, but
excluding deposits held by such Obligor as a fiduciary for others), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender to or for the credit or the
account of such Obligor, or any part thereof in such amounts as such Lender may
elect, against and on account of the obligations and liabilities of such Obligor
to such Lender hereunder and claims of every nature and description of such
Lender against such Obligor, in any currency, whether arising hereunder, under
the Loan Agreement, any Note, any Loan Documents or otherwise, as such Lender
may elect, whether or not the Administrative Agent or any Lender has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. Such Lender shall notify the relevant Obligor and the
Administrative Agent promptly of any such set-off and the application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
subsection are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Administrative Agent or such
Lender may have.
     Section 2.03 No Subrogation. Notwithstanding any payment or payments made
by an Obligor hereunder or any set-off or application of funds of an Obligor by
any Lender, an Obligor shall not be entitled to be subrogated to any of the
rights of the Administrative Agent or any Lender against the Borrower or any
collateral security or guarantee or right of offset held by any

-3-

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

 

Lender for the payment of the Borrower’s Obligations until all amounts owing to
the Guaranteed Creditor by the Borrower or its Subsidiaries on account of the
Borrower’s Obligations are paid in full, nor shall an Obligor seek or be
entitled to seek any contribution or reimbursement from the Borrower in respect
of payments made by an Obligor hereunder until all amounts owing to the
Guaranteed Creditor by the Borrower or its Subsidiaries on account of the
Borrower’s Obligations are paid in full. If any amount shall be paid to an
Obligor on account of such subrogation rights at any time when all of the
Borrower’s Obligations shall not have been paid in full, such amount shall be
held by such Obligor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Obligor, and shall, forthwith upon receipt
by such Obligor, be turned over to the Administrative Agent in the exact form
received by such Obligor (duly indorsed by such Obligor to the Administrative
Agent, if required), to be applied against the Borrower’s Obligations, whether
matured or unmatured, in such order as the Administrative Agent may determine.
     Section 2.04 Amendments, etc. with respect to the Borrower’s Obligations;
Waiver of Rights. Each Obligor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Obligor and without notice
to or further assent by any Obligor: (a) any demand for payment of any of the
Borrower’s Obligations made by any Guaranteed Creditor may be rescinded by such
party and any of the Borrower’s Obligations continued; (b) the Borrower’s
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Guaranteed Creditor; (c) the Loan Agreement, the Notes and the other Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the Administrative Agent may deem advisable from time to time; and (d) any
collateral security, guarantee or right of offset at any time held by any
Guaranteed Creditor for the payment of the Borrower’s Obligations may be sold,
exchanged, waived, surrendered or released. No Guaranteed Creditor shall have
any obligation to protect, secure, perfect or insure any Lien at any time held
by it as security for the Borrower’s Obligations or for this Guaranty or any
property subject thereto. When making any demand hereunder against an Obligor,
the Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower, and any failure by such Guaranteed
Creditor to make any such demand or to collect any payments from the Borrower or
any release of the Borrower shall not relieve an Obligor in respect of which a
demand or collection is not made, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of any Guaranteed Creditor
against an Obligor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.
     Section 2.05 Guaranty Absolute and Unconditional. Each Obligor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower’s Obligations and notice of or proof of reliance by any Guaranteed
Creditor upon this Guaranty or acceptance of this Guaranty. The Borrower’s
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guaranty. All dealings between the Borrower and any Obligor, on the
one hand, and any Guaranteed Creditor, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty. Each Obligor waives diligence,

-4-

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

 

presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower with respect to the Borrower’s Obligations. Each Obligor
understands and agrees that this Guaranty shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity, regularity or enforceability of any Guaranteed Document, any of the
Borrower’s Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
any Guaranteed Creditor, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower against any Guaranteed Creditor, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or any Obligor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Borrower’s Obligations, or
of any Obligor under this Guaranty, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against any Obligor, each Guaranteed
Creditor may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Borrower or any other Person or against any
collateral security or guarantee for the Borrower’s Obligations or any right of
offset with respect thereto, and any failure by any Guaranteed Creditor to
pursue such other rights or remedies or to collect any payments from the
Borrower or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower or any such other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Obligor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of any Guaranteed Creditor against any Obligor.
This Guaranty shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon each Obligor and the successors and
assigns thereof, and shall inure to the benefit of each Guaranteed Creditor, and
their respective successors, indorsees, transferees and assigns, until all the
Borrower’s Obligations and the obligations of each Obligor under this Guaranty
shall have been satisfied by payment in full in cash.
     Section 2.06 Reinstatement. This Guaranty shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Borrower’s Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Obligor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Obligor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
     Section 2.07 Payments. Each Obligor hereby guarantees that payments
hereunder will be paid to the Administrative Agent, for the ratable benefit of
the Lenders, without set-off, deduction or counterclaim, in dollars, in
immediately available funds, at the offices of the Administrative Agent
specified in Section 10.01 of the Loan Agreement.
     Section 2.08 Release. Upon the earlier of (i) the Investment Grade Rating
Date and (ii) the irrevocable and indefeasible payment of the Borrower’s
Obligations, the Administrative Agent, on behalf of the Guaranteed Creditor,
shall execute a release of the Obligors from any further obligations under this
Guaranty or with regard to the Borrower’s Obligations.

-5-

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

 

SECTION 3
REPRESENTATIONS AND WARRANTIES
     Section 3.01 Representations and Warranties. Each Obligor hereby represents
and warrants that the representations and warranties set forth in Article III of
the Loan Agreement as they relate to such Obligor or to the other Loan Documents
to which such Obligor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and each Guaranteed Creditor shall be entitled
to rely on each of them as if they were fully set forth herein, provided that
each reference in each such representation and warranty to the Borrower’s
knowledge shall, for the purposes of this Section 3, be deemed to be a reference
to such Obligor’s knowledge.
     Each Obligor agrees that the foregoing representations and warranties shall
be deemed to have been made by such Obligor on the date of the Loans under the
Loan Agreement (except to the extent that such representations and warranties
are expressly made only as of an earlier date, in which case such
representations and warranties shall have been true and correct on and as of
such earlier date).
SECTION 4
COVENANTS
     Section 4.01 [Intentionally Omitted].
SECTION 5
MISCELLANEOUS
     Section 5.01 Authority of Administrative Agent. Each Obligor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guaranty with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guaranty shall, as between the Administrative Agent and the
Lenders, be governed by the Loan Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and any Obligor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting in the manner set forth in Article IX
of the Loan Agreement, and the Obligors shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
     Section 5.02 Notices. All notices and other communications provided for
herein shall be given in the manner and subject to the terms of Section 10.01 of
the Loan Agreement; provided that any such notice, request or demand to or upon
an Obligor shall be addressed to such Obligor at its notice address set forth on
Schedule 1.
     Section 5.03 Counterparts. This Guaranty may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.

-6-

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

 

     Section 5.04 Severability. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
     Section 5.05 Integration. This Guaranty represents the agreement of each
Obligor with respect to the subject matter hereof and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to the subject matter hereof not reflected herein.
     Section 5.06 Amendments in Writing; No Waiver; Cumulative Remedies.
          (a) None of the terms or provisions of this Guaranty may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by each Obligor and the Administrative Agent in accordance with
Section 10.02 of the Loan Agreement.
          (b) No Guaranteed Creditor shall by any act (except by a written
instrument pursuant to Section 5.06(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise and no delay in exercising,
on the part of any Guaranteed Creditor, 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. A waiver by any Guaranteed Creditor of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
such Guaranteed Creditor would otherwise have on any future occasion.
          (c) The rights and remedies herein provided are cumulative and not
exclusive of any other rights, remedies, powers and privileges provided by law.
     Section 5.07 Loan Documents. Each Obligor agrees that this Guaranty shall
constitute a “Loan Document” under the Loan Agreement.
     Section 5.08 Section Headings. The section headings used in this Guaranty
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
     Section 5.09 Successors and Assigns. This Guaranty shall be binding upon
the successors and assigns of each Obligor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns.
     Section 5.10 GOVERNING LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
     Section 5.11 Submission to Jurisdiction.

-7-

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

 

          (a) Each Obligor hereby irrevocably and unconditionally submits for
itself and its property, to the nonexclusive jurisdiction of the courts of the
Supreme Court of the State of New York, sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from either thereof, in any action or proceeding arising out of
or relating to this Guaranty, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any Guaranteed Creditor or
any of the other agents may otherwise have to bring any action or proceeding
relating to this Guaranty against any Obligor or its properties in the courts of
any jurisdiction.
          (b) Each party to this Guaranty irrevocably consents to service of
process in the manner provided for notices in Section 10.01 of the Loan
Agreement. Nothing in this Guaranty will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

    Section 5.12 Acknowledgments. Each Obligor hereby acknowledges that:

          (a) it has been advised by counsel in the negotiation, execution and
delivery of this Guaranty and the other Loan Documents;
          (b) no Guaranteed Creditor has any fiduciary relationship with or duty
to such Obligor arising out of or in connection with this Agreement or any of
the other Guaranteed Documents, and the relationship between the Guaranteed
Creditor, on one hand, and such Obligor, on the other hand, in connection
herewith or therewith is solely that of guarantor and creditor; and
          (c) no joint venture is created hereby or by the other Guaranteed
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Guaranteed Creditor or among the Borrower and the Guaranteed Creditor.
     Section 5.13 WAIVERS OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

-8-

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

 

     Section 5.14 Additional Obligors. Each Subsidiary of the Borrower that is
required to become a party to this Guaranty pursuant to Section 4.06 of the Loan
Agreement shall become an Obligor for all purposes of this Guaranty upon
execution and delivery by such Subsidiary of an Assumption Agreement and shall
thereafter have the same rights, benefits and obligations as an Obligor party
hereto on the date hereof.
[Remainder of page intentionally left blank; signature pages follow]

-9-

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

 

     IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.

          OBLIGORS:   ANADARKO GATHERING COMPANY LLC     KERR-MCGEE GATHERING
LLC     MIGC LLC     PINNACLE GAS TREATING LLC     WESTERN GAS WYOMING, L.L.C.
 
       
 
  By:   WGR Operating, LP, as sole member
 
  By:   Western Gas Operating, LLC,
its general partner
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    
 
            WESTERN GAS OPERATING, LLC
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    
 
            WESTERN GAS PARTNERS FINANCE     CORPORATION
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    
 
            WGR OPERATING, LP
 
       
 
  By:   Western Gas Operating, LLC,
its general partner
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    

Signature Page
Term Loan Guaranty Agreement
(Western Gas Operating, LP)

 

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

 

Acknowledged and Agreed to as
of the date hereof by:

          ADMINISTRATIVE AGENT:   WELLS FARGO BANK, NATIONAL     ASSOCIATION
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    

Signature Page
Term Loan Guaranty Agreement
(Western Gas Partners, LP)

 

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

 

SCHEDULE 1
ADDRESS FOR NOTICES
For each of the Obligors named herein:
1201 Lake Robbins Drive
The Woodlands, TX 77380
Attn: Senior Vice President and CFO
Facsimile: (832) 636-0278
Schedule 1

 

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

 

SCHEDULE 2
ASSUMPTION AGREEMENT
     ASSUMPTION AGREEMENT, dated as of [                         ], 201[   ],
made by [                         ], a [                         ] (the
“Additional Obligor”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as
administrative agent (in such capacity, the “Administrative Agent”) for the
Guaranteed Creditor (used herein as defined in the Guaranty Agreement referred
to below). All capitalized terms not defined herein shall have the meaning
ascribed to them in the Loan Agreement referred to below.
W I T N E S S E T H:
     WHEREAS, Western Gas Partners, LP, a Delaware limited partnership (the
“Borrower”), the Administrative Agent, and certain financial institutions as
agents and lenders have entered into that certain Term Loan Agreement, dated as
of August 2, 2010 (as amended, restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”);
     WHEREAS, in connection with the Loan Agreement, the Borrower and certain of
its Affiliates (other than the Additional Obligor) have entered into a Guaranty
Agreement, dated as of August 2, 2010 (as amended, restated, supplemented or
otherwise modified from time to time, the “Guaranty Agreement”) in favor of the
Administrative Agent for the benefit of the Guaranteed Creditor;
     WHEREAS, the Loan Agreement requires the Additional Obligor to become a
party to the Guaranty Agreement; and
     WHEREAS, the Additional Obligor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guaranty Agreement;
     NOW, THEREFORE, IT IS AGREED:
     1. Guaranty Agreement. By executing and delivering this Assumption
Agreement, the Additional Obligor, as provided in Section 5.14 of the Guaranty
Agreement, hereby becomes a party to the Guaranty Agreement as an Obligor
thereunder with the same force and effect as if originally named therein as an
Obligor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of an Obligor thereunder. The Additional
Obligor hereby represents and warrants that each of the representations and
warranties contained in Section 3 of the Guaranty Agreement is true and correct
as to such Person on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
     2. Governing Law. This Assumption Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
     IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.

Schedule 2-1

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

 

              [ADDITIONAL OBLIGOR]
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    

Schedule 2-2