**Exhibit 10.2**

 

[Execution]

 

 

**CREDIT AGREEMENT**

 

dated as of April 24, 2003

 

among

 

**WESTERN GAS RESOURCES, INC.**

*as theBorrower*

 

**BANK OF AMERICA, N.A.**

*asAdministrative Agent and L/C Issuer*

 

**BANK ONE, NA**

and

**FLEET NATIONAL BANK**

*as Co-Syndication Agents*

 

**THE ROYAL BANK OF SCOTLAND plc**

and

**WACHOVIA BANK, NATIONAL ASSOCIATION**

*as Co-Documentation Agents*

 

and

 

**THE OTHERLENDERS PARTY HERETO**

 

----

 

**BANC OF AMERICA SECURITIES LLC,**

*as SoleLead Arranger and Sole Book Manager*

 

 

 

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**TABLEOF CONTENTS**

 
| **Section**                                            |   |
|--------------------------------------------------------|--------|
| ARTICLE  I. DEFINITIONS AND ACCOUNTING TERMS           |
| 1.01                                                   |   | Defined Terms. |
| 1.02                                                   |   | Other Interpretive  Provisions. |
| 1.03                                                   |   | Accounting Terms. |
| 1.04                                                   |   | Rounding. |
| 1.05                                                   |   | References to  Agreements and Laws. |
| 1.06                                                   |   | Times of Day. |
| 1.07                                                   |   | Letter of Credit Amounts. |
|                                                   |   |   |
| ARTICLE  II. THE COMMITMENTS AND CREDIT EXTENSIONS     |
|                                                   |
| 2.01                                                   |   | Loans. |
| 2.02                                                   |   | Borrowings, Conversions and Continuations of Loans. |
| 2.03                                                   |   | Letters of Credit. |
| 2.04                                                   |   | Prepayments. |
| 2.05                                                   |   | Termination or  Reduction of Commitments. |
| 2.06                                                   |   | Repayment of Loans. |
| 2.07                                                   |   | Interest. |
| 2.08                                                   |   | Fees. |
| 2.09                                                   |   | Computation of  Interest and Fees. |
| 2.10                                                   |   | Evidence of Debt. |
| 2.11                                                   |   | Payments  Generally. |
| 2.12                                                   |   | Sharing  of Payments. |
| 2.13                                                   |   | Increase  in Commitments. |
|                                                   |   |   |
| ARTICLE  III. TAXES, YIELD PROTECTION AND ILLEGALITY   |
|                                                   |   |   |
| 3.01                                                   |   | Taxes. |
| 3.02                                                   |   | Illegality. |
| 3.03                                                   |   | Inability to Determine  Rates. |
| 3.04                                                   |   | Increased  Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans. |
| 3.05                                                   |   | Funding Losses. |
| 3.06                                                   |   | Matters  Applicable to all Requests for Compensation. |
| 3.07                                                   |   | Survival. |
|                                                   |   |   |
| ARTICLE  IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS |
|                                                   |   |   |
| 4.01                                                   |   | Conditions of  Initial Credit Extension. |
| 4.02                                                   |   | Conditions to all  Credit Extensions. |
|                                                   |   |   |
| ARTICLE  V. REPRESENTATIONS AND WARRANTIES             |
|                                                   |   |   |
| 5.01                                                   |   | Existence, Qualification and Power; Compliance  with Laws. |
| 5.02                                                   |   | Authorization; No  Contravention. |
| 5.03                                                   |   | Governmental Authorization;  Other Consents. |
| 5.04                                                   |   | Binding Effect. |
| 5.05                                                   |   | Financial  Statements; No Material Adverse Effect. |
| 5.06                                                   |   | Litigation. |
| 5.07                                                   |   | No Default. |
| 5.08                                                   |   | Ownership  of Property; Liens. |
|                                                        |        |  |  |

 

i

 

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| 5.09                                          |   | Environmental  Compliance.                                                       |
|-----------------------------------------------|--------|----------------------------------------------------------------------------------|
| 5.10                                          |   | Insurance.                                                                       |
| 5.11                                          |   | Taxes.                                                                           |
| 5.12                                          |   | ERISA Compliance.                                                                |
| 5.13                                          |   | Subsidiaries.                                                                    |
| 5.14                                          |   | Margin  Regulations; Investment Company Act; Public Utility Holding Company Act. |
| 5.15                                          |   | Disclosure.                                                                      |
| 5.16                                          |   | Compliance  with Laws.                                                           |
| 5.17                                          |   | Tax  Shelter Regulations.                                                        |
|                                          |   |                                                                             |
| ARTICLE  VI. AFFIRMATIVE COVENANTS            |
|                                          |   |                                                                             |
| 6.01                                          |   | Financial Statements.                                                            |
| 6.02                                          |   | Certificates; Other  Information.                                                |
| 6.03                                          |   | Notices.                                                                         |
| 6.04                                          |   | Payment  of Obligations.                                                         |
| 6.05                                          |   | Preservation of Existence, Etc.                                                  |
| 6.06                                          |   | Maintenance of Properties.                                                       |
| 6.07                                          |   | Maintenance  of Insurance.                                                       |
| 6.08                                          |   | Compliance  with Laws.                                                           |
| 6.09                                          |   | Books and Records.                                                               |
| 6.10                                          |   | Inspection Rights.                                                               |
| 6.11                                          |   | Use of Proceeds.                                                                 |
| 6.12                                          |   | Guaranties of  Borrower’s Subsidiaries.                                     |
| 6.13                                          |   | Additional  Guarantors and Stock Pledge.                                         |
| 6.14                                          |   | Agreement to Deliver  Mortgages.                                                 |
| 6.15                                          |   | Title Review.                                                                    |
| 6.16                                          |   | Perfection  and Protection of Security Interests and Liens.                      |
| 6.17                                          |   | Production  Proceeds.                                                            |
| 6.18                                          |   | Sale or Disposal of  Property.                                                   |
| 6.19                                          |   | Limitation on  Effectiveness.                                                    |
|                                          |   |                                                                             |
| ARTICLE  VII. NEGATIVE COVENANTS              |
|                                          |   |                                                                             |
| 7.01                                          |   | Liens.                                                                           |
| 7.02                                          |   | Investments.                                                                     |
| 7.03                                          |   | Indebtedness.                                                                    |
| 7.04                                          |   | Fundamental  Changes; Issuance of Stock.                                         |
| 7.05                                          |   | Dispositions.                                                                    |
| 7.06                                          |   | Restricted  Payments.                                                            |
| 7.07                                          |   | Change in Nature of  Business.                                                   |
| 7.08                                          |   | Transactions with  Affiliates.                                                   |
| 7.09                                          |   | Burdensome  Agreements.                                                          |
| 7.10                                          |   | Use of Proceeds.                                                                 |
| 7.11                                          |   | Limitation for Net  Products Exposure.                                           |
| 7.12                                          |   | Financial  Covenants.                                                            |
|                                          |   |                                                                             |
| ARTICLE  VIII. EVENTS OF DEFAULT AND REMEDIES |
|                                          |   |                                                                             |
| 8.01                                          |   | Events of Default.                                                               |
| 8.02                                          |   | Remedies Upon Event of  Default.                                                 |
| 8.03                                          |   | Application  of Funds.                                                           |

 

ii

 

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| ARTICLE  IX. ADMINISTRATIVE AGENT |
|-----------------------------------|
|                              |   |   |
| 9.01                              |   | Appointment and Authorization  of Administrative Agent. |
| 9.02                              |   | Delegation  of Duties. |
| 9.03                              |   | Liability of  Administrative Agent |
| 9.04                              |   | Reliance by  Administrative Agent. |
| 9.05                              |   | Notice of Default. |
| 9.06                              |   | Credit  Decision; Disclosure of Information by Administrative Agent. |
| 9.07                              |   | Indemnification  of Administrative Agent. |
| 9.08                              |   | Administrative  Agent in its Individual Capacity. |
| 9.09                              |   | Successor Administrative  Agent. |
| 9.10                              |   | Administrative  Agent May File Proofs of Claim. |
| 9.11                              |   | Collateral and Guaranty  Matters. |
| 9.12                              |   | Other Agents;  Arrangers and Managers. |
|                              |   |   |
| ARTICLE  X. MISCELLANEOUS         |
|                              |   |   |
| 10.01                             |   | Amendments, Etc. |
| 10.02                             |   | Notices  and Other Communications; Facsimile Copies. |
| 10.03                             |   | No Waiver; Cumulative  Remedies. |
| 10.04                             |   | Attorney Costs, Expenses and Taxes. |
| 10.05                             |   | Indemnification by the  Borrower. |
| 10.06                             |   | Payments Set Aside. |
| 10.07                             |   | Successors  and Assigns. |
| 10.08                             |   | Confidentiality. |
| 10.09                             |   | Set-off. |
| 10.10                             |   | Interest Rate Limitation. |
| 10.11                             |   | Counterparts. |
| 10.12                             |   | Integration. |
| 10.13                             |   | Survival of  Representations and Warranties. |
| 10.14                             |   | Severability. |
| 10.15                             |   | Tax Forms. |
| 10.16                             |   | Replacement  of Lenders; Replacement of Rating Agency. |
| 10.17                             |   | Governing Law. |
| 10.18                             |   | Waiver of Right to  Trial by Jury. |
| 10.19                             |   | ENTIRE AGREEMENT. |
| 10.20                             |   | Restatement. |
|                              |   |   |
| SIGNATURES                        |

 

iii

 

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| **SCHEDULES** |
|---------------|
|          |   |   |
| 2.01          |   | Commitments  and Pro Rata Shares |
| 5.05          |   | Material  Indebtedness |
| 5.12          |   | ERISA  Compliance |
| 5.13          |   | Subsidiaries  and Other Equity Investments |
| 7.01          |   | Existing  Liens |
| 7.02          |   | Joint  Ventures |
| 7.03          |   | Existing  Indebtedness |
| 10.02         |   | Administrative  Agent’s Office, Certain Addresses for Notices |
|          |   |   |
| **EXHIBITS**  |   |   |
|          |   |   |
|          |   | ***Form of*** |
| A             |   | Loan  Notice |
| B             |   | Note |
| C             |   | Compliance  Certificate |
| D             |   | Assignment  and Assumption |
| E             |   | Guaranty |
| F             |   | Opinion  Matters |
| G             |   | Form  of Mortgage |

 

iv

 

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**CREDIT AGREEMENT**

** **

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

 

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

 

TheBorrower has requested that the Lenders amend and restate the Existing CreditAgreement in its entirety, and the Lenders are willing to do so on the termsand conditions set forth herein.

 

Inconsideration of the mutual covenants and agreements herein contained, theparties hereto covenant and agree as follows:

 

# **ARTICLE I.**DEFINITIONS AND ACCOUNTING TERMS

# ** **

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

 

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

 

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

 

“AdministrativeQuestionnaire” means an Administrative Questionnaire in a form supplied bythe Administrative Agent.

 

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

 

----

 

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

 

“AggregateCommitments” means as of the date hereof the Commitments of all the Lendersin the aggregate amount of $300,000,000 as increased from time to time pursuantto Section 2.13.

 

“Agreement”means this Credit Agreement.

 

“ApplicableRate” means, from time to time, the following percentages per annum foreach category of Facility Fee, Eurodollar Rate, Letters of Credit and Base Rateset forth below, respectively, based upon the Debt to Capitalization Ratio asset forth below:

|                     |   | **Applicable Rate**                  |   |
|--------------------------|--------|--------------------------------------|--------|
| **Pricing****Level**     |   | **Debt to  Capitalization****Ratio** |   | **Facility Fee** |   | **Eurodollar********Rate +** |   | **Base Rate****  +** |   |
| **Letters of****Credit** |
| 1                        |   | <0.35:1                           |   | 0.300 | % | 1.200 | % | 0.250 | % |
| 2                        |   | >0.35:1 <0.40:1                |   | 0.375 | % | 1.250 | % | 0.375 | % |
| 3                        |   | >0.40:1 <0.45:1                |   | 0.375 | % | 1.375 | % | 0.500 | % |
| 4                        |   | >0.45:1 <0.50:1                |   | 0.500 | % | 1.500 | % | 0.750 | % |
| 5                        |   | >0.50:1                           |   | 0.500 | % | 1.750 | % | 1.000 | % |

 

Anyincrease or decrease in the Applicable Rate resulting from a change in the Debtto Capitalization Ratio shall become effective as of the first Business Dayimmediately following the date a Compliance Certificate is delivered pursuantto Section 6.02(b); provided, however, that (i) if theBorrower or a Subsidiary is making a significant acquisition or sellingsignificant assets, the Borrower may request a decrease or increase in theApplicable Rate during a fiscal quarter and deliver to the Administrative Agentand Lenders with such request proforma financial statements in form acceptableto Administrative Agent together with a calculation of the Debt toCapitalization Ratio based upon such financial statements and if AdministrativeAgent determines that the Borrower’s calculation is correct, the reduced orincreased Applicable Rate shall become effective on the fifth Business Dayfollowing the date on which notice thereof is given to Administrative Agent andto Lenders, and (ii) if a Compliance Certificate is not delivered when due inaccordance with Section 6.02(b), then Pricing Level 5 shall apply as ofthe first Business Day after the date on which such Compliance Certificate wasrequired to have been delivered.  TheApplicable Rate in effect from the Closing Date through the first Business Daythereafter on which such a Compliance Certificate is received by Agent, shallbe determined based upon Pricing Level 3.

 

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

 

2

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“Assignmentand Assumption” means an Assignment and Assumption substantially in theform of Exhibit D.

 

“AttorneyCosts” means and includes all reasonable fees, expenses and disbursementsof external counsel.

 

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

 

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

 

“AvailabilityPeriod” means the period from and including the Closing Date to theearliest of (a) the Maturity Date, (b) the date of termination of the AggregateCommitments pursuant to Section 2.05, and (c) the date of termination ofthe commitment of each Lender to make Loans and of the obligation of the of theL/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

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

 

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

 

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

 

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

 

“Borrowing”means a Committed Borrowing.

 

“BusinessDay” means any day other than a Saturday, Sunday or other day on whichcommercial banks are authorized to close under the Laws of, or are in factclosed in, the state where the Administrative Agent’s Office is located and, ifsuch day relates to any Eurodollar Rate Loan, means any such day on whichdealings in Dollar deposits are conducted by and between banks in the Londoninterbank eurodollar market.

 

3

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

 

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

 

(a)           any “person” or “group” (as suchterms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of1934, but excluding any employee benefit plan of such person or itssubsidiaries, and any person or entity acting in its capacity as trustee, agentor other fiduciary or administrator of any such plan) after the Closing Datebecomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under theSecurities Exchange Act of 1934, except that a person or group shall be deemedto have “beneficial ownership” of all securities that such person or group hasthe right to acquire (such right, an “option right”), whether such rightis exercisable immediately or only after the passage of time), directly orindirectly, of 25% or more of the equity securities of the Borrower entitled tovote for members of the board of directors of the Borrower on a fully-dilutedbasis (and taking into account all such securities that such person or grouphas the right to acquire pursuant to any option right); or

 

(b)           during any period of 24 consecutivemonths, a majority of the members of the board of directors of the Borrowercease to be composed of individuals (i) who were members of that board orequivalent governing body on the first day of such period, (ii) whoseelection or nomination to that board or equivalent governing body was approvedby individuals referred to in clause (i) above constituting at the time of suchelection or nomination at least a majority of that board or equivalentgoverning body or (iii) whose election or nomination to that board or otherequivalent governing body was approved by individuals referred to in clauses(i) and (ii) above constituting at the time of such election or nomination atleast a majority of that board or equivalent governing body (excluding, in thecase of both clause (ii) and clause (iii), any individual whose initialnomination for, or assumption of office as, a member of that board orequivalent governing body occurs as a result of an actual or threatenedsolicitation of proxies or consents for the election or removal of one or moredirectors by any person or group other than a solicitation for the election ofone or more directors by or on behalf of the board of directors); or

 

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

 

“ClosingDate” means the first date all the conditions precedent in Section 4.01are satisfied or waived in accordance with Section 4.01 (or, in the caseof Section 4.01(b), waived by the Person entitled to receive theapplicable payment).

 

“Code”means the Internal Revenue Code of 1986.

 

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

 

“Commitment”means, as to each Lender, its obligation to (a) make Loans to the Borrowerpursuant to Section 2.01 and (b) purchase participations in L/CObligations, in an aggregate principal amount at any one time outstanding notto exceed the amount set forth

 

4

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opposite such Lender’s name on **Schedule2.01** or in the Assignment and Assumption pursuant to which suchLender becomes a party hereto, as applicable, as such amount may be adjustedfrom time to time in accordance with this Agreement.

 

“CommitmentLetter” means that certain agreement dated February 13, 2003, among theBorrower, Administrative Agent and Arranger.

 

“CommittedBorrowing” means a borrowing consisting of simultaneous Loans of the sameType and, in the case of Eurodollar Rate Loans, having the same Interest Periodmade by each of the Lenders pursuant to Section 2.01.

 

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

 

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

 

“ConsolidatedFunded Indebtedness” means, as of any date of determination, for theBorrower and its Subsidiaries calculated on a consolidated basis, the sum of(a) the outstanding principal amount of all obligations, whether current orlong-term, for borrowed money (including Obligations hereunder) and allobligations evidenced by bonds, debentures, notes, loan agreements or othersimilar instruments, (b) all purchase money Indebtedness (e.g., sellerfinancings), (c) all direct obligations arising under letters of credit(including standby and commercial), bankers’ acceptances, bank guaranties,surety bonds and similar instruments, (d) all obligations in respect of the deferredpurchase price of property or services (other than trade accounts payable inthe ordinary course of business), (e) Attributable Indebtedness in respect ofcapital leases and operating leases *(butonly the aggregate amount thereof which at the time in question exceeds$35,000,000 excluding Obligations arising under oil and gas leases, gascompressor and gas processing plant site leases, real estate leases for officespace used by the Borrower and leases for vehicles, office equipment and dataprocessing equipment)* and Synthetic Lease Obligations, (f) withoutduplication, all Guarantees with respect to outstanding Indebtedness of thetypes specified in clauses (a) through (e) above of Persons other than theBorrower or any Subsidiary, and (g) all Indebtedness of the types referred toin clauses (a) through (f) above of any partnership or joint venture (otherthan a joint venture that is itself a corporation or limited liability company)in which the Borrower or a Subsidiary is a general partner or joint venturer,unless such Indebtedness is expressly made non-recourse to the Borrower or suchSubsidiary.

 

“ConsolidatedInterest Charges” means, for any period, Interest Charges for the Borrowerand its Subsidiaries calculated on a consolidated basis.

 

“ConsolidatedNet Income” means, for any period, Net Income for the Borrower and itsSubsidiaries calculated on a consolidated basis.

 

“ContractualObligation” means, as to any Person, any provision of any security issuedby such Person or of any agreement or instrument to which such Person is aparty or by which it or any of its property is bound.

 

5

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

 

“CPDebt” means unsecured Indebtedness in the form of commercial paper issuedby Borrower which meets the following requirements: (i) such Indebtedness has amaturity of not more than 270 days after the date of issuance thereof, (ii) theoffering of such Indebtedness is not required to be registered under theSecurities Act of 1933, as amended, (iii) such Indebtedness is not the subjectof a Guarantee of any Loan Party, (iv) at the time Borrower incurs suchIndebtedness, no Default or Event of Default shall have occurred and becontinuing hereunder, and (v) the documentation evidencing such Indebtednessshall contain no terms, conditions or defaults (other than pricing and back-upavailability under this Agreement) which are more favorable to the third partycreditor than those contained in this Agreement are to Lenders, as determinedby Required Lenders in their discretion (provided that Required Lenders shallmake any such determination at the time the initial documentation covering theissuance of CP Debt is executed and delivered and each time such documentationis modified, taking into consideration any amendments or modifications to thisAgreement then in effect), and shall not contain any provision which attemptsto modify, amend or restrict any of the rights or remedies of Administrative Agentor Lenders hereunder or under any of the other Loan Documents.

 

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

 

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

 

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

 

“DebtorRelief Laws” means the Bankruptcy Code of the United States, and all otherliquidation, conservatorship, bankruptcy, assignment for the benefit ofcreditors, moratorium, rearrangement, receivership, insolvency, reorganization,or similar debtor relief Laws of the

 

6

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United States or other applicablejurisdictions from time to time in effect and affecting the rights of creditorsgenerally.

 

“DebtSecurities” means the $50,000,000 aggregate principal amount of 7.61%Senior Notes due July 28, 2007, $25,000,000 aggregate principal amount of 7.99%Senior Notes due October 27, 2003, $25,000,000 aggregate principal amount of9.24% Senior Notes due October 27, 2004, $25,000,000 aggregate principal amountof 6.36% Senior Notes, Series H, due January 17, 2008, $25,000,000 aggregateprincipal amount of 7.23% Senior Notes due December 27, 2003, issued byBorrower prior to the date hereof, and all other senior notes from time to timehereafter issued by the Borrower pursuant to that certain Third Amended andRestated Master Shelf Agreement effective as of January 13, 2003, between theBorrower and The Prudential Insurance Company of America, Prudential InvestmentManagement, Inc. (“Prudential”), Pruco Life Insurance Company and certainPrudential Affiliates, as amended, supplemented, modified and restated fromtime to time in an aggregate principal amount not to exceed $265,000,000,outstanding at any time.

 

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

 

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

 

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

 

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

 

“Disposition”or “Dispose” means the sale, transfer, license, lease or otherdisposition (including any sale and leaseback transaction) of any property byany Person, including any sale, assignment, transfer or other disposal, with orwithout recourse, of any notes or accounts receivable or any rights and claimsassociated therewith.

 

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

 

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

 

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

 

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

 

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

 

“EnvironmentalLaws” means any and all federal, state, local, and foreign statutes, laws,regulations, ordinances, rules, judgments, orders, decrees, permits,concessions, grants, franchises, licenses, agreements or governmentalrestrictions relating to pollution and the protection of the environment or therelease of any materials into the environment, including those related tohazardous substances or wastes, air emissions and discharges to waste or publicsystems.

 

“Environmental Liability” means anyliability, contingent or otherwise (including any liability for damages, costsof environmental remediation, fines, penalties or indemnities), of theBorrower, any other Loan Party or any of their respective Subsidiaries directlyor indirectly resulting from or based upon (a) violation of any EnvironmentalLaw, (b) the generation, use, handling, transportation, storage, treatment ordisposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,(d) the release or threatened release of any Hazardous Materials into theenvironment or (e) any contract, agreement or other consensual arrangementpursuant to which liability is assumed or imposed with respect to any of theforegoing.

 

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

 

“ERISAAffiliate” means any trade or business (whether or not incorporated) undercommon control with the Borrower within the meaning of Section 414(b) or (c) ofthe Code (and Sections 414(m) and (o) of the Code for purposes of provisionsrelating to Section 412 of the Code).

 

“ERISAEvent” means (a) a Reportable Event with respect to a Pension Plan; (b) awithdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subjectto Section 4063 of ERISA during a plan year in which it was a substantialemployer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operationsthat is treated as such a withdrawal under Section 4062(e) of ERISA; (c) acomplete or partial withdrawal by the Borrower or any ERISA Affiliate from aMultiemployer Plan or notification that a Multiemployer Plan is inreorganization; (d) the filing of a notice of intent to terminate, thetreatment of a Plan amendment as a termination under Sections 4041 or 4041A ofERISA, or the commencement of proceedings by the PBGC to terminate a PensionPlan or Multiemployer Plan; or (e) the imposition of any liability under TitleIV of ERISA, other than for PBGC premiums due but not delinquent under Section4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

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“EurodollarRate” means for any Interest Period with respect to any Eurodollar RateLoan:

 

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

 

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

 

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

 

“EurodollarRate Loan” means a Loan that bears interest at a rate based on theEurodollar Rate.

 

“Eventof Default” has the meaning specified in Section 8.01.

 

“ExistingCredit Agreement” has the meaning specified in the preamble of thisAgreement.

 

“ExistingLetters of Credit” means those letters of credit issued by AdministrativeAgent under the Existing Credit Agreement prior to the date hereof that areoutstanding as of the date hereof.

 

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

 

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

 

“FeeLetter” means the letter agreement, dated February 13, 2003, among theBorrower, the Administrative Agent and the Arranger.

 

“FERC”means any federal energy regulatory commission.

 

“FixedCharge Coverage Ratio” means, as of the end of any fiscal quarter, theratio of (a) Consolidated EBITDA for the four consecutive fiscal quartersthen ended *to* (b) the sum ofConsolidated Interest Charges for such period plus the aggregate amount ofdividends paid or declared by the Borrower during such period in respect of thePreferred Stock, not to exceed four regularly scheduled dividends and allspecial dividends.  For purposes of the“Fixed Charge Coverage Ratio,” EBITDA shall be calculated excluding gains andlosses on asset sales and other extraordinary items.

 

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

 

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

 

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

 

“GovernmentalAuthority” means any nation or government, any state or other politicalsubdivision thereof, any agency, authority, instrumentality, regulatory body,court, administrative tribunal, central bank or other entity exercisingexecutive, legislative, judicial, taxing, regulatory or administrative powersor functions of or pertaining to government.

 

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

 

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in respect of such Indebtedness or otherobligation of the payment or performance thereof or to protect such obligeeagainst loss in respect thereof (in whole or in part), or (b) any Lien (otherthan Permitted Liens as defined in Section 7.01) on any assets of such Personsecuring any Indebtedness or other obligation of any other Person, whether ornot such Indebtedness or other obligation is assumed by such Person.  The amount of any Guarantee shall be deemedto be an amount equal to the stated or determinable amount of the relatedprimary obligation, or portion thereof, in respect of which such Guarantee ismade or, if not stated or determinable, the maximum reasonably anticipatedliability in respect thereof as determined by the guaranteeing Person in goodfaith.  The term “Guarantee” as a verbhas a corresponding meaning.

 

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

 

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

 

“Hazardous Materials” means all explosive orradioactive substances or wastes and all hazardous or toxic substances, wastesor other pollutants, including petroleum or petroleum distillates, asbestos orasbestos-containing materials, polychlorinated biphenyls, radon gas, infectiousor medical wastes and all other substances or wastes of any nature regulatedpursuant to any Environmental Law.

 

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

 

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

 

(b)           all direct or contingent obligationsof such Person arising under letters of credit (including standby andcommercial), bankers’ acceptances, bank guaranties, surety bonds and similarinstruments;

 

(c)           net obligations of such Person underany Swap Contract;

 

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

 

(e)           indebtedness (excluding prepaidinterest thereon) secured by a Lien on property owned or being purchased bysuch Person (including indebtedness arising under conditional sales or othertitle retention agreements), whether or not such indebtedness shall have beenassumed by such Person or is limited in recourse;

 

(f)            capital leases, operating leases andSynthetic Lease Obligations;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“InterestCharges” means for any Person for any Period, all interest accrued duringsuch Period by such Person in connection with borrowed money (includingcapitalized interest) or in connection with the deferred purchase price ofassets, in each case to the extent treated as interest in accordance with GAAP.

 

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

 

“InterestPeriod” means as to each Eurodollar Rate Loan, the period commencing on thedate such Eurodollar Rate Loan is disbursed or converted to or continued as aEurodollar Rate

 

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Loan and ending on the date one, two, threeor six months thereafter, as selected by the Borrower in its Loan Notice; providedthat:

 

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

 

(ii)           any Interest Period that begins onthe last Business Day of a calendar month (or on a day for which there is nonumerically corresponding day in the calendar month at the end of such InterestPeriod) shall end on the last Business Day of the calendar month at the end ofsuch Interest Period; and

 

(iii)          no Interest Period shall extend beyondthe Maturity Date.

 

“Investment”means, as to any Person, any direct or indirect acquisition or investment bysuch Person, whether by means of (a) the purchase or other acquisition ofcapital stock or other securities of another Person, (b) a loan, advance orcapital contribution to, Guarantee or assumption of debt of, or purchase orother acquisition of any other debt or equity participation or interest in,another Person, including any partnership or joint venture interest in suchother Person, or (c) the purchase or other acquisition (in one transaction or aseries of transactions) of assets of another Person that constitute a businessunit.  For purposes of covenantcompliance, the amount of any Investment shall be the amount actually invested,without adjustment for subsequent increases or decreases in the value of suchInvestment.

 

“IRS”means the United States Internal Revenue Service.

 

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

 

“Laws”means, collectively, all international, foreign, Federal, state and localstatutes, treaties, rules, regulations, ordinances, codes and administrative orjudicial precedents or authorities, including by any Governmental Authority chargedwith the enforcement, interpretation or administration thereof, and allapplicable administrative orders, licenses, authorizations and permits of, andagreements with, any Governmental Authority, in each case whether or not havingthe force of law.

 

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

 

“L/CBorrowing” means an extension of credit resulting from a drawing under anyLetter of Credit which has not been reimbursed on the date when made orrefinanced as a Committed Borrowing.

 

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

 

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

 

“L/CObligations” means, as at any date of determination, the aggregate undrawnamount of all outstanding Letters of Credit plus the aggregate of allUnreimbursed Amounts, including all L/C Borrowings.

 

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

 

“LendingOffice” means, as to any Lender, the office or offices of such Lenderdescribed as such in such Lender’s Administrative Questionnaire, or such otheroffice or offices as a Lender may from time to time notify the Borrower and theAdministrative Agent.

 

“Letterof Credit” means any letter of credit issued hereunder and shall includethe Existing Letters of Credit.  ALetter of Credit may be a commercial letter of credit or a standby letter ofcredit.

 

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

 

“Letterof Credit Expiration Date” means the day that is seven days prior to theMaturity Date then in effect (or, if such day is not a Business Day, the nextpreceding Business Day).

 

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

 

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

 

“Loan”has the meaning specified in Section 2.01.

 

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

 

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therewith (excluding term sheets, commitmentletters, correspondence and similar documents used in the negotiation hereofand further excluding all offering memorandums prepared by Administrative Agentor its Affiliates for use in connection with the Loans).

 

“LoanNotice” means a notice of (a) a Committed Borrowing, (b) a conversion ofLoans from one Type to the other, or (c) a continuation of Eurodollar RateLoans, pursuant to Section 2.02(a), which, if in writing, shall besubstantially in the form of Exhibit A.

 

“LoanParties” means, collectively, the Borrower and each Guarantor.

 

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

 

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

 

“MaturityDate” means April 24, 2007.

 

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

 

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

 

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

 

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

 

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

 

“MultiemployerPlan” means any employee benefit plan of the type described in Section4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or isobligated to make contributions, or during the preceding five plan years, hasmade or been obligated to make contributions.

 

“NetIncome” means, for any period, for any Person, the net income of theBorrower and its Subsidiaries for that period.

 

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

 

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

 

“OrganizationDocuments” means, (a) with respect to any corporation, the certificate orarticles of incorporation and the bylaws (or equivalent or comparableconstitutive documents with respect to any non-U.S. jurisdiction); (b) withrespect to any limited liability company, the certificate or articles offormation or organization and operating agreement; and (c) with respect to anypartnership, joint venture, trust or other form of business entity, thepartnership, joint venture or other applicable agreement of formation ororganization and any agreement, instrument, filing or notice with respectthereto filed in connection with its formation or organization with theapplicable Governmental Authority in the jurisdiction of its formation ororganization and, if applicable, any certificate or articles of formation ororganization of such entity.

 

“OutstandingAmount” means (i) with respect to Loans, on any date, the aggregateoutstanding principal amount thereof after giving effect to any borrowings andprepayments or repayments of Loans, occurring on such date; and (ii) withrespect to any L/C Obligations on any date, the amount of such L/C Obligationson such date after giving effect to any L/C Credit Extension occurring on suchdate and any other changes in the aggregate amount of the L/C Obligations as ofsuch date, including as a result of any reimbursements of outstanding unpaiddrawings under any Letters of Credit or any reductions in the maximum amountavailable for drawing under Letters of Credit taking effect on such date.

 

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

 

“PBGC”means the Pension Benefit Guaranty Corporation.

 

“PensionPlan” means any “employee pension benefit plan” (as such term is defined inSection 3(2) of ERISA), other than a Multiemployer Plan, that is subject toTitle IV of ERISA and is sponsored or maintained by the Borrower or any ERISAAffiliate or to which the Borrower or any ERISA Affiliate contributes or has anobligation to contribute, or in the case of a multiple employer or other plandescribed in Section 4064(a) of ERISA, has made contributions at any timeduring the immediately preceding five plan years.

 

“PermittedLien” has the meaning set forth in Section 7.01.

 

“Person”means any natural person, corporation, limited liability company, trust, jointventure, association, company, partnership, Governmental Authority or otherentity.

 

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

 

“PreferredStock” means all issued and outstanding preferred stock of the Borrower, asthe same may change from time to time, including but not limited to the2,760,000 shares of $2.625 Cumulative Convertible Preferred Stock of theBorrower.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Requestfor Credit Extension” means (a) with respect to a Borrowing, conversion orcontinuation of Loans, a Loan Notice and (b) with respect to an L/C CreditExtension, a Letter of Credit Application.

 

“RequiredLenders” means, as of any date of determination, Lenders having more than 66-2/3% of the AggregateCommitments or, if the commitment of each Lender to make Loans and theobligation of the L/C Issuer to make L/C Credit Extensions have been terminatedpursuant to Section 8.02, Lenders holding in the aggregate more than66-2/3% of the Total Outstandings (with the aggregate amount of each Lender’srisk participation and funded participation in L/C Obligations being deemed“held” by such Lender for purposes of this definition); provided thatthe Commitment of, and the portion of the Total Outstandings held or

 

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

 

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

 

“RestrictedPayment” means (i) any dividend or other distribution (whether incash, securities or other property) with respect to any capital stock or otherequity interest of the Borrower or any Subsidiary, or any payment (whether incash, securities or other property), including any sinking fund or similardeposit, on account of the purchase, redemption, retirement, acquisition,cancellation or termination of any such capital stock or other equity interestor of any option, warrant or other right to acquire any such capital stock orother equity interest or (ii) any purchase, repurchase, defeasance orprepayment of the Debt Securities or the Subordinated Debt excluding regularlyscheduled payments of principal and interest.

 

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

 

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

 

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

 

“SecurityDocuments” means all security agreements, deeds of trust, mortgages, chattelmortgages, pledges, guaranties, financing statements, continuation statements,extension agreements and other agreements or instruments now, heretofore, orhereafter delivered by Borrower or any Subsidiary to Administrative Agent inconnection with this Agreement or any transaction contemplated hereby to secureor guarantee the payment of any part of the Obligations or the performance ofthe other duties and obligations of Borrower or any Subsidiary under the LoanDocuments.

 

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

 

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

 

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

 

“StockOption Agreements” means, collectively, those certain Agreements to ProvideLoan(s) to enable certain employees to exercise stock options by and amongBorrower and certain of its key employees.

 

“StockPledge” means, collectively the pledge agreements necessary to pledge allof the equity interests in the Material Domestic Subsidiaries and 65% of theequity interests in Borrower’s foreign Subsidiaries, in form and substanceacceptable to Administrative Agent.

 

“SubordinatedDebt” means unsecured Indebtedness issued by Borrower that is subordinatedby its terms to the Obligations and the Debt Securities on terms acceptable toRequired Lenders and guarantees thereof by Borrower’s Subsidiaries each ofwhich is subordinated by its terms to the Obligations and the Debt Securitieson terms acceptable to Required Lenders.

 

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

 

“SwapContract” means (a) any and all rate swap transactions, basis swaps, creditderivative transactions, forward rate transactions, commodity swaps, commodityoptions, forward commodity contracts, equity or equity index swaps or options,bond or bond price or bond index swaps or options or forward bond or forwardbond price or forward bond index transactions, interest rate options, forwardforeign exchange transactions, cap transactions, floor transactions, collartransactions, currency swap transactions, cross-currency rate swaptransactions, currency options, spot contracts, or any other similartransactions or any combination of any of the foregoing (including any optionsto enter into any of the foregoing),

 

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

 

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

 

“SyntheticLease Obligation” means the monetary obligation of a Person under (a) aso-called synthetic, off-balance sheet or tax retention lease, or (b) anagreement for the use or possession of property creating obligations that donot appear on the balance sheet of such Person but which, upon the insolvencyor bankruptcy of such Person, would be characterized as the indebtedness ofsuch Person (without regard to accounting treatment), excluding with respect tothis clause (ii) agreements entered into in the ordinary course of such Person’sbusiness.

 

“TotalOutstandings” means the aggregate Outstanding Amount of all Loans and allL/C Obligations.

 

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

 

“UnfundedPension Liability” means the excess of a Pension Plan’s benefit liabilitiesunder Section 4001(a)(16) of ERISA, over the current value of that PensionPlan’s assets, determined in accordance with the assumptions used for fundingthe Pension Plan pursuant to Section 412 of the Code for the applicable planyear.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)           Section headings herein and in theother Loan Documents are included for convenience of reference only and shallnot affect the interpretation of this Agreement or any other Loan Document.

 

**1.03        Accounting Terms**.  (a)  All accounting termsnot specifically or completely defined herein shall be construed in conformitywith, and all financial data (including financial ratios and other financialcalculations) required to be submitted pursuant to this Agreement shall beprepared in conformity with, GAAP applied on a consistent basis, as in effectfrom time to time, applied in a manner consistent with that used in preparingthe Audited Financial Statements, except as otherwise specificallyprescribed herein.

 

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

 

**1.04        Rounding.**  Any financial ratios required to be maintainedby the Borrower pursuant to this Agreement shall be calculated by dividing theappropriate component by the other component, carrying the result to one placemore than the number of places by which such

 

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ratio is expressed herein and rounding theresult up or down to the nearest number (with a rounding-up if there is nonearest number).

 

**1.05        References to Agreements and Laws.**  Unless otherwise expressly provided herein,(a) references to Organization Documents, agreements (including the LoanDocuments) and other contractual instruments shall be deemed to include allsubsequent amendments, restatements, extensions, supplements and othermodifications thereto, but only to the extent that such amendments,restatements, extensions, supplements and other modifications are notprohibited by any Loan Document; and (b) references to any Law shallinclude all statutory and regulatory provisions consolidating, amending,replacing, supplementing or interpreting such Law.

 

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

 

**1.07        Letter of Credit Amounts.** Unless otherwise specified, all referencesherein to the amount of a Letter of Credit at any time shall be deemed to meanthe maximum face amount of such Letter of Credit after giving effect to allincreases thereof contemplated by such Letter of Credit or the Letter of CreditApplication therefor, whether or not such maximum face amount is in effect atsuch time.

 

# **ARTICLE II.**THE COMMITMENTS AND CREDIT EXTENSIONS

# ** **

**2.01        Loans.**  Subject to the terms and conditions setforth herein, each Lender severally agrees to make loans (each such loan, a “Loan”)to the Borrower from time to time, on any Business Day during the AvailabilityPeriod, in an aggregate amount not to exceed at any time outstanding the amountof such Lender’s Commitment; provided, however, that after givingeffect to any Committed Borrowing, (i) the Total Outstandings shall not exceedthe Aggregate Commitments, and (ii) the aggregate Outstanding Amount of theLoans of any Lender, plus such Lender’s Pro Rata Share of theOutstanding Amount of all L/C Obligations, shall not exceed such Lender’sCommitment.  Within the limits of eachLender’s Commitment, and subject to the other terms and conditions hereof, theBorrower may borrow under this Section 2.01, prepay under Section2.04, and reborrow under this Section 2.01.  Loans may be Base Rate Loans or EurodollarRate Loans, as further provided herein.

 

## **2.02        Borrowings,Conversions and Continuations of Loans.**

## ** **

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

 

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Borrower pursuant to this Section 2.02(a)must be confirmed promptly by delivery to the Administrative Agent of a writtenLoan Notice, appropriately completed and signed by a Responsible Officer of theBorrower.  Each Borrowing of, conversionto or continuation of Eurodollar Rate Loans shall be in a principal amount of$5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Sections 3.02 and3.03(c), each Borrowing of or conversion to Base Rate Loans shall be in aprincipal amount of $250,000 or a whole multiple of $100,000 in excessthereof.  Each Loan Notice (whethertelephonic or written) shall specify (i) whether the Borrower is requesting aCommitted Borrowing, a conversion of Loans from one Type to the other, or acontinuation of Eurodollar Rate Loans, (ii) the requested date of theBorrowing, conversion or continuation, as the case may be (which shall be aBusiness Day), (iii) the principal amount of Loans to be borrowed, converted orcontinued, (iv) the Type of Loans to be borrowed or to which existing Loans areto be converted, and (v) if applicable, the duration of the Interest Periodwith respect thereto.  If the Borrowerfails to specify a Type of Loan in a Loan Notice or if the Borrower fails togive a timely notice requesting a conversion or continuation, then theapplicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base RateLoans shall be effective as of the last day of the Interest Period then ineffect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,conversion to, or continuation of Eurodollar Rate Loans in any such LoanNotice, but fails to specify an Interest Period, it will be deemed to havespecified an Interest Period of one month.

 

(b)           Following receipt of a Loan Notice,the Administrative Agent shall promptly notify each Lender of the amount of itsPro Rata Share of the applicable Loans, and if no timely notice of a conversionor continuation is provided by the Borrower, the Administrative Agent shallnotify each Lender of the details of any automatic conversion to Base RateLoans described in the preceding subsection. In the case of a Committed Borrowing, each Lender shall make the amountof its Loan available to the Administrative Agent in immediately availablefunds at the Administrative Agent’s Office not later than 1:00 p.m. on theBusiness Day specified in the applicable Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section4.02 (and, if such Borrowing is the initial Credit Extension, Section4.01), the Administrative Agent shall make all funds so received availableto the Borrower in like funds as received by the Administrative Agent either by(i) crediting the account of the Borrower on the books of Bank of America withthe amount of such funds or (ii) wire transfer of such funds, in each casein accordance with instructions provided to (and reasonably acceptable to) theAdministrative Agent by the Borrower; provided, however, that if,on the date the Loan Notice with respect to such Borrowing is given by theBorrower, there are L/C Borrowings outstanding, then the proceeds of suchBorrowing shall be applied, first, to the payment in full of any suchL/C Borrowings, second, to the Borrower as provided above.

 

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

 

(d)           The Administrative Agent shallpromptly notify the Borrower and the Lenders of the interest rate applicable toany Interest Period for Eurodollar Rate Loans upon determination

 

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

 

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

 

## **2.03        Letters of Credit.**

## ** **

(a)           The Letter of Credit Commitment.

 

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

 

(ii)           The L/C Issuer shall be under noobligation to issue any Letter of Credit if:

 

(A)          any order, judgment or decree of anyGovernmental Authority or arbitrator shall by its terms purport to enjoin orrestrain the L/C Issuer from issuing such Letter of Credit, or any Lawapplicable to the L/C Issuer or any request or directive (whether or not havingthe force of law) from any Governmental Authority with jurisdiction over theL/C Issuer shall prohibit, or request that the L/C Issuer refrain from, theissuance of letters of credit generally or such Letter of Credit in particularor shall impose upon the L/C Issuer with

 

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

 

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

 

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

 

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

 

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

 

(iii)          The L/C Issuer shall be under noobligation to amend any Letter of Credit if (A) the L/C Issuer would have noobligation at such time to issue such Letter of Credit in its amended form underthe terms hereof, or (B) the beneficiary of such Letter of Credit does notaccept the proposed amendment to such Letter of Credit.

 

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

 

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

 

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

 

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

 

(iii)          Ifthe Borrower so requests in any applicable Letter of Credit Application, theL/C Issuer may, in its sole and absolute discretion, agree to issue a Letter ofCredit that has automatic renewal provisions (each, an “Auto-Renewal Letterof Credit”); provided that any such Auto-Renewal Letter of Creditmust permit the L/C Issuer to prevent any such renewal at least once in eachtwelve-month period (commencing with the date of issuance of such Letter ofCredit) by giving prior notice to the beneficiary thereof not later than a day(the “Nonrenewal Notice Date”) in each such twelve-month period to beagreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the L/C Issuer,the Borrower shall not be required to make a specific request to the L/C Issuerfor any such renewal.  Once anAuto-Renewal Letter of Credit has been issued, the Lenders shall be deemed tohave authorized (but may not require) the L/C Issuer to permit the renewal ofsuch Letter of Credit at any time prior to an expiry date not later than theLetter of Credit Expiration Date; provided, however, that the L/CIssuer shall not permit any such renewal if (A) the L/C Issuer has determinedthat it would have no obligation at such time to issue such Letter of Credit inits renewed form under the terms hereof (by reason of the provisions of Section2.04(a)(ii) or otherwise), or (B) it has received notice (which may be bytelephone or in writing) on or before the day that is two Business Days before theNonrenewal Notice Date (1) from the Administrative Agent that the RequiredLenders have elected not to permit such renewal or (2) from the AdministrativeAgent, any Lender or the Borrower that one or more of the applicable conditionsspecified in Section 4.02 is not then satisfied.

 

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

 

(c)           Drawings and Reimbursements;Funding of Participations.

 

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(i)            Upon receipt from the beneficiary ofany Letter of Credit of any notice of a drawing under such Letter of Credit,the L/C Issuer shall notify the Borrower and the Administrative Agentthereof.  Not later than 11:00 a.m. onthe date of any payment by the L/C Issuer under a Letter of Credit (each suchdate, an “Honor Date”), the Borrower shall reimburse the L/C Issuerthrough the Administrative Agent in an amount equal to the amount of suchdrawing.  If the Borrower fails to soreimburse the L/C Issuer by such time, the Administrative Agent shall promptlynotify each Lender of the Honor Date, the amount of the unreimbursed drawing(the “Unreimbursed Amount”), and the amount of such Lender’s Pro RataShare thereof.  In such event, theBorrower shall be deemed to have requested a Committed Borrowing of Base RateLoans to be disbursed on the Honor Date in an amount equal to the UnreimbursedAmount, without regard to the minimum and multiples specified in Section2.02 for the principal amount of Base Rate Loans, but subject to the amountof the unutilized portion of the Aggregate Commitments and the conditions setforth in Section 4.02 (other than the delivery of a Loan Notice).  Any notice given by the L/C Issuer or theAdministrative Agent pursuant to this Section 2.03(c)(i) may be given bytelephone if immediately confirmed in writing; provided that the lack ofsuch an immediate confirmation shall not affect the conclusiveness or bindingeffect of such notice.

 

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

 

(iii)          With respect to any UnreimbursedAmount that is not fully refinanced by a Committed Borrowing of Base Rate Loansbecause the conditions set forth in Section 4.02 cannot be satisfied orfor any other reason, the Borrower shall be deemed to have incurred from theL/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that isnot so refinanced, which L/C Borrowing shall be due and payable on demand(together with interest) and shall bear interest at the Default Rate.  In such event, each Lender’s payment to theAdministrative Agent for the account of the L/C Issuer pursuant to Section2.03(c)(ii) shall be deemed payment in respect of its participation in suchL/C Borrowing and shall constitute an L/C Advance from such Lender insatisfaction of its participation obligation under this Section 2.03.

 

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

 

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

 

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Section 2.03(c), shall be absolute and unconditional andshall not be affected by any circumstance, including (A) any set-off,counterclaim, recoupment, defense or other right which such Lender may haveagainst the L/C Issuer, the Borrower or any other Person for any reasonwhatsoever; (B) the occurrence or continuance of a Default, or (C) any otheroccurrence, event or condition, whether or not similar to any of the foregoing;provided, however, that each Lender’s obligation to make Loanspursuant to this Section 2.03(c) is subject to the conditions set forthin Section 4.02 (other than delivery by the Borrower of a LoanNotice).  No such making of an L/CAdvance shall relieve or otherwise impair the obligation of the Borrower toreimburse the L/C Issuer for the amount of any payment made by the L/C Issuerunder any Letter of Credit, together with interest as provided herein.

 

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

 

(d)           Repayment of Participations.

 

(i)            At any time after the L/C Issuer hasmade a payment under any Letter of Credit and has received from any Lender suchLender’s L/C Advance in respect of such payment in accordance with Section2.03(c), if the Administrative Agent receives for the account of the L/CIssuer any payment in respect of the related Unreimbursed Amount or interestthereon (whether directly from the Borrower or otherwise, including proceeds ofCash Collateral applied thereto by the Administrative Agent), theAdministrative Agent will distribute to such Lender its Pro Rata Share thereof(appropriately adjusted, in the case of interest payments, to reflect theperiod of time during which such Lender’s L/C Advance was outstanding) in thesame funds as those received by the Administrative Agent.

 

(ii)           If any payment received by theAdministrative Agent for the account of the L/C Issuer pursuant to Section2.03(c)(i) is required to be returned under any of the circumstancesdescribed in Section 10.06 (including pursuant to any settlement enteredinto by the L/C Issuer in its discretion), each Lender shall pay to theAdministrative Agent for the account of the L/C Issuer its Pro Rata Sharethereof on demand of the Administrative Agent, plus interest thereon from thedate of such demand to the date such amount is returned by such Lender, at arate per annum equal to the Federal Funds Rate from time to time in effect.

 

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

 

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

 

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

 

(iii)          any draft, demand, certificate orother document presented under such Letter of Credit proving to be forged,fraudulent, invalid or insufficient in any respect or any statement thereinbeing untrue or inaccurate in any respect; or any loss or delay in thetransmission or otherwise of any document required in order to make a drawingunder such Letter of Credit;

 

(iv)          any payment by the L/C Issuer undersuch Letter of Credit against presentation of a draft or certificate that doesnot strictly comply with the terms of such Letter of Credit; or any paymentmade by the L/C Issuer under such Letter of Credit to any Person purporting tobe a trustee in bankruptcy, debtor-in-possession, assignee for the benefit ofcreditors, liquidator, receiver or other representative of or successor to anybeneficiary or any transferee of such Letter of Credit, including any arisingin connection with any proceeding under any Debtor Relief Law; or

 

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

 

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

 

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

 

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herewithat the request or with the approval of the Lenders or the Required Lenders, asapplicable; (ii) any action taken or omitted in the absence of gross negligenceor willful misconduct; or (iii) the due execution, effectiveness, validity orenforceability of any document or instrument related to any Letter of Credit orLetter of Credit Application.  TheBorrower hereby assumes all risks of the acts or omissions of any beneficiaryor transferee with respect to its use of any Letter of Credit; provided,however, that this assumption is not intended to, and shall not,preclude the Borrower’s pursuing such rights and remedies as it may haveagainst the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, any Agent-RelatedPerson, nor any of the respective correspondents, participants or assignees ofthe L/C Issuer, shall be liable or responsible for any of the matters describedin clauses (i) through (v) of Section 2.03(e); provided, however,that anything in such clauses to the contrary notwithstanding, the Borrower mayhave a claim against the L/C Issuer, and the L/C Issuer may be liable to theBorrower, to the extent, but only to the extent, of any direct, as opposed toconsequential or exemplary, damages suffered by the Borrower which the Borrowerproves were caused by the L/C Issuer’s willful misconduct or gross negligenceor the L/C Issuer’s willful failure to pay under any Letter of Credit after thepresentation to it by the beneficiary of a sight draft and certificate(s)strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of theforegoing, the L/C Issuer may accept documents that appear on their face to bein order, without responsibility for further investigation, regardless of anynotice or information to the contrary, and the L/C Issuer shall not beresponsible for the validity or sufficiency of any instrument transferring orassigning or purporting to transfer or assign a Letter of Credit or the rightsor benefits thereunder or proceeds thereof, in whole or in part, which mayprove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral.  Upon the request of the AdministrativeAgent, (i) if the L/C Issuer has honored any full or partial drawing requestunder any Letter of Credit and such drawing has resulted in an L/C Borrowing,or (ii) if, as of the Letter of Credit Expiration Date, any Letter of Creditmay for any reason remain outstanding and partially or wholly undrawn, theBorrower shall immediately Cash Collateralize the then Outstanding Amount ofall L/C Obligations (in an amount equal to such Outstanding Amount determinedas of the date of such L/C Borrowing or the Letter of Credit Expiration Date,as the case may be).  For purposeshereof, “Cash Collateralize” means to pledge and deposit with or deliverto the Administrative Agent, for the benefit of the L/C Issuer and the Lenders,as collateral for the L/C Obligations, cash or deposit account balancespursuant to documentation in form and substance satisfactory to theAdministrative Agent and the L/C Issuer (which documents are hereby consentedto by the Lenders).  Derivatives of suchterm have corresponding meanings.  TheBorrower hereby grants to the Administrative Agent, for the benefit of the L/CIssuer and the Lenders, a security interest in all such cash, deposit accountsand all balances therein and all proceeds of the foregoing.  Cash collateral shall be maintained inblocked, non-interest bearing deposit accounts by Administrative Agent.

 

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

 

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

 

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

 

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

 

(k)           Conflict with Letter of CreditApplication.  In the event of anyconflict between the terms hereof and the terms of any Letter of CreditApplication, the terms hereof shall control.

 

## **2.04       **Prepayments.

 

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

 

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

 

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

 

**2.05        Termination or Reduction ofCommitments.**  TheBorrower may, upon notice to the Administrative Agent, terminate the AggregateCommitments, or from time to time permanently reduce the Aggregate Commitments;provided that (i) any such notice shall be received by theAdministrative Agent not later than 11:00 a.m. five Business Days prior to thedate of termination or reduction, (ii) any such partial reduction shall be inan aggregate amount of $10,000,000 or any whole multiple of $1,000,000 inexcess thereof, (iii) the Borrower shall not terminate or reduce the AggregateCommitments if, after giving effect thereto and to any concurrent prepaymentshereunder, the Total Outstandings would exceed the Aggregate Commitments, and(iv) if, after giving effect to any reduction of the Aggregate Commitments, theLetter of Credit Sublimit exceeds the amount of the Aggregate Commitments, suchSublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptlynotify the Lenders of any such notice of termination or reduction of theAggregate Commitments.  Any reduction ofthe Aggregate Commitments shall be applied to the Commitment of each Lenderaccording to its Pro Rata Share.  All facility fees accrued until theeffective date of any termination of the Aggregate Commitments shall be paid onthe effective date of such termination.

 

**2.06        Repayment of Loans.**  The Borrower shall repay to the Lenders onthe Maturity Date the aggregate principal amount of Loans outstanding on suchdate.

 

## **2.07**        Interest.

 

(a)           Subject to the provisions ofsubsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on theoutstanding principal amount thereof for each Interest Period at a rate perannum equal to the Eurodollar Rate for such Interest Period plus theApplicable Rate for Eurodollar Loans and (ii) each Base Rate Loan shallbear interest on the outstanding principal amount thereof from the applicableborrowing date at a rate per annum equal to the Base Rate plus theApplicable Rate for Base Rate Loans.

 

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

 

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accelerationor otherwise, such amount shall thereafter bear interest at a fluctuatinginterest rate per annum at all times equal to the Default Rate to the fullestextent permitted by applicable Laws. Furthermore,****while any Eventof Default exists, the Borrower shall pay interest on the principal amount ofall outstanding Obligations hereunder at a fluctuating interest rate per annumat all times equal to the Default Rate to the fullest extent permitted byapplicable Laws.  Accrued and unpaidinterest on past due amounts (including interest on past due interest) shall bedue and payable upon demand.

 

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

 

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

 

(a)           Facility Fee.  TheBorrower shall pay to the Administrative Agent for the account of each Lenderin accordance with its Pro Rata Share, a facility fee equal to the ApplicableRate for the Facility Fee times the actual daily amount of the AggregateCommitments (or, if the Aggregate Commitments have terminated, on theOutstanding Amount of all Loans and L/C Obligations), regardless of usage.  The facility fee shall accrue at all timesduring the Availability Period (and thereafter so long as any Loans or L/CObligations remain outstanding), including at any time during which one or moreof the conditions in Article IV is not met, and shall be due and payablequarterly in arrears on the last Business Day of each March, June, Septemberand December, commencing with the first such date to occur after the ClosingDate, and on the Maturity Date (and, if applicable, thereafter on demand).  The facility fee shall be calculatedquarterly in arrears, and if there is any change in the Applicable Rate for theFacility Fee during any quarter, the actual daily amount shall be computed andmultiplied by the Applicable Rate for the Facility Fee separately for eachperiod during such quarter that such Applicable Rate for the Facility Fee wasin effect.

 

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

** **

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

 

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## **2.10       **Evidence of Debt.

 

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

 

(b)           In addition to the accounts andrecords referred to in subsection (a), each Lender and the Administrative Agentshall maintain in accordance with its usual practice accounts or recordsevidencing the purchases and sales by such Lender of participations in Lettersof Credit.  In the event of any conflictbetween the accounts and records maintained by the Administrative Agent and theaccounts and records of any Lender in respect of such matters, the accounts andrecords of the Administrative Agent shall control in the absence of manifesterror.

## ** **

## **2.11        Payments Generally.**

 

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

 

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

 

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

 

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

 

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

 

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

 

Anotice of the Administrative Agent to any Lender or the Borrower with respectto any amount owing under this subsection (c) shall be conclusive, absentmanifest error.

 

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

 

(e)           The obligations of the Lendershereunder to make Loans and to fund participations in Letters of Credit areseveral and not joint.  The failure ofany Lender to make any Loan or to fund any such participation on any daterequired hereunder shall not relieve any other Lender of its correspondingobligation to do so on such date, and no Lender shall be responsible for thefailure of any other Lender to so make its Loan or purchase its participation.

 

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

 

**2.12        Sharing of Payments.**  If, other than as expressly providedelsewhere herein, any Lender shall obtain on account of the Loans made by it,or the participations in L/C Obligations held by it, any payment (whethervoluntary, involuntary, through the exercise of any right of set-off, orotherwise) in excess of its ratable share (or other share contemplatedhereunder) thereof, such Lender shall immediately (a) notify the AdministrativeAgent of such fact, and (b) purchase from the other Lenders such participationsin the Loans made by them and/or such subparticipations in the participationsin L/C Obligations held by them, as the case may be, as shall be necessary tocause such purchasing Lender to share the excess payment in respect of suchLoans or such participations, as the case may be, pro rata with each of them; provided,however, that if all or any portion of such excess payment is thereafterrecovered from the purchasing Lender under any of the circumstances describedin Section 10.06 (including pursuant to any settlement entered into bythe purchasing Lender in its discretion), such purchase shall to that extent berescinded and each other Lender shall repay to the purchasing Lender thepurchase price paid therefor, together with an amount equal to such payingLender’s ratable share (according to the proportion of (i) the amount of suchpaying Lender’s required repayment to (ii) the total amount so recovered fromthe purchasing Lender) of any interest or other amount paid or payable by thepurchasing Lender in respect of the total amount so recovered, without furtherinterest thereon.  The Borrower agreesthat any Lender so purchasing a participation from another Lender may, to thefullest extent permitted by law, exercise all its rights of payment (includingthe right of set-off, but subject to Section 10.09) with respect to suchparticipation as fully as if such Lender were the direct creditor of theBorrower in the amount of such participation. The Administrative Agent will keep records (which shall be conclusiveand binding in the absence of manifest error) of participations purchased underthis Section and will in each case notify the Lenders following any suchpurchases or repayments.  Each Lender thatpurchases a participation pursuant to this Section shall from and after suchpurchase have the right to give all notices, requests, demands, directions andother communications under this Agreement with respect to the portion of theObligations purchased to the same extent as though the purchasing Lender werethe original owner of the Obligations purchased.

## ** **

## **2.13        Increasein Commitments.**

 

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

 

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

 

(b)           If the Aggregate Commitments are increased in accordance with thisSection, the Administrative Agent and the Borrower shall determine theeffective date (the “Increase Effective Date”) and the final allocationof such increase.  The AdministrativeAgent shall promptly notify the Borrower and the Lenders of the finalallocation of such increase and the Increase Effective Date.  As a condition precedent to such increase,the Borrower shall deliver to the Administrative Agent a certificate of eachLoan Party dated as of the Increase Effective Date (in sufficient copies foreach Lender) signed by a Responsible Officer of such Loan Party(i) certifying and attaching the resolutions adopted by such Loan Party approvingor consenting to such increase, and (ii) in the case of the Borrower,certifying that, before and after giving effect to such increase, (A) therepresentations and warranties contained in Article V and the other LoanDocuments are true and correct on and as of the Extension Effective Date,except to the extent that such representations and warranties specificallyrefer to an earlier date, in which case they are true and correct as of suchearlier date, and except that for purposes of this Section 2.13, therepresentations and warranties contained in subsections (a) and (b) of Section5.05 shall be deemed to refer to the most recent statements furnishedpursuant to subsections (a) and (b), respectively, of Section 6.01, and(B) no Default exists.  The Borrowershall prepay any Loans outstanding on the Increase Effective Date (and pay anyadditional amounts required pursuant to Section 3.05) to the extentnecessary to keep the outstanding Loans ratable with any revised Pro RataShares arising from any nonratable increase in the Commitments under thisSection.

 

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

# ** **

# **ARTICLE III.**TAXES,YIELD PROTECTION AND ILLEGALITY

## ** **

## **3.01        Taxes.**

 

(a)           Any and all payments by the Borrowerto or for the account of the Administrative Agent or any Lender under any LoanDocument shall be made free and clear of and without deduction for any and allpresent or future taxes, duties, levies, imposts, deductions, assessments,fees, withholdings or similar charges, and all liabilities with respectthereto, excluding, in the case of the Administrative Agent and eachLender, taxes imposed on or measured by its overall net income, and franchisetaxes imposed on it (in lieu of net income taxes), by the jurisdiction (or anypolitical subdivision thereof) under the Laws of which the Administrative Agentor such Lender, as the case may be, is organized or maintains a lending office(all such non-excluded taxes, duties, levies, imposts, deductions, assessments,fees, withholdings or similar charges, and liabilities being hereinafterreferred to as “Taxes”).  If theBorrower shall be required by any Laws to deduct any Taxes from or in respectof any sum payable under any Loan Document to the Administrative Agent or anyLender, (i) the sum payable shall be increased as necessary so that aftermaking all required deductions (including deductions applicable to additionalsums

 

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payableunder this Section), each of the Administrative Agent and such Lender receivesan amount equal to the sum it would have received had no such deductions beenmade, (ii) the Borrower shall make such deductions, (iii) the Borrower shallpay the full amount deducted to the relevant taxation authority or otherauthority in accordance with applicable Laws, and (iv) within 30 daysafter the date of such payment, the Borrower shall furnish to theAdministrative Agent (which shall forward the same to such Lender) the originalor a certified copy of a receipt evidencing payment thereof.

 

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

 

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

 

(d)           The Borrower agrees to indemnify theAdministrative Agent and each Lender for (i) the full amount of Taxes and OtherTaxes (including any Taxes or Other Taxes imposed or asserted by anyjurisdiction on amounts payable under this Section) paid by the AdministrativeAgent and such Lender, (ii) amounts payable under Section 3.01(c) and(iii) any liability (including additions to tax, penalties, interest andexpenses) arising therefrom or with respect thereto, in each case whether ornot such Taxes or Other Taxes were correctly or legally imposed or asserted bythe relevant Governmental Authority. Payment under this subsection (d) shall be made within 30 days after thedate the Lender or the Administrative Agent makes a demand therefor.

 

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

 

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suchdesignation will avoid the need for such notice and will not, in the good faithjudgment of such Lender, otherwise be materially disadvantageous to suchLender.

 

**3.03       ****Inability to Determine Rates****.**  If the Required Lenders determine that forany reason adequate and reasonable means do not exist for determining theEurodollar Rate for any requested Interest Period with respect to a proposed EurodollarRate Loan, or that the Eurodollar Rate for any requested Interest Period withrespect to a proposed Eurodollar Rate Loan does not adequately and fairlyreflect the cost to such Lenders of funding such Loan, the Administrative Agentwill promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintainEurodollar Rate Loans shall be suspended until the Administrative Agent (uponthe instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrowermay revoke any pending request for a Borrowing of, conversion to orcontinuation of Eurodollar Rate Loans or, failing that, will be deemed to haveconverted such request into a request for a Committed Borrowing of Base Rate Loansin the amount specified therein.

## ** **

## **3.04        IncreasedCost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.**

 

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

 

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

 

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

 

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allocated to such Loan by such Lender (asdetermined by such Lender in good faith, which determination shall beconclusive), which shall be due and payable on each date on which interest ispayable on such Loan, provided the Borrower shall have received at least15 days’ prior notice (with a copy to the Administrative Agent) of suchadditional interest from such Lender. If a Lender fails to give notice 15 days prior to the relevant InterestPayment Date, such additional interest shall be due and payable 15 days fromreceipt of such notice.

 

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

 

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

 

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

 

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

 

Forpurposes of calculating amounts payable by the Borrower to the Lenders underthis Section 3.05, each Lender shall be deemed to have funded eachEurodollar Rate Loan made by it at the EurodollarRate for such Loan by a matching deposit or other borrowing in theLondon interbank eurodollar market for a comparable amount and for a comparableperiod, whether or not such Eurodollar Rate Loan was in fact so funded.

## ** **

## **3.06        Matters Applicable to all Requests forCompensation.**

 

(a)           A certificateof the Administrative Agent or any Lender claiming compensation under this ArticleIII and setting forth the additional amount or amounts to be paid to ithereunder shall be conclusive in the absence of manifest error.  In determining such amount, theAdministrative Agent or such Lender may use any reasonable averaging andattribution methods.

 

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

 

**3.07        Survival.**  Allof the Borrower’s obligations under this Article III shall survivetermination of the Aggregate Commitments and repayment of all other Obligationshereunder.

 

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For purposes of this Article III only, theterm “Laws” shall include any and all guidelines of any Governmental Authorityand the interpretation or administration of the Laws by any GovernmentalAuthority charged with the enforcement, interpretation or administrationthereof.

 

# **ARTICLE IV.**CONDITIONSPRECEDENT TO CREDIT EXTENSIONS

 

**4.01        Conditions of Initial Credit Extension.**  The obligation of each Lender to make itsinitial Credit Extension hereunder is subject to satisfaction of the followingconditions precedent:

 

(a)           The AdministrativeAgent’s receipt of the following, each of which shall be originals orfacsimiles (followed promptly by originals) unless otherwise specified, eachproperly executed by a Responsible Officer of the signing Loan Party, eachdated the Closing Date (or, in the case of certificates of governmentalofficials, a recent date before the Closing Date) and each in form andsubstance satisfactory to the Administrative Agent and its legal counsel:

 

(i)            executed counterparts of thisAgreement, the Guaranty, and theStock Pledge and the Intercreditor Agreement sufficient in number fordistribution to the Administrative Agent, each Lender and the Borrower;

 

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

 

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

 

(iv)          such documents and certifications asthe Administrative Agent may reasonably require to evidence that each LoanParty is duly organized or formed, and that each of the Borrower andthe Guarantors is validly existing, in good standing and qualified toengage in business in each jurisdictionwhere its ownership, lease or operation of properties or the conduct of itsbusiness requires such qualification, except to the extent that failure to doso could not reasonably be expected to have a Material Adverse Effect;

 

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

 

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

 

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

 

(viii)        a certificate signed by a ResponsibleOfficer of the Borrower certifying (A) that the conditions specified in Sections4.02(a) and (b) have been satisfied, and (B) that there has been no event or circumstance sincethe date of the Audited Financial Statements that has had or could bereasonably expected to have, either individually or in the aggregate, aMaterial Adverse Effect; and (C) thecalculation of the Debt to Capitalization Ratio as of December 31, 2002;

 

(ix)                           evidencethat all insurance required to be maintained pursuant to the Loan Documents hasbeen obtained and is in effect;

 

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

 

(xi)                           projections ofBorrower and its Consolidated Subsidiaries for the fiscal years 2003 through2006, prepared by the Financing Planning Department of Borrower and reviewed bythe Chief Financial Officer of Borrower;

 

(ix)           such otherassurances, certificates, documents, consents or opinions as the AdministrativeAgent, the L/C Issuer or the Required Lenders reasonably may require.

 

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

 

(c)           The Indebtedness under the ExistingCredit agreement shall be refinanced with proceeds of the initial CreditExtension.

 

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

 

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

 

(a)           The representationsand warranties of the Borrower and eachother Loan Party contained in Article V or any other LoanDocument, or which are contained in any document

 

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furnished at any time under or in connection herewith or therewith,shall be true and correct on and as of the date of such Credit Extension, exceptto the extent that such representations and warranties specifically refer to anearlier date, in which case they shall be true and correct as of such earlierdate, and except that for purposes of this Section 4.02, therepresentations and warranties contained in subsections (a) and (b) of Section5.05 shall be deemed to refer to the most recent statements furnishedpursuant to clauses (a) and (b), respectively, of Section 6.01.

 

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

 

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

 

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

# ** **

# **ARTICLE V.**REPRESENTATIONS AND WARRANTIES

 

TheBorrower represents and warrants to the Administrative Agent and the Lendersthat:

 

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

 

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

 

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

 

**5.04.       Binding Effect.**  This Agreement has been, and each other LoanDocument, when delivered hereunder, will have been, duly executed and deliveredby each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when sodelivered will constitute, a legal, valid and binding obligation of such LoanParty, enforceable against each Loan Party that is party thereto in accordancewith its terms; except as enforceability may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or similar Laws affectingthe enforcement of creditors’ rights generally and by general equitableprinciples (whether enforcement is sought by proceedings in equity or at Law).

 

## **5.05       **Financial Statements; NoMaterial Adverse Effect.

 

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

 

(b)           The audited consolidated financialstatements of the Borrower and its Subsidiaries as of and for the year endedDecember 31, 2002, including consolidated statements of income or operations,shareholders’ equity and cash flows for the fiscal year ended on that date (i)were prepared in accordance with GAAP consistently applied throughout theperiod covered thereby, except as otherwise expressly noted therein, and (ii)fairly present the financial condition of the Borrower and its Subsidiaries asof the date thereof and their results of operations for the period coveredthereby.  **Schedule 5.05** (as hereaftersupplemented from time to time in writing) sets forth all material indebtednessand other material liabilities, direct or contingent, of the Borrower and itsconsolidated Subsidiaries as of the date of such financial statements (but notdisclosed therein), including material liabilities for taxes, materialcommitments and material Indebtedness.

 

(c)           Since the date of the AuditedFinancial Statements, there has been no event or circumstance, eitherindividually or in the aggregate, that has had or could reasonably be expectedto have a Material Adverse Effect.

 

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

 

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knowledgeof the Responsible Officers after due and diligent investigation, threatened orcontemplated, at law, in equity, in arbitration or before any GovernmentalAuthority, by or against the Borrower or any of its Subsidiaries or against anyof their properties or revenues that (a) purport to affect or pertain to thisAgreement or any other Loan Document, or any of the transactions contemplatedhereby, or (b) either individually or in the aggregate, if determinedadversely, could reasonably be expected to have a Material Adverse Effect.

 

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

 

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

 

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

 

**5.10.       Insurance.**  The properties of the Borrower and itsSubsidiaries are insured with financially sound and reputable insurancecompanies not Affiliates of the Borrower, in such amounts, with suchdeductibles and covering such risks as are customarily carried by companiesengaged in similar businesses and owning similar properties in localities wherethe Borrower or the applicable Subsidiary operates.

 

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

 

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

 

## **5.12       **ERISA Compliance.

 

(a)           Each Plan is in compliance in allmaterial respects with the applicable provisions of ERISA, the Code and otherLaws.  The Borrower and each ERISAAffiliate have made all required contributions to each Plan subject to Section412 of the Code, and no application for a funding waiver or an extension of anyamortization period pursuant to Section 412 of the Code has been made withrespect to any Plan.

 

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

 

(c)           (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) noPension Plan has any Unfunded Pension Liability; (iii) neither the Borrower norany ERISA Affiliate has incurred, or reasonably expects to incur, any liabilityunder Title IV of ERISA with respect to any Pension Plan (other than premiumsdue and not delinquent under Section 4007 of ERISA); (iv) neither the Borrowernor any ERISA Affiliate has incurred, or reasonably expects to incur, anyliability (and no event has occurred which, with the giving of notice underSection 4219 of ERISA, would result in such liability) under Sections 4201 or4243 of ERISA with respect to a Multiemployer Plan; and (v) neither theBorrower nor any ERISA Affiliate has engaged in a transaction that could besubject to Sections 4069 or 4212(c) of ERISA.

 

**5.13        Subsidiaries.**  Asof the Closing Date, the Borrower has no Subsidiaries other than thosespecifically disclosed in Part (a) of **Schedule 5.13** and has no material equityinvestments in any other corporation or entity other than those specificallydisclosed in Part (b) of **Schedule 5.13**.

 

## **5.14       **Margin Regulations; Investment Company Act; PublicUtility Holding Company Act.

 

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

 

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

 

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**5.15        Disclosure.**  TheBorrower has disclosed to the Administrative Agent and the Lenders allagreements, instruments and corporate or other restrictions to which it or anyof its Subsidiaries is subject, and all other matters known to it, that,individually or in the aggregate, could reasonably be expected to result in aMaterial Adverse Effect.  For purposesof this Section 5.15, information that is disclosed in reports on Forms10-K, 10-Q and 8-K or in definitive proxy materials filed by the Borrower withthe SEC shall be deemed to have been disclosed to the Administrative Agent andthe Lenders.  No report, financialstatement, certificate or other information furnished (whether in writing ororally) by or on behalf of any Loan Party to the Administrative Agent or anyLender in connection with the transactions contemplated hereby and thenegotiation of this Agreement or delivered hereunder (as modified orsupplemented by other information so furnished) contains any materialmisstatement of fact or omits to state any material fact necessary to make thestatements therein, in the light of the circumstances under which they weremade, not misleading; provided that, with respect to projected financialinformation, the Borrower represents only that such information was prepared ingood faith based upon assumptions believed to be reasonable at the time.

 

**5.16        Compliance with Laws.**  Each of the Borrower and each Subsidiary isin compliance in all material respects with the requirements of all Laws andall orders, writs, injunctions and decrees applicable to it or to itsproperties, except in such instances in which (a) such requirement of Law ororder, writ, injunction or decree is being contested in good faith byappropriate proceedings diligently conducted or (b) the failure to complytherewith, either individually or in the aggregate, could not reasonably beexpected to have a Material Adverse Effect.

 

**5.17       ****Tax Shelter Regulations****.**  TheBorrower does not intend to treat the Loans and/or Letters of Credit andrelated transactions as being a “reportable transaction” (within the meaning ofTreasury Regulation Section 1.6011-4). In the event the Borrower determines to take any action inconsistentwith such intention, it will promptly notify the Administrative Agentthereof.  If the Borrower so notifiesthe Administrative Agent, the Borrower acknowledges that one or more of theLenders may treat its Loans and/or its Letters of Credit as part of atransaction that is subject to Treasury Regulation Section 301.6112-1, and suchLender or Lenders, as applicable, will maintain the lists and other recordsrequired by such Treasury Regulation.

 

# **ARTICLE VI**. AFFIRMATIVE COVENANTS

 

Solong as any Lender shall have any Commitment hereunder, any Loan or otherObligation hereunder shall remain unpaid or unsatisfied, or any Letter ofCredit shall remain outstanding, the Borrower shall, and shall (except in thecase of the covenants set forth in Sections 6.01, 6.02, 6.03and 6.11) cause each Subsidiary to:

 

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

 

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

 

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

 

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

 

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

 

Asto any information contained in materials furnished pursuant to Section6.02(d), the Borrower shall not be separately required to furnish suchinformation under clause (a) or (b) above, but the foregoing shall not be inderogation of the obligation of the Borrower to furnish the information andmaterials described in subsections (a) and (b) above at the times specifiedtherein.

 

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

 

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

 

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

 

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

 

(d)           promptly after thesame are available, copies of each annual report, proxy or financial statementor other report or communication sent to the stockholders of the Borrower, andcopies of all annual, regular, periodic and special reports and registrationstatements which the Borrower may file or be required to file with the SECunder Section 13 or 15(d) of the Securities Exchange Act of 1934, and nototherwise required to be delivered to the Administrative Agent pursuant hereto;

 

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

 

(f)            promptly, such additionalinformation regarding the business, financial or corporate affairs of theBorrower or any Subsidiary, or compliance with the terms of the Loan Documents,as the Administrative Agent or any Lender may from time to time reasonablyrequest;

 

(g)           By January 30th of eachyear after the occurrence of a Debt Rating Downgrade, an Engineering Reportprepared as of the preceding December 31st by independent petroleumengineers chosen by Borrower and acceptable to Required Lenders, concerning theoil and gas reserves of Borrower and its Subsidiaries.  The form of this report shall besatisfactory to Administrative Agent, shall contain sufficient information toenable Borrower to meet the reporting requirements concerning oil and gasreserves contained in Regulations S-K and S-X promulgated by the Securities andExchange Commission.  This report shalldistinguish (or shall be delivered together with a certificate from anappropriate officer of Borrower which distinguishes) those properties treatedin the report which are Collateral from those properties treated in the reportwhich are not Collateral;

 

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

 

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

 

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

 

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Borrowerdeems duplicative, immaterial or inapplicable for delivery to AdministrativeAgent and Lenders).

 

Documentsrequired to be delivered pursuant to Section 6.01(a) or (b) or Section6.02(d) (to the extent any such documents are included in materialsotherwise filed with the SEC) may be delivered electronically and if sodelivered, shall be deemed to have been delivered on the date (i) on which theBorrower posts such documents, or provides a link thereto on the Borrower’swebsite on the Internet at the website address listed on **Schedule 10.02**; or (ii) onwhich such documents are posted on the Borrower’s behalf onIntraLinks/IntraAgency or another relevant website, if any, including, but notlimited to any filings made on EDGAR to which each Lender and theAdministrative Agent have access (whether a commercial, third-party website orwhether sponsored by the Administrative Agent); provided that: (i) theBorrower shall deliver paper copies of such documents to the AdministrativeAgent or any Lender that requests the Borrower to deliver such paper copiesuntil a written request to cease delivering paper copies is given by theAdministrative Agent or such Lender and (ii) the Borrower shall notify (whichmay be by facsimile or electronic mail) the Administrative Agent and eachLender of the posting of any such documents and provide to the AdministrativeAgent by electronic mail electronic versions (i.e., soft copies) of suchdocuments.  Notwithstanding anythingcontained herein, in every instance the Borrower shall be required to providepaper copies of the Compliance Certificates required by Section 6.02(b)to the Administrative Agent and each of the Lenders.  Except for such Compliance Certificates, the Administrative Agentshall have no obligation to request the delivery or to maintain copies of thedocuments referred to above, and in any event shall have no responsibility tomonitor compliance by the Borrower with any such request for delivery, and eachLender shall be solely responsible for requesting delivery to it or maintainingits copies of such documents.

 

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

 

(a)           of the occurrence ofany Default;

 

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

 

(c)           of the occurrence of any ERISA Event;

 

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

 

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

 

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Eachnotice pursuant to this Section shall be accompanied by a statement of aResponsible Officer of the Borrower setting forth details of the occurrencereferred to therein and stating what action the Borrower has taken and proposesto take with respect thereto.  Eachnotice pursuant to Section 6.03(a) shall describe with particularity anyand all provisions of this Agreement and any other Loan Document that have beenbreached.

 

**6.04        Payment of Obligations.**  Pay and discharge as the same shall becomedue and payable, all its obligations and liabilities, including (a) all taxliabilities, assessments and governmental charges or levies upon it or its propertiesor assets, unless the same are being contested in good faith by appropriateproceedings diligently conducted and adequate reserves in accordance with GAAPare being maintained by the Borrower or such Subsidiary; (b) all lawful claimswhich, if unpaid, would by law become a Lien upon its property; and (c) allIndebtedness, as and when due and payable, but subject to any subordinationprovisions contained in any instrument or agreement evidencing suchIndebtedness.

 

**6.05        Preservation of Existence, Etc.**  (a) Preserve, renew and maintain in fullforce and effect its legal existence and good standing under the Laws of thejurisdiction of its organization except in a transaction permitted by Section7.04 or 7.05; (b) take all reasonable action to maintain all rights,privileges, permits, licenses and franchises necessary or desirable in thenormal conduct of its business, except to the extent that failure to do socould not reasonably be expected to have a Material Adverse Effect; and (c)preserve or renew all of its registered patents, trademarks, trade names andservice marks, the non-preservation of which could reasonably be expected tohave a Material Adverse Effect.

 

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

 

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

 

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

 

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

 

**6.10       ****Inspection****Rights.**  Permit representatives and independentcontractors of the Administrative Agent on behalf of Lenders to visit andinspect any of its properties, to examine its corporate, financial andoperating records, and make copies thereof or abstracts therefrom, and todiscuss its affairs, finances and accounts with its directors, officers, andindependent public accountants, atsuch reasonable times during normal business hours and as often as may bereasonably desired, upon reasonable advance notice to the Borrower; provided,however, that when an Event of Default exists the Administrative Agentor any Lender (or any of their respective representatives or independentcontractors) may do any of the foregoing at the expense of the Borrower at anytime during normal business hours and without advance notice.

 

**6.11        Use of Proceeds.**  Usethe proceeds of the Credit Extensions for general corporate purposes not incontravention of any Law or of any Loan Document, including repayment ofIndebtedness under the Existing Credit Agreement.

 

**6.12        Guaranties of Borrower’sSubsidiaries.**  Subject to Section 6.13 (b), cause each of thefollowing Domestic Subsidiaries to, and each such Person who becomes a DomesticSubsidiary after the date hereof (to the extent such Domestic Subsidiary meetsthe criteria set forth in this Section 6.12) to, within thirty (30) days afterbecoming a Domestic Subsidiary, execute and deliver to Administrative Agent anabsolute and unconditional guaranty of the timely repayment of the Obligationsof Borrower and the due and punctual performance of the Obligations ofBorrower, which guaranty shall be substantially in the form of Exhibit E:

 

(a)                           Each DomesticSubsidiary of Borrower which has EBITDA in any fiscal quarter of Borrower whichconstitutes ten percent (10%) or more of Borrower’s Consolidated EBITDA forsuch fiscal quarter or which has assets at any time with a book value equal toor exceeding (10%) of the book value of Borrower’s consolidated assets at suchtime;

 

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

 

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

 

(d)                           Upon request by theAdministrative Agent on behalf of the Required Lenders, any other DomesticSubsidiary of Borrower.

## ** **

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## **6.13        Additional Guarantors and Stock Pledge**.

 

(a)                   Notify the AdministrativeAgent at the time that any Person becomes a Domestic Subsidiary that isrequired to execute and deliver a Guaranty pursuant to Section 6.12, and(i) subject to Section 6.13(b), promptly thereafter (and in anyevent within 30 days), cause such Person to become a Guarantor by executing and delivering to the AdministrativeAgent a counterpart of the Guaranty or such other document as the AdministrativeAgent shall deem appropriate for such purpose and (ii) subject to Section6.13(c), promptly thereafter (and in any event within 30 days) pledge tothe Administrative Agent the equity interests in such Material DomesticSubsidiary by documents as the Administrative Agent shall deem appropriate forsuch purpose and (iii) deliver to the Administrative Agent documents of thetypes referred to in clauses (iii) and (iv) of Section 4.01(a) andfavorable opinions of counsel to such Person (which shall cover, among otherthings, the legality, validity, binding effect and enforceability of thedocumentation referred to in clauses (i) and (ii) above), all in form, contentand scope reasonably satisfactory to the Administrative Agent.

 

(b)                   NoPUC Subsidiary shall be required to provide a Guaranty pursuant to Section6.12 or Section 6.13(a) unless regulatory approval shall have beenobtained for such Guaranty from the applicable public utility commission orFERC having such regulatory authority over such PUC Subsidiary (in this Sectioncalled the applicable “PUC”).  Borrowershall cause each PUC Subsidiary required to deliver a Guaranty pursuant to Sections6.12 and 6.13(a) to use its best efforts to obtain the approval ofthe applicable PUC for a Guaranty of the Obligations. In the event that theapplicable PUC shall require a Subsidiary to withdraw from the Guaranty, suchSubsidiary may so withdraw and the Administrative Agent shall release suchSubsidiary from the Guaranty; provided that a substitute Subsidiary guarantormeeting the requirements of Sections 6.12 and 6.13 shall haveexecuted and delivered the Guaranty unless all such substitute Subsidiaries arePUC Subsidiaries and are prohibited by the applicable PUC from delivering aGuaranty.

 

(c)                   NoPUC Subsidiary shall be required to execute and deliver any Security Documentpursuant to Sections 6.13(a) or 6.14 unless regulatory approvalshall have been obtained for such Security Document from the applicablePUC.  Borrower shall cause each PUCSubsidiary required to deliver a Security Document pursuant to Sections6.13(a) and/or Section 6.14 to use its best efforts to obtain theapproval of the applicable PUC for such Security Document, granting toAdministrative Agent, for the benefit of the Lenders, Liens and securityinterests in such Collateral as required by Section 6.13(a) and/or Section6.14 (as applicable) to secure the Obligations. In the event that theapplicable PUC shall require that the equity interests of a PUC Subsidiary bereleased from the Lien in favor of the Administrative Agent, the AdministrativeAgent shall so release such equity interests; provided that replacement stockof another Subsidiary acceptable to the Administrative Agent shall have beenpledged to Administrative Agent for the benefit of the Lenders unless all suchsubstitute Subsidiaries are PUC Subsidiaries and are prohibited by theapplicable PUC from having their equity interests pledged to AdministrativeAgent.

 

(d)                   Neitherthis Section 6.13, Section 6.14 nor any other provision of anyLoan Document shall require a Guaranty or a Security Document by a PUCSubsidiary, in either case,

 

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to the extent that such PUC Subsidiary shall nothave obtained the required approval of the applicable PUC after the exercise ofits best efforts in accordance with subsections (b) and (c) of this Section6.13.

 

**6.14        Agreementto Deliver Mortgages****.**  (a) At all times after a Debt Rating Downgrade, the  Obligations shall be secured by first andprior Liens (subject only to Permitted Liens) covering and encumbering 75% ofthe total present value (utilizing Administrative Agent’s usual and customarypricing and discount rates for oil and gas loans, as in effect from time totime) of all oil and gas properties covered by the reserve reports mostrecently delivered to the Administrative Agent (the “Oil and GasCollateral”).  Subject to Section6.13(c), the Borrower shall and shall cause each Subsidiary, to the extentBorrower and each such Subsidiary owns such Oil and Gas Collateral, to deliverto secure the Obligations and the Debt Securities, deeds of trust, mortgages,chattel mortgages, security agreements and other Security Documents which shallbe in substantially the form of Exhibit G for the purpose of granting,confirming, and perfecting first and prior Liens in the Oil and GasCollateral.  Such Security Documentsshall be delivered to the Administrative Agent within ninety (90) days afterthe date hereof, but Administrative Agent shall not record such SecurityDocuments until a Debt Rating Downgrade occurs.

 

(b)           To the extent necessary to complywith the first sentence of Section 6.14(a), within sixty (60) days afterthe delivery of each Engineering Report pursuant to Sections 6.02(g) and6.02(h), the Borrower shall and shall cause each Subsidiary who owns Oiland Gas Collateral to execute and deliver to Administrative Agent, for theratable benefit of each Lender and the holders of the Debt Securities,supplements to the Security Documents delivered pursuant to Section 6.14(a)or new Security Documents substantially in the form of Exhibit G and dulyexecuted by the Borrower and any such Subsidiary (as applicable) together withsuch other assignments, conveyances, amendments, agreements and other writings(each duly authorized and executed) as Administrative Agent shall deemreasonably necessary to grant, evidence and perfect the Liens required by this Section6.14.

 

**6.15        Title Review.** After a Debt Rating Downgrade occurs, and after additional Oil and GasCollateral is delivered pursuant to Section 6.14(b), the Borrower agreesthat the Administrative Agent’s counsel shall be entitled to review the leasefiles for the Oil and Gas Collateral and existing title reports and titleopinions covering such Oil and Gas Collateral. Based upon such review and in order to confirm title of the Borrower andits Subsidiaries to such Oil and Gas Collateral, the Administrative Agent mayrequest, and the Borrower agrees to deliver, within ninety (90) days after anyDebt Rating Downgrade, such additional favorable reports and/or title opinionswhich Required Lenders determine in their reasonable judgment are necessaryfrom Persons acceptable to the Administrative Agent with respect to any Oil andGas Collateral  as designated byAdministrative Agent to confirm that the Borrower and/or its Subsidiaries ownsuch Oil and Gas Collateral free and clear of all Liens except Permitted Liens.

 

**6.16        Perfection and Protection of SecurityInterests and Liens.**  Borrowerwill from time to time deliver, and will cause each of its Subsidiaries fromtime to time to deliver, to Administrative Agent any authorizations to filefinancing statements, extension agreements and other documents, properlycompleted and executed (and acknowledged when required) in form 

 

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and substance reasonably satisfactory toAdministrative Agent, which Administrative Agent requests for the purpose ofperfecting, confirming, or protectingany Liens or other rights in Collateral securing any Obligations.

 

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

## ** **

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

 

**6.19        Limitation on Effectiveness.**Notwithstanding anything to the contrary contained herein or in the Mortgage,none of the terms, conditions and obligations contained in the Mortgage will beeffective or enforceable in any manner whatsoever at any time prior to theoccurrence of a Debt Rating Downgrade. Further, at no time prior to the occurrence of such a Debt RatingDowngrade, shall Administrative Agent, in its capacity as such or in itscapacity as “Collateral Agent” thereunder, or any Lender be entitled to any ofthe rights or remedies contained therein or be entitled to pursue any remedieswhich would otherwise be available to such Person under the terms of theMortgage or at law, in equity or otherwise in connection with theMortgage.  It is not the intent of theBorrower, Administrative Agent or Lenders that the provisions of this Section6.19 violate any applicable law regarding the rule against perpetuities,the suspension of the absolute power of alienation, or other rules regardingthe vesting or duration of estates.  Theprovisions of this Section 6.19 shall be construed as not violating anysuch rule to the extent the same can be so construed consistent with the intentof the parties.  In the event that theprovisions of this Section 6.19 are determined to violate any such rule,then this Section 6.19 shall nevertheless be effective only for themaximum period (but not longer than the maximum period) permitted by such rulethat will result in no violation.  Atsuch time as this Section 6.19 is no longer effective, neither will theMortgage be effective or enforceable. To

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## **the extent the maximum period is permitted tobe determined by reference to “lives in being,” the Borrower, AdministrativeAgent and Lenders hereby  agree that“lives in being” shall refer to the lifetime of the last to die of the livinglineal descendants of the late Joseph P. Kennedy (father of the late Presidentof the United States of America).**

 

# **ARTICLE VII.**

# **NEGATIVE COVENANTS**

 

So long as any Lender shall have anyCommitment hereunder, any Loan or other Obligation hereunder shall remainunpaid or unsatisfied, or any Letter of Credit shall remain outstanding, theBorrower shall not, nor shall it permit any Subsidiary to, directly orindirectly:

## ** **

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

 

(a)           Lienspursuant to any Loan Document;

 

(b)           Liensexisting on the date hereof and listed on **Schedule 7.01** and any renewals orextensions thereof, provided that the property covered thereby is notincreased and any renewal or extension of the obligations secured or benefitedthereby is permitted by Section 7.03(b);

 

(c)           Liensfor taxes not yet due or which are being contested in good faith and byappropriate proceedings diligently conducted, if adequate reserves with respectthereto are maintained on the books of the applicable Person in accordance withGAAP;

 

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

 

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

 

(f)            depositsto secure the performance of bids, trade contracts and leases (other thanIndebtedness), statutory obligations, surety bonds (other than bonds related tojudgments or litigation), performance bonds and other obligations of a likenature incurred in the ordinary course of business;

 

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

 

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

 

(h)           Lienssecuring judgments for the payment of money not constituting an Event ofDefault under Section 8.01(h) or securing appeal or other surety bondsrelated to such judgments;

 

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

 

(j)            Ifthe Company and/or any Subsidiary has delivered Mortgages to AdministrativeAgent pursuant to Section 6.14, Liens in favor of Prudential InsuranceCompany of America.

 

(k)           Lienson margin accounts established in connection with Swap Contracts permittedunder Section 7.11.

## ** **

**7.02        Investments.**Make any Investments,except:

 

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

 

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

 

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

 

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

 

(e)           acquisitions of or investments in gasprocessing, treating, fractionation, transmission, gathering and storagefacilities, and domestic oil and gas properties (whether in the United Statesor Canada);

 

(f)            loansmade by Borrower to its employees pursuant to the Stock Option Agreements;provided that the aggregate outstanding amount of all such loans so made shallnot exceed $10,000,000;

 

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

 

(h)           Investmentsof the Borrower in any Guarantor andInvestments of any Guarantor inthe Borrower or in another Guarantor;

 

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(i)            Investmentsconsisting of extensions of credit in the nature of accounts receivable ornotes receivable arising from the grant of trade credit in the ordinary courseof business, and Investments received in satisfaction or partial satisfactionthereof from financially troubled account debtors to the extent reasonablynecessary in order to prevent or limit loss;

 

(j)            Guaranteespermitted by Section 7.03;

 

(k)           Investmentsof the Borrower or any Subsidiary made pursuant to any Swap Contract permittedunder Section 7.11; and

 

(l)            otherInvestments not exceeding $5,000,000 in the aggregate in any fiscal year of theBorrower.

## ** **

7**.03        Indebtedness.** Create, incur, assume or sufferto exist any Indebtedness, except (without duplication):

 

(a)           Indebtednessunder the Loan Documents;

 

(b)           Indebtednessoutstanding on the date hereof and listed on **Schedule 7.03** and anyrefinancings, refundings, renewals or extensions thereof; provided thatthe amount of such Indebtedness is not increased at the time of suchrefinancing, refunding, renewal or extension except by an amount equal to areasonable premium or other reasonable amount paid, and fees and expensesreasonably incurred, in connection with such refinancing and by an amount equalto any existing commitments unutilized thereunder;

 

(c)           Guaranteesof the Borrower or any Guarantorin respect of Indebtedness otherwise permitted hereunder of the Borrower;

 

(d)           Indebtedness(contingent or otherwise) of the Borrower or any Subsidiary existing or arisingunder any Swap Contract permitted under Section [7.11]; provided thatsuch Swap Contract does not contain any provision exonerating thenon-defaulting party from its obligation to make payments on outstandingtransactions to the defaulting party;

 

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

 

(f)            unsecuredIndebtedness between Borrower and any Guarantor;

 

(g)           Indebtednessunder the Debt Securities;

 

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

 

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

 

(j)            unsecuredIndebtedness of the Borrower not described in subsections (a) through (i) abovewhich meets the following requirements: (A) the documentation evidencing suchIndebtedness shall contain no terms, conditions or defaults (other thanpricing) which are more favorable to the third party creditor than thosecontained in this Agreement are to Lenders, as determined by Required Lendersin their discretion (provided that Required Lenders shall make any suchdetermination considering any amendments or modifications to this Agreementexisting at the time of the incurrence of such Indebtedness) and shall notcontain any provision which attempts to modify, amend or restrict any of therights or remedies of Agent or Lenders hereunder or under any of the other LoanDocuments, (B) such Indebtedness shall have no scheduled principal payments dueprior to the final maturity of the Obligations, (C) at the time the Borrower incurssuch Indebtedness, no Default or Event of Default shall have occurred and becontinuing hereunder and (D) if such Indebtedness is to be guaranteed by anyAffiliate of the Borrower, then such third party lender(s) must enter into aninter-creditor agreement with Lenders, in form, scope and substance which isacceptable to Required Lenders, as evidenced by their written consent;

 

(k)           CPDebt; and

 

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

## ** **

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

 

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

 

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

 

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

 

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

 

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

## ** **

**7.05        Dispositions.** Make any Disposition orenter into any agreement to make any Disposition, except:

 

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

 

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

 

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

 

(d)           Dispositionsof property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary; providedthat if the transferor of such property is a Guarantor, the transferee thereofmust either be the Borrower or a Guarantor;

 

(e)           Dispositionspermitted by Section 7.04**;**

 

(f)            Dispositions of property by the Borrower andits Subsidiaries in arms’ length transactions to third parties that are notAffiliates of the Borrower for consideration (i) solely in property similar tothe property being disposed of and (ii) with a fair market value that isequivalent to the fair market value of the property being disposed of; and

 

(g)           Dispositions by the Borrower and itsSubsidiaries in arms’ length transactions to third parties that are notAffiliates of the Borrower and which are not otherwise covered by this Section7.05 for consideration equal to the fair market value thereof; providedthat (i) at the time of such Disposition, no Default shall exist or wouldresult from such Disposition and (ii) the aggregate book value of all propertyDisposed of in reliance on this clause (f) in any fiscal year shall not exceed$35,000,000.

## ** **

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

 

(a)           theBorrower may declare and make dividend payments to its shareholders so long asno Default or Event of Default exists at the time such dividend is declared orpaid or would occur as a result thereof;

 

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

 

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(c)           theBorrower and each Subsidiary may declare and make dividend payments or otherdistributions payable solely in the common stock or other common equityinterests of such Person;

 

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

 

(e)           theBorrower and each Subsidiary may purchase, redeem or otherwise acquire sharesof its common stock or other common equity interests or warrants or options toacquire any such shares with the proceeds received from the substantiallyconcurrent issue of new shares of its common stock or other common equityinterests;

 

(f)            theBorrower may make Restricted Payments with respect to the Debt Securities solong as no Default or Event of Default exists at the time thereof or will occuras a result thereof.

## ** **

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

## ** **

## **7.08        Transactions with Affiliates.**Enter into any transaction of any kind with any Affiliate of theBorrower, whether or not in the ordinary course of business, other than on fairand reasonable terms substantially as favorable to the Borrower or suchSubsidiary as would be obtainable by the Borrower or such Subsidiary at thetime in a comparable arm’s length transaction with a Person other than anAffiliate, provided that the foregoing restriction shall not apply totransactions between or among the Borrower and any Guarantor or between andamong any Guarantors.

## ** **

## **7.09        Burdensome Agreements.**  Enter intoany Contractual Obligation (other than this Agreement, any other Loan Document,the Contractual Obligations entered into pursuant to the Debt Securities, andthe Indenture) that (a) limits the ability (i) of any Subsidiary to makeRestricted Payments to the Borrower or any Guarantor or to otherwise transferproperty to the Borrower or any Guarantor, (ii) of any Subsidiary to Guaranteethe Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary tocreate, incur, assume or suffer to exist Liens on property of such Person; provided,however, that this clause (iii) shall not prohibit any negative pledgeincurred or provided in favor of any holder of Indebtedness permitted under Section7.03(e) solely to the extent any such negative pledge relates to theproperty financed by or the subject of such Indebtedness; or (b) requiresthe grant of a Lien to secure an obligation of such Person if a Lien is grantedto secure another obligation of such Person.

## ** **

## **7.10        Use of Proceeds.**Use theproceeds of any Credit Extension, whether directly or indirectly, and whetherimmediately, incidentally or ultimately, to purchase or carry margin stock(within the meaning of Regulation U of the FRB) or to extend credit to othersfor the purpose of purchasing or carrying margin stock or to refundindebtedness originally incurred for such purpose.

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**7.11        Limitation for Net Products Exposure.** Enter into, orotherwise be a party to any Swap Contract that does not comply with the RiskManagement Policy.  Furthermore, theaggregate value at risk, or VaR limits (as defined below), calculated inaccordance with the Risk Management Policy, shall not at any time exceed$5,000,000.  For purposes of this Section7.11, the term “VaR limits” means the maximum allowable change in aggregatemark-to-market (i.e., unrealized losses) dollars, with a given probability,over a one-day time horizon (as provided in the Risk Management Policy).

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**7.12        Financial Covenants.**

 

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

 
| **Four Fiscal Quarters Ending**                    |   | **Minimum  Fixed Charge Coverage  Ratio** |   |
|----------------------------------------------------|--------|-------------------------------------------|--------|
|                                               |   |                                      |   |
| Closing through December  31, 2003                 |   | 3.25 to 1.0                               |   |
| March 31, 2004 through  December 31, 2004          |   | 3.75 to 1.0                               |   |
| March 31, 2005 and each  fiscal quarter thereafter |   | 4.25 to 1.0                               |   |

 

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

 

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

# **ARTICLE VIII.**EVENTS OF DEFAULT AND REMEDIES

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## **8.01        Events ofDefault.**Any ofthe following shall constitute an Event of Default:

 

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

 

(b)           SpecificCovenants.  The Borrower fails toperform or observe any term, covenant or agreement contained in any of Section6.03, Sections 6.12 through 6.16 or Article VII; or

 

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

 

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(d)           Representationsand Warranties.  Any representation,warranty, certification or statement of fact made or deemed made by or onbehalf of the Borrower or any other Loan Party herein, in any other LoanDocument, or in any document delivered in connection herewith or therewithshall be incorrect or misleading when made or deemed made and suchrepresentation or warranty does not become true and correct within thirty (30)days; or

 

(e)           Cross-Default.

 

(i)                            the Borrower or anySubsidiary (A) fails to make any payment when due (whether by scheduledmaturity, required prepayment, acceleration, demand, or otherwise) in respectof any of the Debt Securities or the Subordinated Debt, or (B) fails to observeor perform any other agreement or condition relating to the Debt Securities orthe Subordinated Debt, or any other event occurs, in the instance of both thecircumstances of (i)(A) and (i)(B), the effect of which default or other eventis to cause, or to permit the holder or holders of such Indebtedness (or atrustee or agent on behalf of such holder or holders or beneficiary orbeneficiaries) to cause, with the giving of notice if required, suchIndebtedness to be demanded or to become due or to be repurchased, prepaid,defeased or redeemed (automatically or otherwise), or an offer to repurchase,prepay, defease or redeem such Indebtedness to be made, prior to its statedmaturity; or

 

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

 

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

 

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aggregateamount of all such payments for which Borrower is obligated under SwapContracts at any time exceeds $10,000,000; or

 

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

 

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

 

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

 

(i)            ERISA.  (i) An ERISA Event occurs with respect to aPension Plan or Multiemployer Plan which has resulted or could reasonably beexpected to result in liability of the Borrower under Title IV of ERISA to thePension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excessof $10,000,000, or (ii) the Borrower or any ERISA Affiliate fails to pay whendue, after the expiration of any applicable grace period, any installmentpayment with respect to its withdrawal liability under Section 4201 of ERISAunder a Multiemployer Plan in an aggregate amount in excess of $10,000,000; or

 

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

 

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

 

(l)            DebtSecurities.  Without the expressprior written consent of Required Lenders, the Borrower amends or modifies theterms of any of the documents or instruments governing, or otherwise executedin connection with, any of the Debt Securities (including, but not limited to,an amendment or modification to shorten the maturity of the Debt Securities orincrease the maximum principal amount of the Debt Securities); provided,however, that without the consent of any Lender, the Borrower may amend suchdocuments or instruments (1) to increase the interest rate or fees payableunder or with respect to the Debt Securities, (2) to conform to amendments ormodifications made to the Loan Documents, and (3) to make changes in theadministration of the Debt Securities; or

 

(m)          SubordinatedDebt.  Without the express priorwritten consent of Required Lenders, the Borrower amends or modifies the termsof any of the documents or instruments governing, or otherwise executed inconnection with, the Subordinated Debt, including but not limited to, anamendment or modification to (a) shorten the maturity of the SubordinatedDebt, (b) increase the maximum principal amount of the Subordinated Debt,or (c) modify the terms of the subordination of the Subordinated Debt to theSenior Debt; or

 

(n)           PreferredStock.  Without the express priorwritten consent of Required Lenders, the Borrower amends or modifies any termof the Preferred Stock.

## ** **

## **8.02        Remedies Upon Event of Default.**If any Event of Default occurs and is continuing,the Administrative Agent shall, at the request of, or may, with the consent of,the Required Lenders, take any or all of the following actions:

 

(a)           declarethe commitment of each Lender to make Loans and any obligation of the L/CIssuer to make L/C Credit Extensions to be terminated, whereupon suchcommitments and obligation shall be terminated;

 

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

 

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

 

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

 

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

 

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obligation of the Borrower to CashCollateralize the L/C Obligations as aforesaid shall automatically becomeeffective, in each case without further act of the Administrative Agent or anyLender.

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

 

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

 

Second, to payment ofthat portion of the Obligations constituting fees, indemnities and otheramounts (other than principal and interest) payable to the Lenders (includingAttorney Costs and amounts payable under Article III), ratably amongthem in proportion to the amounts described in this clause Secondpayable to them;

 

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

 

Fourth, to payment ofthat portion of the Obligations constituting unpaid principal of the Loans andL/C Borrowings, ratably among the Lenders in proportion to the respectiveamounts described in this clause Fourth held by them;

 

Fifth, to theAdministrative Agent for the account of the L/C Issuer, to Cash Collateralizethat portion of L/C Obligations comprised of the aggregate undrawn amount ofLetters of Credit; and

 

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

 

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

 

# **ARTICLE IX.**ADMINISTRATIVE AGENT

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## **9.01        Appointment and Authorization ofAdministrative Agent.**

 

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

 

(b)           TheL/C Issuer shall act on behalf of the Lenders with respect to any Letters ofCredit issued by it and the documents associated therewith, and the L/C Issuershall have all of the benefits and immunities (i) provided to theAdministrative Agent in this Article IX with respect to any acts takenor omissions suffered by the L/C Issuer in connection with Letters of Creditissued by it or proposed to be issued by it and the applications and agreementsfor letters of credit pertaining to such Letters of Credit as fully as if theterm “Administrative Agent” as used in this Article IX and in the definitionof “Agent-Related Person” included the L/C Issuer with respect to such acts oromissions, and (ii) as additionally provided herein with respect to the L/CIssuer.

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

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**9.03        Liability of Administrative Agent.** NoAgent-Related Person shall (a) be liable for any action taken or omitted to betaken by any of them under or in connection with this Agreement or any otherLoan Document or the transactions contemplated hereby (in all cases, whether ornot arising, in whole or in part, out of the negligence of such Agent-RelatedPerson, except for its own gross negligence or willful misconduct in connectionwith its duties expressly set forth herein), or (b) be responsible in anymanner to any Lender or participant for any recital, statement, representationor warranty made by any Loan Party or any officer thereof, contained herein orin any other Loan Document, or in any certificate, report, statement or otherdocument referred to or provided for in, or received by the AdministrativeAgent under or in connection with, this Agreement or any other Loan Document,or the validity, effectiveness, genuineness, enforceability or sufficiency ofthis Agreement or any other Loan Document, or for any failure of

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## **any Loan Party or any other party to any LoanDocument to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under anyobligation to any Lender or participant to ascertain or to inquire as to theobservance or performance of any of the agreements contained in, or conditionsof, this Agreement or any other Loan Document, or to inspect the properties,books or records of any Loan Party or any Affiliate thereof.**

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**9.04        Reliance by Administrative Agent.**

 

(a)           TheAdministrative Agent shall be entitled to rely, and shall be fully protected inrelying, upon any writing, communication, signature, resolution,representation, notice, consent, certificate, affidavit, letter, telegram,facsimile, telex or telephone message, electronic mail message, statement or otherdocument or conversation believed by it to be genuine and correct and to havebeen signed, sent or made by the proper Person or Persons, and upon advice andstatements of legal counsel (including counsel to any Loan Party), independentaccountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fullyjustified in failing or refusing to take any action under any Loan Documentunless it shall first receive such advice or concurrence of the RequiredLenders as it deems appropriate and, if it so requests, it shall first beindemnified to its satisfaction by the Lenders against any and all liabilityand expense which may be incurred by it by reason of taking or continuing totake any such action.  The AdministrativeAgent shall in all cases be fully protected in acting, or in refraining fromacting, under this Agreement or any other Loan Document in accordance with arequest or consent of the Required Lenders (or such greater number of Lendersas may be expressly required hereby in any instance) and such request and anyaction taken or failure to act pursuant thereto shall be binding upon all theLenders.

 

(b)           Forpurposes of determining compliance with the conditions specified in Section4.01, each Lender that has signed this Agreement shall be deemed to haveconsented to, approved or accepted or to be satisfied with, each document orother matter required thereunder to be consented to or approved by oracceptable or satisfactory to a Lender unless the Administrative Agent shallhave received notice from such Lender prior to the proposed Closing Datespecifying its objection thereto.

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

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**9.06        Credit Decision; Disclosure ofInformation by Administrative Agent.** Each Lender acknowledgesthat no Agent-Related Person has made any representation or warranty to it, andthat no act by the Administrative Agent hereafter taken, including any consentto and acceptance of any assignment or review of the affairs of any Loan Partyor any Affiliate thereof, shall be deemed to constitute any representation orwarranty by any Agent-Related Person to any Lender as to any matter, includingwhether Agent-Related Persons have disclosed material information in their possession.  Each Lender represents to the AdministrativeAgent that it has, independently and without reliance upon any Agent-RelatedPerson and based on such documents and information as it has deemedappropriate, made its own appraisal of and investigation into the business,prospects, operations, property, financial and other condition andcreditworthiness of the Loan Parties and their respective Subsidiaries, and allapplicable bank or other regulatory Laws relating to the transactionscontemplated hereby, and made its own decision to enter into this Agreement andto extend credit to the Borrower hereunder. Each Lender also represents that it will, independently and withoutreliance upon any Agent-Related Person and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit analysis, appraisals and decisions in taking or not taking action underthis Agreement and the other Loan Documents, and to make such investigations asit deems necessary to inform itself as to the business, prospects, operations,property, financial and other condition and creditworthiness of theBorrower.  Except for notices, reportsand other documents expressly required to be furnished to the Lenders by theAdministrative Agent herein, the Administrative Agent shall not have any dutyor responsibility to provide any Lender with any credit or other informationconcerning the business, prospects, operations, property, financial and othercondition or creditworthiness of any of the Loan Parties or any of theirrespective Affiliates which may come into the possession of any Agent-RelatedPerson.

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**4.07        Indemnification of AdministrativeAgent.** Whether or not the transactions contemplated herebyare consummated, the Lenders shall indemnify upon demand each Agent-RelatedPerson (to the extent not reimbursed by or on behalf of any Loan Party andwithout limiting the obligation of any Loan Party to do so), pro rata, and holdharmless each Agent-Related Person from and against any and all IndemnifiedLiabilities incurred by it, including any Indemnified Liabilities **in all cases, whether or not caused by or arising, inwhole or in part, out of the negligence of the Indemnitee**; provided,however, that no Lender shall be liable for the payment to anyAgent-Related Person of any portion of such Indemnified Liabilities to theextent determined in a final, nonappealable judgment by a court of competentjurisdiction to have resulted from such Agent-Related Person’s own grossnegligence or willful misconduct; provided, however, that noaction taken in accordance with the directions of the Required Lenders shall bedeemed to constitute gross negligence or willful misconduct for purposes ofthis Section.  Without limitation of theforegoing, each Lender shall reimburse the Administrative Agent upon demand forits ratable share of any costs or out-of-pocket expenses (including AttorneyCosts) incurred by the Administrative Agent in connection with the preparation,execution, delivery, administration, modification, amendment or enforcement(whether through negotiations, legal proceedings or otherwise) of, or legaladvice in respect of rights or responsibilities under, this Agreement, anyother Loan Document, or any document contemplated by or referred to herein, tothe extent that the Administrative Agent is not reimbursed for such expenses byor on behalf of the Borrower.  Theundertaking in this Section

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## **shall survive termination of the AggregateCommitments, the payment of all other Obligations and the resignation of theAdministrative Agent.**

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

 

**9.09        Successor Administrative Agent.** TheAdministrative Agent may resign as Administrative Agent upon 30 days’ notice tothe Lenders; provided that any such resignation by Bank of America shall alsoconstitute its resignation as L/C Issuer. If the Administrative Agent resigns under this Agreement, the RequiredLenders shall appoint from among the Lenders a successor administrative agentfor the Lenders, which successor administrative agent shall be consented to bythe Borrower at all times other than during the existence of an Event ofDefault (which consent of the Borrower shall not be unreasonably withheld ordelayed).  If no successoradministrative agent is appointed prior to the effective date of theresignation of the Administrative Agent, the Administrative Agent may appoint,after consulting with the Lenders and the Borrower, a successor administrativeagent from among the Lenders.  Upon theacceptance of its appointment as successor administrative agent hereunder, thePerson acting as such successor administrative agent shall succeed to all therights, powers and duties of the retiring Administrative Agent and L/C Issuerand the respective terms “Administrative Agent” and “L/C Issuer” shall meansuch successor administrative agent, Letter of Credit issuer and the retiringAdministrative Agent’s appointment, powers and duties as Administrative Agentshall be terminated and the retiring L/C Issuer’s rights, powers and duties assuch shall be terminated, without any other or further act or deed on the partof such retiring L/C Issuer or any other Lender, other than the obligation ofthe successor L/C Issuer to issue letters of credit in substitution for theLetters of Credit, if any, outstanding at the time of such succession or tomake other arrangements satisfactory to the retiring L/C Issuer to effectivelyassume the obligations of the retiring L/C Issuer with respect to such Lettersof Credit.  After any retiringAdministrative Agent’s resignation hereunder as Administrative Agent, theprovisions of this Article IX and Sections 10.04 and 10.05shall inure to its benefit as to any actions taken or omitted to be taken by itwhile it was Administrative Agent under this Agreement.  If no successor administrative agent hasaccepted appointment as Administrative Agent by the date which is 30 daysfollowing a retiring Administrative Agent’s notice of resignation, the retiringAdministrative Agent’s resignation shall nevertheless thereupon becomeeffective and the Lenders shall perform all of the duties of the AdministrativeAgent hereunder until such time, if any, as the Required Lenders appoint asuccessor agent as provided for above.

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**9.10        Administrative Agent May File Proofs ofClaim.** In case of the pendency of any receivership,insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,composition or other judicial proceeding relative to any Loan Party, theAdministrative Agent (irrespective of whether the principal of any Loan or L/CObligation shall then be due and payable as herein expressed or by declarationor otherwise and irrespective of whether the Administrative Agent shall havemade any demand on the Borrower) shall be entitled and empowered, by interventionin such proceeding or otherwise

 

(a)         to file and prove a claim for the wholeamount of the principal and interest owing and unpaid in respect of the Loans,L/C Obligations and all other Obligations that are owing and unpaid and to filesuch other documents as may be necessary or advisable in order to have theclaims of the Lenders and the Administrative Agent (including any claim for thereasonable compensation, expenses, disbursements and advances of the Lendersand the Administrative Agent and their respective agents and counsel and allother amounts due the Lenders and the Administrative Agent under Sections2.03(i) and (j), 2.08 and 10.04) allowed in suchjudicial proceeding; and

 

(b)         to collect and receive any monies orother property payable or deliverable on any such claims and to distribute thesame;

 

and any custodian, receiver, assignee,trustee, liquidator, sequestrator or other similar official in any suchjudicial proceeding is hereby authorized by each Lender to make such paymentsto the Administrative Agent and, in the event that the Administrative Agentshall consent to the making of such payments directly to the Lenders, to pay tothe Administrative Agent any amount due for the reasonable compensation,expenses, disbursements and advances of the Administrative Agent and its agentsand counsel, and any other amounts due the Administrative Agent under Sections2.08 and 10.04.

 

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

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

 

(a)           to release any Lien on any propertygranted to or held by the Administrative Agent under any Loan Document (i) upontermination of the Aggregate Commitments and payment in full of all Obligations(other than contingent indemnification obligations) and the expiration ortermination of all Letters of Credit, (ii) that is part of a Dispositionof property permitted hereunder or under any other Loan Document or ispermitted to be released under Section 6.13, or (iii) subject to Section10.01, if approved, authorized or ratified in writing by the RequiredLenders;

 

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(b)           to subordinate anyLien on any property granted to or held by the Administrative Agent under anyLoan Document to the holder of any Lien on such property that is permitted by Section7.01(i); and

 

(c)           to release any Guarantor from its obligations under theGuaranty if such Person ceases to be a Subsidiary as a result of a transactionpermitted hereunder or ceases to be a Guarantor as provided under Section6.13.

 

Upon request by the Administrative Agent atany time, the Required Lenders will confirm in writing the AdministrativeAgent’s authority to release orsubordinate its interest in particular types or items of property, or to releaseany Guarantor from its obligations under the Guaranty pursuant to this Section9.11.

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**9.12        Other Agents; Arrangers and Managers.** None of theLenders or other Persons identified on the facing page or signature pages ofthis Agreement as a “syndication agent,” “documentation agent,” “co-agent,”“book manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger”shall have any right, power, obligation, liability, responsibility or dutyunder this Agreement other than, in the case of such Lenders, those applicableto all Lenders as such.  Withoutlimiting the foregoing, none of the Lenders or other Persons so identifiedshall have or be deemed to have any fiduciary relationship with anyLender.  Each Lender acknowledges thatit has not relied, and will not rely, on any of the Lenders or other Persons soidentified in deciding to enter into this Agreement or in taking or not takingaction hereunder.

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# **ARTICLE X.**MISCELLANEOUS

 

## **10.01      Amendments,Etc.**No amendment orwaiver of any provision of this Agreement or any other Loan Document, and noconsent to any departure by the Borrower or any other Loan Party therefrom, shallbe effective unless in writing signed by the Required Lenders and the Borroweror the applicable Loan Party, as the case may be, and acknowledged by theAdministrative Agent, and each such waiver or consent shall be effective onlyin the specific instance and for the specific purpose for which given; provided,however, that no such amendment, waiver or consent shall:

 

(a)           waiveany condition set forth in Section 4.01(a) or (b) without the writtenconsent of each Lender;

 

(b)           extendor increase the Commitment of any Lender (or reinstate any Commitmentterminated pursuant to Section 8.02) without the written consent of suchLender;

 

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

 

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

 

(e)           changeSection 2.12 or Section 8.03 in a manner that would alter the prorata sharing of payments required thereby without the written consent of eachLender;

 

(f)            changeany provision of this Section or the definition of “Required Lenders” or anyother provision hereof specifying the number or percentage of Lenders requiredto amend, waive or otherwise modify any rights hereunder or make anydetermination or grant any consent hereunder, without the written consent ofeach Lender;

 

(g)           release any Guarantor from the Guarantywithout the written consent of each Lender unless authorized by Section 6.13or Section 9.11(c) or required by any applicable PUC or FERC; or

 

(h)           release any Collateral from any SecurityDocument without the written consent of each Lender unless authorized suchrelease is authorized by Section 6.13 or Section 9.11(a) orrequired by any applicable PUC or FERC.

 

and, providedfurther, that (i)no amendment, waiver or consent shall, unless in writing and signed by the L/CIssuer in addition to the Lenders required above, affect the rights or dutiesof the L/C Issuer under this Agreement or any Letter of Credit Applicationrelating to any Letter of Credit issued or to be issued by it; (ii) noamendment, waiver or consent shall, unless in writing and signed by theAdministrative Agent in addition to the Lenders required above, affect therights or duties of the Administrative Agent under this Agreement or any otherLoan Document; and (iii) the Fee Letter may be amended, or rights or privilegesthereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contraryherein, no Defaulting Lender shall have any right to approve or disapprove anyamendment, waiver or consent hereunder, except that the Commitment of suchLender may not be increased or extended without the consent of such Lender.

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## **10.02      Notices and Other Communications;Facsimile Copies.**

 

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

 

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communications expressly permitted hereunderto be given by telephone shall be made to the applicable telephone number, asfollows:

 

(i)                            if to the Borrower,the Administrative Agent or the L/C Issuer, to the address, facsimile number,electronic mail address or telephone number specified for such Person on **Schedule10.02** or to such other address, facsimile number, electronic mailaddress or telephone number as shall be designated by such party in a notice tothe other parties; and

 

(ii)                           if to any otherLender, to the address, facsimile number, electronic mail address or telephonenumber specified in its Administrative Questionnaire or to such other address,facsimile number, electronic mail address or telephone number as shall bedesignated by such party in a notice to the Borrower, the Administrative Agentand the L/C Issuer.

 

All such notices and other communicationsshall be deemed to be given or made upon the earlier to occur of (i) actualreceipt by the relevant party hereto and (ii) (A) if delivered by hand or bycourier, when signed for by or on behalf of the relevant party hereto; (B) ifdelivered by mail, four Business Days after deposit in the mails, postageprepaid; (C) if delivered by facsimile, when sent and receipt has beenconfirmed by telephone; and (D) if delivered by electronic mail (which form ofdelivery is subject to the provisions of subsection (c) below), when delivered;provided, however, that notices and other communications to theAdministrative Agent and the L/C Issuer pursuant to Article II shall notbe effective until actually received by such Person.  In no event shall a voicemail message be effective as a notice,communication or confirmation hereunder.

 

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

 

(c)           LimitedUse of Electronic Mail.  Electronicmail and Internet and intranet websites may be used only to distribute routinecommunications, such as financial statements and other information as providedin Section 6.02, and to distribute Loan Documents for execution by theparties thereto, and may not be used for any other purpose.

 

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

 

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liabilities resulting from the reliance bysuch Person on each notice purportedly given by or on behalf of theBorrower.  All telephonic notices to andother communications with the Administrative Agent may be recorded by theAdministrative Agent, and each of the parties hereto hereby consents to suchrecording.

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## **10.03      No Waiver; Cumulative Remedies.**No failure by any Lender or the Administrative Agentto exercise, and no delay by any such Person in exercising, any right, remedy,power or privilege hereunder shall operate as a waiver thereof; nor shall anysingle or partial exercise of any right, remedy, power or privilege hereunderpreclude any other or further exercise thereof or the exercise of any otherright, remedy, power or privilege.  Therights, remedies, powers and privileges herein provided are cumulative and notexclusive of any rights, remedies, powers and privileges provided by law.

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## **10.04      AttorneyCosts, Expenses and Taxes.**The Borrower agrees (a) to pay or reimburse the Administrative Agentfor all reasonable costs and expenses incurred in connection with thedevelopment, preparation, negotiation and execution of this Agreement and theother Loan Documents and any amendment, waiver, consent or other modificationof the provisions hereof and thereof (whether or not the transactionscontemplated hereby or thereby are consummated), and the consummation andadministration of the transactions contemplated hereby and thereby, includingall Attorney Costs, and (b) to pay or reimburse the Administrative Agent andeach Lender for all reasonable costs and expenses incurred in connection withthe enforcement, attempted enforcement, or preservation of any rights orremedies under this Agreement or the other Loan Documents (including all such costsand expenses incurred during any “workout” or restructuring in respect of theObligations and during any legal proceeding, including any proceeding under anyDebtor Relief Law), including all Attorney Costs.  The foregoing costs and expenses shall include all reasonablesearch, filing, recording, title insurance and appraisal charges and fees andtaxes related thereto, and other out-of-pocket expenses incurred by theAdministrative Agent and the reasonable cost of independent public accountantsand other outside experts retained by the Administrative Agent or anyLender.  All amounts due under this Section10.04 shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall survivethe termination of the Aggregate Commitments and repayment of all otherObligations.

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## **10.05      Indemnification by the Borrower.**Whether or not the transactions contemplated herebyare consummated, the Borrower shall indemnify and hold harmless eachAgent-Related Person, each Lender and their respective Affiliates, directors,officers, employees, counsel, agents and attorneys-in-fact (collectively the “Indemnitees”)from and against any and all liabilities, obligations, losses, damages,penalties, claims, demands, actions, judgments, suits, costs, expenses anddisbursements (including Attorney Costs) of any kind or nature whatsoever whichmay at any time be imposed on, incurred by or asserted against any suchIndemnitee in any way relating to or arising out of or in connection with (a)the execution, delivery, enforcement, performance or administration of any LoanDocument or any other agreement, letter or instrument delivered in connectionwith the transactions contemplated thereby or the consummation of thetransactions contemplated thereby, (b) any Commitment, Loan or Letter ofCredit or the use or proposed use of the proceeds therefrom (including anyrefusal by the L/C Issuer to honor a demand for payment under a Letter ofCredit if the documents presented in

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## **connection with such demand do not strictlycomply with the terms of such Letter of Credit),** (c) any actual or alleged presence orrelease of Hazardous Materials on or from any property currently or formerlyowned or operated by the Borrower, any Subsidiary or any other Loan Party, orany Environmental Liability related in any way to the Borrower, any Subsidiaryor any other Loan Party, or (d) anyactual or prospective claim, litigation, investigation or proceeding relatingto any of the foregoing, whether based on contract, tort or any other theory(including any investigation of, preparation for, or defense of any pending orthreatened claim, investigation, litigation or proceeding) and regardless ofwhether any Indemnitee is a party thereto (all the foregoing, collectively, the“Indemnified Liabilities”), in all cases, whether or not causedby or arising, in whole or in part, out of the negligence of the Indemnitee;provided that such indemnity shall not, asto any Indemnitee, be available to the extent that such liabilities,obligations, losses, damages, penalties, claims, demands, actions, judgments,suits, costs, expenses or disbursements are determined by a court of competentjurisdiction by final and nonappealable judgment to have resulted from thegross negligence or willful misconduct of such Indemnitee.  No Indemnitee shall be liable for anydamages arising from the use by others of any information or other materialsobtained through IntraLinks or other similar information transmission systemsin connection with this Agreement, nor shall any Indemnitee have any liabilityfor any indirect or consequential damages relating to this Agreement or anyother Loan Document or arising out of its activities in connection herewith ortherewith (whether before or after the Closing Date).  All amounts due under this Section 10.05 shall be payablewithin ten Business Days after demand therefor.  The agreements in this Section shall survive the resignation ofthe Administrative Agent, the replacement of any Lender, the termination of theAggregate Commitments and the repayment, satisfaction or discharge of all theother Obligations.

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## **10.06      Payments Set Aside.**To the extent that any payment by or on behalf ofthe Borrower is made to the Administrative Agent or any Lender, or theAdministrative Agent or any Lender exercises its right of set-off, and suchpayment or the proceeds of such set-off or any part thereof is subsequentlyinvalidated, declared to be fraudulent or preferential, set aside or required(including pursuant to any settlement entered into by the Administrative Agentor such Lender in its discretion) to be repaid to a trustee, receiver or anyother party, in connection with any proceeding under any Debtor Relief Law orotherwise, then (a) to the extent of such recovery, the obligation or partthereof originally intended to be satisfied shall be revived and continued infull force and effect as if such payment had not been made or such set-off hadnot occurred, and (b) each Lender severally agrees to pay to the AdministrativeAgent upon demand its applicable share of any amount so recovered from orrepaid by the Administrative Agent, plus interest thereon from the date of suchdemand to the date such payment is made at a rate per annum equal to theFederal Funds Rate from time to time in effect.

## **10.07      Successors and Assigns.**

 

(a)           Theprovisions of this Agreement shall be binding upon and inure to the benefit ofthe parties hereto and their respective successors and assigns permitted hereby,except that the Borrower may not assign or otherwise transfer any of its rightsor obligations hereunder without the prior written consent of each Lender andno Lender may assign or otherwise transfer any of its rights or obligationshereunder except (i) to an Eligible Assignee in accordance with the

 

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provisions of subsection (b) of this Section,(ii) by way of participation in accordance with the provisions of subsection(d) of this Section, or (iii) byway of pledge or assignment of a security interest subject to the restrictionsof subsection (f) of this Section (and any other attempted assignment ortransfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall beconstrued to confer upon any Person (other than the parties hereto, theirrespective successors and assigns permitted hereby, Participants to the extentprovided in subsection (d) of this Section and, to the extent expresslycontemplated hereby, the Indemnitees) any legal or equitable right, remedy orclaim under or by reason of this Agreement.

 

(b)           AnyLender may at any time assign to one or more Eligible Assignees all or aportion of its rights and obligations under this Agreement (including all or aportion of its Commitment and the Loans (including for purposes of thissubsection (b), participations in L/C Obligations) at the time owing to it); providedthat (i) except in the case of an assignment of the entire remaining amount ofthe assigning Lender’s Commitment and the Loans at the time owing to it or inthe case of an assignment to a Lender or an Affiliate of a Lender or anApproved Fund (as defined in subsection (g) of this Section) with respect to aLender, the aggregate amount of the Commitment (which for this purpose includesLoans outstanding thereunder) subject to each such assignment, determined as ofthe date the Assignment and Assumption with respect to such assignment isdelivered to the Administrative Agent or, if “Trade Date” is specified in theAssignment and Assumption, as of the Trade Date, shall not be less than$5,000,000 unless each of the Administrative Agent and, so long as no Event ofDefault has occurred and is continuing, the Borrower otherwise consents (eachsuch consent not to be unreasonably withheld or delayed); (ii) each partialassignment shall be made as an assignment of a proportionate part of all theassigning Lender’s rights and obligations under this Agreement with respect tothe Loans or the Commitment assigned; (iii) any assignment of a Commitment mustbe approved by the Administrative Agent and the L/C Issuer unless the Personthat is the proposed assignee is itself a Lender (whether or not the proposedassignee would otherwise qualify as an Eligible Assignee); and (iv) the partiesto each assignment shall execute and deliver to the Administrative Agent anAssignment and Assumption, together with a processing and recordation fee of$3,500.  Subject to acceptance and recordingthereof by the Administrative Agent pursuant to subsection (c) of this Section,from and after the effective date specified in each Assignment and Assumption,the Eligible Assignee thereunder shall be a party to this Agreement and, to theextent of the interest assigned by such Assignment and Assumption, have therights and obligations of a Lender under this Agreement, and the assigningLender thereunder shall, to the extent of the interest assigned by suchAssignment and Assumption, be released from its obligations under thisAgreement (and, in the case of an Assignment and Assumption covering all of theassigning Lender’s rights and obligations under this Agreement, such Lendershall cease to be a party hereto but shall continue to be entitled to thebenefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05with respect to facts and circumstances occurring prior to the effective dateof such assignment).  Upon request, theBorrower (at its expense) shall execute and deliver a Note to the assigneeLender.  Any assignment or transfer by aLender of rights or obligations under this Agreement that does not comply withthis subsection shall be treated for purposes of this Agreement as a sale bysuch Lender of a participation in such rights and obligations in accordancewith subsection (d) of this Section.

 

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(c)           TheAdministrative Agent, acting solely for this purpose as an agent of theBorrower, shall maintain at the Administrative Agent’s Office a copy of eachAssignment and Assumption delivered to it and a register for the recordation ofthe names and addresses of the Lenders, and the Commitments of, and principalamounts of the Loans and L/C Obligations owing to, each Lender pursuant to theterms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, and the Borrower, the Administrative Agent and the Lenders maytreat each Person whose name is recorded in the Register pursuant to the termshereof as a Lender hereunder for all purposes of this Agreement, notwithstandingnotice to the contrary.  The Registershall be available for inspection by the Borrower and any Lender, at anyreasonable time and from time to time upon reasonable prior notice.

 

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

 

(e)           AParticipant shall not be entitled to receive any greater payment under Section3.01 or 3.04 than the applicable Lender would have been entitled toreceive with respect to the participation sold to such Participant, unless thesale of the participation to such Participant is made with the Borrower’s priorwritten consent.  A Participant thatwould be a Foreign Lender if it were a Lender shall not be entitled to thebenefits of Section 3.01 unless the Borrower is notified of theparticipation sold to such Participant and such Participant agrees, for thebenefit of the Borrower, to comply with Section 10.15 as though it werea Lender.

 

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

 

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

 

(g)           Asused herein, the following terms have the following meanings:

 

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

 

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

 

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

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## **10.08      Confidentiality.**Each of the Administrative Agent and the Lendersagrees 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 counseland other advisors (it being understood that the Persons to whom suchdisclosure is made will be informed of the confidential nature of suchInformation and instructed to keep such Information confidential); (b) to theextent requested by any regulatory authority; (c) to the extent required by applicablelaws or regulations or by any subpoena or similar legal process; (d) to anyother party to this Agreement; (e) in connection with the exercise of anyremedies hereunder or any suit, action or proceeding relating to this Agreementor the enforcement of rights hereunder; (f) subject to an agreementcontaining provisions substantially the same as those of this Section, to (i)any Eligible Assignee of or Participant in, or any prospective EligibleAssignee of or Participant in, any of its rights or obligations under thisAgreement or (ii) any direct or indirect contractual counterparty orprospective counterparty (or such contractual counterparty’s or prospectivecounterparty’s professional advisor) to any credit derivative transactionrelating to obligations of the Loan Parties; (g) with the consent of theBorrower; (h) to the extent such Information (i) becomes publicly availableother than as a result of a breach of this Section or (ii) becomesavailable to the Administrative Agent or any Lender on a nonconfidential basisfrom a source other than the Borrower; or (i) to the National Association ofInsurance Commissioners or any other similar organization.  In addition, the Administrative Agent andthe Lenders may disclose the existence of this Agreement and information aboutthis Agreement to market data collectors, similar service providers to thelending industry, and service providers to the Administrative Agent and theLenders in connection with the administration and management of this Agreement,the other Loan

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## **Documents, the Commitments, and the CreditExtensions.  For the purposes of thisSection, “Information” means all information received from any LoanParty relating to any Loan Party or its business, other than any suchinformation that is available to the Administrative Agent or any Lender on anonconfidential basis prior to disclosure by any Loan Party; providedthat, in the case of information received in writing from a Loan Party after thedate hereof, such information is clearly identified in writing at the time ofdelivery as confidential.  Any Personrequired to maintain the confidentiality of Information as provided in thisSection shall be considered to have complied with its obligation to do so ifsuch Person has exercised the same degree of care to maintain theconfidentiality of such Information as such Person would accord to its ownconfidential information. Notwithstanding anything herein to the contrary, “Information” shall notinclude, and the Administrative Agent and each Lender may disclose withoutlimitation of any kind, any information with respect to the “tax treatment” and“tax structure” (in each case, within the meaning of Treasury RegulationSection 1.6011-4) of the transactions contemplated hereby and all materials ofany kind (including opinions or other tax analyses) that are provided to theAdministrative Agent or such Lender relating to such tax treatment and taxstructure; provided that with respect to any document or similar item that ineither case contains information concerning the tax treatment or tax structureof the transaction as well as other information, this sentence shall only applyto such portions of the document or similar item that relate to the taxtreatment or tax structure of the Loans, Letters of Credit and transactionscontemplated hereby.**

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## **10.09      Set-off.**In addition to anyrights and remedies of the Lenders provided by law, upon the occurrence andduring the continuance of any Event of Default, each Lender is authorized atany time and from time to time, without prior notice to the Borrower or anyother Loan Party, any such notice being waived by the Borrower (on its ownbehalf and on behalf of each Loan Party) to the fullest extent permitted bylaw, to set off and apply any and all deposits (general or special, time ordemand, provisional or final) at any time held by, and other indebtedness atany time owing by, such Lender to or for the credit or the account of therespective Loan Parties against any and all Obligations owing to such Lenderhereunder or under any other Loan Document, now or hereafter existing,irrespective of whether or not the Administrative Agent or such Lender shallhave made demand under this Agreement or any other Loan Document and althoughsuch Obligations may be contingent or unmatured or denominated in a currencydifferent from that of the applicable deposit or indebtedness.  Each Lender agrees promptly to notify theBorrower and the Administrative Agent after any such set-off and applicationmade by such Lender; provided, however, that the failure to givesuch notice shall not affect the validity of such set-off and application.

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## **10.10      Interest Rate Limitation.**Agent, LC Issuer, Lenders, the Borrower and Guarantors intend tocontract in strict compliance with applicable usury law from time to time ineffect.  In furtherance thereof suchPersons stipulate and agree that none of the terms and provisions contained inthe Loan Documents shall ever be construed to create a contract to pay, for theuse, forbearance or detention of money, interest in excess of the maximumamount of interest permitted to be charged by applicable law from time to timein effect.  Neither the Borrower nor anyGuarantor nor any present or future guarantors, endorsers, or other Personshereafter becoming liable for payment of any Obligation shall ever be liablefor unearned interest thereon or shall ever be required to pay interest thereonin excess of the maximum amount that

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## **may be lawfully charged under applicable lawfrom time to time in effect, and the provisions of this section shall controlover all other provisions of the Loan Documents which may be in conflict orapparent conflict herewith.  Agent, LCIssuer and Lenders expressly disavow any intention to charge or collectexcessive unearned interest or finance charges in the event the maturity of anyObligation is accelerated.  If(a) the maturity of any Obligation is accelerated for any reason,(b) any Obligation is prepaid and as a result any amounts held toconstitute interest are determined to be in excess of the legal maximum, or(c) Agent, LC Issuer or any Lender or any other holder of any or all ofthe Obligations shall otherwise collect moneys which are determined toconstitute interest which would otherwise increase the interest on any or allof the Obligations to an amount in excess of that permitted to be charged byapplicable law then in effect, then all sums determined to constitute interestin excess of such legal limit shall, without penalty, be promptly applied toreduce the then outstanding principal of the related Obligations or, atAgent’s, LC Issuer’s or such Lender’s or holder’s option, promptly returned tothe Borrower or the other payor thereof upon such determination.  In determining whether or not the interestpaid or payable, under any specific circumstance, exceeds the maximum amountpermitted under applicable law, Agent, LC Issuer, Lenders and the RelatedPersons (and any other payors thereof) shall to the greatest extent permittedunder applicable law, (i) characterize any non-principal payment as anexpense, fee or premium rather than as interest, (ii) exclude voluntaryprepayments and the effects thereof, and (iii) amortize, prorate,allocate, and spread the total amount of interest throughout the entirecontemplated term of the instruments evidencing the Obligations in accordancewith the amounts outstanding from time to time thereunder and the maximum legalrate of interest from time to time in effect under applicable law in order tolawfully charge the maximum amount of interest permitted under applicablelaw.  In the event applicable lawprovides for an interest ceiling under Chapter 303 of the Texas Finance Code, asamended, for that day, the ceiling shall be the “weekly ceiling” as defined inthe Texas Finance Code, provided that if any applicable law permits greaterinterest, the law permitting the greatest interest shall apply and shall beused when appropriate in determining the Highest Lawful Rate.  As used in this section the term “applicablelaw” means the laws of the State of Texas or the laws of the United States ofAmerica, whichever laws allow the greater interest, as such laws now exist ormay be changed or amended or come into effect in the future.**

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## **10.11      Counterparts.**  This Agreement may be executed in one ormore counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument.  This Agreement may be duly executed byfacsimile or other electronic transmission.

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## **10.12      Integration. **This Agreement, together with the other LoanDocuments, comprises the complete and integrated agreement of the parties onthe subject matter hereof and thereof and supersedes all prior agreements,written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreementand those of any other Loan Document, the provisions of this Agreement shallcontrol; provided that the inclusion of supplemental rights or remediesin favor of the Administrative Agent or the Lenders in any other Loan Documentshall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the joint participation ofthe respective parties thereto and shall be construed neither against nor infavor of any party, but rather in accordance with the fair meaning thereof.

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## **10.13      Survival of Representations andWarranties.**Allrepresentations and warranties made hereunder and in any other Loan Document orother document delivered pursuant hereto or thereto or in connection herewithor therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties havebeen or will be relied upon by the Administrative Agent and each Lender,regardless of any investigation made by the Administrative Agent or any Lenderor on their behalf and notwithstanding that the Administrative Agent or anyLender may have had notice or knowledge of any Default at the time of anyCredit Extension, and shall continue in full force and effect as long as anyLoan or any other Obligation hereunder shall remain unpaid or unsatisfied orany Letter of Credit shall remain outstanding.

## ** **

## **10.14      Severability.**If any provision ofthis Agreement or the other Loan Documents is held to be illegal, invalid orunenforceable, (a) the legality, validity and enforceability of the remainingprovisions of this Agreement and the other Loan Documents shall not be affectedor impaired thereby and (b) the parties shall endeavor in good faithnegotiations to replace the illegal, invalid or unenforceable provisions withvalid provisions the economic effect of which comes as close as possible tothat of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in aparticular jurisdiction shall not invalidate or render unenforceable suchprovision in any other jurisdiction.

## ** **

## **10.15      TaxForms.**(a)  (i) Each Lender that is not a “United States person” within the meaning ofSection 7701(a)(30) of the Code (a “Foreign Lender”) shall deliver tothe Administrative Agent, prior to receipt of any payment subject towithholding under the Code (or upon accepting an assignment of an interestherein), two duly signed completed copies of either IRS Form W-8BEN or anysuccessor thereto (relating to such Foreign Lender and entitling it to anexemption from, or reduction of, withholding tax on all payments to be made tosuch Foreign Lender by the Borrower pursuant to this Agreement) or IRS FormW-8ECI or any successor thereto (relating to all payments to be made to suchForeign Lender by the Borrower pursuant to this Agreement) or such otherevidence satisfactory to the Borrower and the Administrative Agent that suchForeign Lender is entitled to an exemption from, or reduction of, U.S.withholding tax, including any exemption pursuant to Section 881(c) of theCode.  Thereafter and from time to time,each such Foreign Lender shall (A) promptly submit to the Administrative Agentsuch additional duly completed and signed copies of one of such forms (or suchsuccessor forms as shall be adopted from time to time by the relevant UnitedStates taxing authorities) as may then be available under then current UnitedStates laws and regulations to avoid, or such evidence as is satisfactory tothe Borrower and the Administrative Agent of any available exemption from orreduction of, United States withholding taxes in respect of all payments to bemade to such Foreign Lender by the Borrower pursuant to this Agreement, (B)promptly notify the Administrative Agent of any change in circumstances whichwould modify or render invalid any claimed exemption or reduction, and (C) takesuch steps as shall not be materially disadvantageous to it, in the reasonablejudgment of such Lender, and as may be reasonably necessary (including there-designation of its Lending Office) to avoid any requirement of applicableLaws that the Borrower make any deduction or withholding for taxes from amountspayable to such Foreign Lender.

 

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(ii)           EachForeign Lender, to the extent it does not act or ceases to act for its ownaccount with respect to any portion of any sums paid or payable to such Lenderunder any of the Loan Documents (for example, in the case of a typicalparticipation by such Lender), shall deliver to the Administrative Agent on thedate when such Foreign Lender ceases to act for its own account with respect toany portion of any such sums paid or payable, and at such other times as may benecessary in the determination of the Administrative Agent (in the reasonableexercise of its discretion), (A) two duly signed completed copies of the formsor statements required to be provided by such Lender as set forth above, toestablish the portion of any such sums paid or payable with respect to whichsuch Lender acts for its own account that is not subject to U.S. withholdingtax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successorthereto), together with any information such Lender chooses to transmit withsuch form, and any other certificate or statement of exemption required underthe Code, to establish that such Lender is not acting for its own account withrespect to a portion of any such sums payable to such Lender.

 

(iii)          TheBorrower shall not be required to pay any additional amount to any ForeignLender under Section 3.01 (A) with respect to any Taxes required to bededucted or withheld on the basis of the information, certificates orstatements of exemption such Lender transmits with an IRS Form W-8IMY pursuantto this Section 10.15(a) or (B) if such Lender shall have failed tosatisfy the foregoing provisions of this Section 10.15(a); providedthat if such Lender shall have satisfied the requirement of this Section10.15(a) on the date such Lender became a Lender or ceased to act for itsown account with respect to any payment under any of the Loan Documents,nothing in this Section 10.15(a) shall relieve the Borrower of itsobligation to pay any amounts pursuant to Section 3.01 in the eventthat, as a result of any change in any applicable law, treaty or governmentalrule, regulation or order, or any change in the interpretation, administrationor application thereof, such Lender is no longer properly entitled to deliverforms, certificates or other evidence at a subsequent date establishing thefact that such Lender or other Person for the account of which such Lenderreceives any sums payable under any of the Loan Documents is not subject towithholding or is subject to withholding at a reduced rate.

 

(iv)          TheAdministrative Agent may, without reduction, withhold any Taxes required to bededucted and withheld from any payment under any of the Loan Documents with respectto which the Borrower is not required to pay additional amounts under this Section10.15(a).

 

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

 

(c)           Ifany Governmental Authority asserts that the Administrative Agent did notproperly withhold or backup withhold, as the case may be, any tax or otheramount from payments made to or for the account of any Lender, such Lendershall indemnify the Administrative Agent therefor, including all penalties andinterest, any taxes imposed by any jurisdiction on the amounts payable to theAdministrative Agent under this Section, and costs

 

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

## ** **

## **10.16      Replacement of Lenders; Replacement ofRating Agency. **Under any circumstances set forth herein providingthat the Borrower shall have the right to replace a Lender as a party to thisAgreement, the Borrower may, upon notice to such Lender and the AdministrativeAgent, replace such Lender by causing such Lender to assign its Commitment(with the assignment fee to be paid by the Borrower in such instance) pursuantto Section 10.07(b) to one or more other Lenders or Eligible Assigneesprocured by the Borrower; provided, however, that if the Borrowerelects to exercise such right with respect to any Lender pursuant to Section3.06(b), it shall be obligated to replace all Lenders that have made similarrequests for compensation pursuant to Section 3.01 or 3.04.  The Borrower shall (x) pay in full allprincipal, interest, fees and other amounts owing to such Lender through thedate of replacement (including any amounts payable pursuant to Section 3.05),(y) provide appropriate assurances and indemnities (which may include lettersof credit) to the L/C Issuer as it may reasonably require with respect to anycontinuing obligation to fund participation interests in any L/C Obligationsthen outstanding, and (z) release such Lender from its obligations under theLoan Documents.  Any Lender beingreplaced shall execute and deliver an Assignment and Assumption with respect tosuch Lender’s Commitment and outstanding Loans and participations in L/CObligations.

 

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

 

## **10.17      Governing Law.**

 

(a)           THISAGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OFTHE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELYWITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACHLENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANYLEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN DALLASOR OF THE UNITED STATES FOR THE NORTHERNDISTRICT OF SUCH STATE, AND BY EXECUTION AND

 

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DELIVERY OF THIS AGREEMENT, THE BORROWER, THEADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITSPROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE BORROWER, THE ADMINISTRATIVE AGENT ANDEACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THELAYING OF VENUE OR BASED ON THE GROUNDS OF *FORUMNON CONVENIENS*, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGINGOF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOANDOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONALSERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANYOTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

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

## ** **

## **10.18      Waiverof Right to Trial by Jury.** EACH PARTY TO THIS AGREEMENTHEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTIONOR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITHOR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEMWITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACHCASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACTOR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCHCLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIALWITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINALCOUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THECONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BYJURY.

## ** **

## **10.19      ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOANDOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES.  THERE ARE NOUNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.**

## ** **

## **10.20      Restatement.ThisAgreement restates and amends the Existing Credit Agreement in its entirety,and all of the terms and  provisionshereof shall supersede the terms and provisions thereof.**

** **

[The remainder of this page is intentionally leftblank.]

 

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*IN WITNESS WHEREOF**,* the partieshereto have caused this Agreement to be duly executed as of the date firstabove written.

 
|   | **WESTERN  GAS RESOURCES, INC.** |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By:                              | /s/ William J. Krysiak |   |
|   |                             | William J. Krysiak |
|   |                             | Executive Vice President  and Chief  Financial Officer |

 

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|   | **BANK OF  AMERICA, N.A.,** |
|--------|-----------------------------|
|   | as Administrative Agent     |
|   |                        |
|   |                        |
|   | By:                         | /s/ Richard L. Stein |   |
|   | Name:                       | Richard L. Stein |   |
|   | Title:                      | Principal |   |
|        |                             |  |  |  |  |

 

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|   | **BANK OF  AMERICA, N.A.,** |                 |
|--------|-----------------------------|----------------------|
|   | as a Lender and L/C Issuer  |                 |
|   |                        |                 |   |
|   |                        |                 |   |
|   | By:                         | /s/ Richard L. Stein |   |
|   | Name:                       | Richard L. Stein     |   |
|   | Title:                      | Principal            |   |
|        |                             |                      |  |  |  |  |

 

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|   | **BANK OF  OKLAHOMA, N.A.,**  as a  Lender |
|--------|-------------------------------------------------|
|   |                                            |
|   |                                            |   |   |
|   | By:                                             | /s/ Thomas M. Foncannon |   |
|   | Name:                                           | Thomas M. Foncannon |   |
|   | Title:                                          | Senior Vice President |   |
|        |                                                 |  |  |  |  |

 

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|   | **BANK ONE,  NA,** as a Lender |               |
|--------|--------------------------------|--------------------|
|   |                           |               |
|   |                           |               |   |
|   | By:                            | /s/ Tom K. Martin  |   |
|   | Name:                          | Tom K. Martin      |   |
|   | Title:                         | Associate Director |   |
|        |                                |                    |  |  |  |

 

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|   | **BNP  PARIBAS,** as a Lender |            |
|--------|-------------------------------|-----------------|
|   |                          |            |   |
|   |                          |            |   |
|   | By:                           | /s/ J. Onischuk |   |
|   | Name:                         | J. Onischuk     |   |
|   | Title:                        | Director        |   |
|        |                               |                 |  |  |

 
|   |   |                     |   |
|--------|--------|--------------------------|--------|
|   | By:    |   /s/ Greg Smothers |   |
|   | Name:  |   Greg Smothers     |   |
|   | Title: |   Vice President    |   |
|        |        |                          |        |  |

 

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|   | **COMERICA  BANK - TEXAS,** as a Lender |
|--------|-----------------------------------------|
|   |                                    |
|   |                                    |   |   |
|   | By:                                     | /s/ Thomas G. Rajan |   |
|   | Name:                                   | Thomas G. Rajan |   |
|   | Title:                                  | Vice President |   |
|        |                                         |  |  |  |

 

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|   | **FLEET  NATIONAL BANK,** as a Lender |
|--------|---------------------------------------|
|   |                                  |
|   |                                  |   |   |
|   | By:                                   | /s/ Christopher Holmgren |   |
|   | Name:                                 | Christopher Holmgren |   |
|   | Title:                                | Managing Director |   |
|        |                                       |  |  |  |

 

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|   | **THE ROYAL  BANK OF SCOTLAND plc,**as a Lender |
|--------|-------------------------------------------------|
|   |                                            |
|   |                                            |   |   |
|   | By:                                             | /s/ Matthew J. Main |   |
|   | Name:                                           | Matthew J. Main |   |
|   | Title:                                          | Senior Vice President |   |
|        |                                                 |  |  |  |

 

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|   | **UNION  BANK OF CALIFORNIA, N.A.,**as a Lender |
|--------|-------------------------------------------------|
|   |                                            |
|   |                                            |   |   |
|   | By:                                             | /s/ Kimberly Coil |   |
|   | Name:                                           | Kimberly Coil |   |
|   | Title:                                          | Banking Officer |   |
|        |                                                 |  |  |  |

 
|   | By:    | /s/ Ali Ahmed  |   |
|--------|--------|----------------|--------|
|   | Name:  | Ali Ahmed      |   |
|   | Title: | Vice President |   |
|        |        |                |        |  |

 

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|   | **U.S. BANK  NATIONAL ASSOCIATION,**as a Lender |
|--------|-------------------------------------------------|
|   |                                            |
|   |                                            |   |   |
|   | By:                                             | /s/ Kathryn A. Gaiter |   |
|   | Name:                                           | Kathryn A. Gaiter |   |
|   | Title:                                          | Vice President |   |
|        |                                                 |  |  |  |

 

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|   | **WACHOVIA  BANK, NATIONAL  ASSOCIATION,** as a Lender |
|--------|--------------------------------------------------------|
|   |                                                   |
|   |                                                   |   |   |
|   | By:                                                    | /s/ Philip Trinder |   |
|   | Name:                                                  | Philip Trinder |   |
|   | Title:                                                 | Vice President |   |
|        |                                                        |  |  |  |

 

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|   | **WELLS  FARGO BANK, N.A.,** as a Lender |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |   |   |
|   | By:                                      | /s/ Todd Stornetta |   |
|   | Name:                                    | Todd Stornetta |   |
|   | Title:                                   | Vice President |   |
|        |                                          |  |  |  |

 

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