Exhibit 10.3


 


[Execution]


 


INTERCREDITOR AGREEMENT


 


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


 


W I T N E S S E T H:


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


INTERCREDITOR AGREEMENT


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


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


 


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


 


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


 


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


 


7

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


8

















 


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


 


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


 


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


 


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


 


“Swap
Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.


 


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


 


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


 


9

















 


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


 


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


 


10

















 


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


 


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


 


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


 


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


 


11

















 


7.             Collateral
Agent Appointment, Powers, and Immunities.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


12

















 


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


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


14

















 


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


 


9.             Provisions
Concerning Collateral Agent.


 


(a)           Duties
as Collateral Agent. 
Notwithstanding any provision to the contrary contained elsewhere herein
or in any other Finance Document, the Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Collateral Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Finance Document or otherwise exist against the
Collateral Agent.  Without limiting the
generality of the foregoing sentence, the use of the term Aagent@
herein with reference to the Collateral Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. 
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.  The
Lenders irrevocably authorize the Collateral Agent, at its option and in its
discretion, to release any lien on or security interest in any Collateral (i)
if the property subject to such lien or security interest is permitted to be
sold or otherwise transferred pursuant to both the Bank Agreement and the
Prudential Agreement or such lien is otherwise permitted to be released
pursuant to such Credit Agreements and (ii) upon termination of and payment in
full of all Obligations (other than contingent indemnification obligations,
including but not limited to obligations of the Debtor Parties under the Swap
Agreements that are not yet due).


 


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


 


(c)           Liability
of Collateral Agent.  No Collateral
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any Security
Document or the transactions contemplated hereby and thereby including but not limited to those arising from its
own negligence  (except for its own
gross negligence or willful misconduct in connection with its duties expressly
set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
the Company, any of the Company’s Affiliates or any officer thereof, contained
herein or in any other Security Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Collateral Agent under or in connection with, this Agreement or any Security Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any Security Document, or for any failure of the Company or
any of its Affiliates to perform its obligations hereunder or thereunder.  No Collateral Agent-Related Person shall be
under any obligation to


 


15

















 


any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any Security Document, or to inspect the properties,
books or records of the Company or any of its Affiliates.


 


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


 


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


 


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


 


16

















 


Agent that it has, independently and without reliance upon any
Collateral Agent-Related Person and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and creditworthiness
of the Company and its Affiliates, and all applicable bank or other regulatory
laws relating to the transactions contemplated hereby, and made its own
decision to enter into the Finance Documents and this Agreement and to extend
credit to the Company under its Credit Agreement.  Each Lender also represents that it will, independently and
without reliance upon any Collateral Agent-Related Person and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Finance Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company.  Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Collateral Agent herein (or required to be furnished to the
Banks by the Agent, in its capacity as “Administrative Agent” under the Bank
Agreement), the Collateral Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of any of the Company or its Affiliates which may come into
the possession of any Collateral Agent-Related Person.


 


(g)           Indemnification
of Collateral Agent.  The Lenders
shall indemnify upon demand each Collateral Agent-Related Person (to the extent
not reimbursed by or on behalf of the Company or any of its Affiliates and
without limiting the obligation of the Company or any of its Affiliates to do
so), to the extent of each Lender’s Proportionate Share, and hold harmless each
Collateral Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it, including but not
limited to those arising from its own negligence;  provided,
however, that no Lender shall be liable for the payment to any
Collateral Agent-Related Person of any portion of such Indemnified Liabilities
to the extent determined in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Collateral Agent-Related
Person’s own gross negligence or willful misconduct; provided, however,
that no action taken in accordance with the directions of the Majority Lenders
shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section.  Without
limitation of the foregoing, each Lender shall reimburse the Collateral Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including reasonable attorney’s fees and expenses) incurred by the Collateral
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any Security Document to the extent that
the Collateral Agent is not reimbursed for such expenses by or on behalf of the
Company.  The undertaking in this
Section shall survive termination of the Indebtedness.  Notwithstanding
anything herein to the contrary, the parties hereto agree that the obligations
of each holder of a Prudential Note to Collateral Agent under this Section 9(g)
shall be limited to the amount of the proceeds of the Collateral it receives
hereunder, under the Security Documents or from any other source that is
attributable to the Collateral.


 


17

















 


(h)           Collateral
Agent in its Individual Capacity. 
Bank of America, N.A. (“Bank of America”) and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Affiliates as though Bank of America were not the Collateral Agent hereunder
and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, Bank
of America or its Affiliates may receive information regarding the Company or
its Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Affiliate) and acknowledge that the
Collateral Agent shall be under no obligation to provide such information to
them.  With respect to the Collateral,
Bank of America shall have the same rights and powers under this Agreement and
the Security Documents as any other Lender and may exercise such rights and
powers as though it were not the Collateral Agent, and the terms ALender@
and ALenders@
include Bank of America in its individual capacity.


 


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


 


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


 


18

















 


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


 


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


 


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


 


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


 


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


 


19

















 


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


 


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


 


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


 


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


 


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


 


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


 


20

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


21

















 


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


 


 


	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Stein

  	
   

  
	
   

  	
   

  	
  Name: Richard L. Stein

  
	
   

  	
   

  	
  Title: Principal

  



 


22

















 


	
   

  	
  BANK OF OKLAHOMA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Foncannon

  	
   

  
	
   

  	
   

  	
  Name: Thomas M. Foncannon

  
	
   

  	
   

  	
  Title: Senior Vice President

  



 


23

















 


	
   

  	
  BANK ONE, NA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom K. Martin

  	
   

  
	
   

  	
   

  	
  Name: Tom K.
  Martin

  
	
   

  	
   

  	
  Title:
  Associate Director

  



 


24

















 


	
   

  	
  BNP PARIBAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Ornischuk

  	
   

  
	
   

  	
   

  	
  Name: J.
  Ornischuk

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greg Smothers

  	
   

  
	
   

  	
   

  	
  Name: Greg
  Smothers

  
	
   

  	
   

  	
  Title: Vice
  President

  
					



 


25

















 


	
   

  	
  COMERICA BANK - TEXAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas G. Rajan

  	
   

  
	
   

  	
   

  	
  Name: Thomas
  G. Rajan

  
	
   

  	
   

  	
  Title: Vice
  President

  



 


26

















 


	
   

  	
  FLEET NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Holmgren

  	
   

  
	
   

  	
   

  	
  Name:
  Christopher Holmgren

  
	
   

  	
   

  	
  Title:
  Managing Director

  



 


27

















 


	
   

  	
  THE ROYAL BANK OF SCOTLAND plc

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew J. Main

  	
   

  
	
   

  	
   

  	
  Name:
  Matthew J. Main

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  



 


28

















 


	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly Coil

  	
   

  
	
   

  	
   

  	
  Name:
  Kimberley Coil

  
	
   

  	
   

  	
  Title:
  Banking Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ali Ahmed

  	
   

  
	
   

  	
   

  	
  Name: Ali
  Ahmed

  
	
   

  	
   

  	
  Title: Vice
  President

  
					



 


29

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathryn A. Gaiter

  	
   

  
	
   

  	
   

  	
  Name:
  Kathryn A. Gaiter

  
	
   

  	
   

  	
  Title: Vice
  President

  



 


30

















 


	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Trinder

  	
   

  
	
   

  	
   

  	
  Name: Philip
  Trinder

  
	
   

  	
   

  	
  Title: Vice
  President

  



 


31

















 


	
   

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd Stornetta

  	
   

  
	
   

  	
   

  	
  Name: Todd
  Stornetta

  
	
   

  	
   

  	
  Title: Vice
  President

  



 


32

















 


	
   

  	
  THE PRUDENTIAL INSURANCE COMPANY

  OF AMERICA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ric E. Abel

  	
   

  
	
   

  	
   

  	
  Ric E. Abel

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRUCO LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ric E. Abel

  	
   

  
	
   

  	
   

  	
  Ric E. Abel

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRUDENTIAL INVESTMENT

  MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ric E. Abel

  	
   

  
	
   

  	
   

  	
  Ric E. Abel

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ING LIFE INSURANCE & ANNUITY

  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Prudential Private Placement Investors, L.P.

  (as Investment Advisor)

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Prudential
  Private Placement Investors,

  Inc., General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Ric E. Abel

  	
   

  
	
   

  	
   

  	
   

  	
  Ric E. Abel

  
	
   

  	
   

  	
   

  	
  Vice
  President

  
						



 


33

















 


CONSENT AND AGREEMENT


 


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


 


 


	
   

  	
  WESTERN GAS RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIGC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MGTC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WESTERN GAS RESOURCES-TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
							



 


34

















 


	
   

  	
  MOUNTAIN GAS RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LANCE OIL & GAS COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WESTERN GAS WYOMING, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WESTERN GAS RESOURCES, INC., its

  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
   

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
					



 


35

















 


Annex 1


 


ADDRESSES FOR NOTICE


 


	
  Bank of America,
  N.A.

  
	
  901 Main Street

  
	
  Dallas, TX  75201

  
	
  Attn: 

  	
  Ramon Presas

  
	
  Tel: 

  	
  214.209.2642

  
	
  Fax: 

  	
  214.290.8364

  
	
   

  	
   

  
	
  with a copy to:

  
	
  Bank of America,
  N.A.

  
	
  700 Louisiana, 8th Floor

  
	
  TX4-213-08-14

  
	
  Houston, TX  77002

  
	
  Attn:

  	
  Richard Stein

  
	
  Tel:

  	
  713.247.7258

  
	
  Fax:

  	
  713.247.7286

  
	
   

  	
   

  
	
  Bank of Oklahoma,
  N.A.

  
	
  1625 Broadway, Suite 1570

  
	
  Denver, CO  80202

  
	
  Attn:

  	
  Thomas M. Foncannon

  
	
  Tel:

  	
  303.534.9461

  
	
  Fax:

  	
  303.534.9499

  
	
   

  	
   

  
	
  with a copy to:

  
	
  Bank of Oklahoma,
  N.A.

  
	
  1625 Broadway, Suite 1570

  
	
  Denver, CO  80202

  
	
  Attn:

  	
  Mary Anne Anderson

  
	
  Tel:

  	
  303.534.9465

  
	
  Fax:

  	
  303.534.9499

  
	
   

  	
   

  
	
  Bank One, NA

  
	
  1 Bank One Plaza

  
	
  IL21-0634

  
	
  Chicago, IL  60670

  
	
  Attn:

  	
  Brenda De Los Reyes

  
	
  Tel:

  	
  312.732.2594

  
	
  Fax:

  	
  312.732.4840

  



 

















 


	
  with a copy to:

  
	
  Bank One, NA

  
	
  1717 Main Street, 4th Floor

  
	
  Dallas, TX  75201

  
	
  Attn:

  	
  Thomas K. Martin

  
	
  Tel:

  	
  214.290.2301

  
	
  Fax:

  	
  214.290.2332

  
	
   

  	
   

  
	
  BNP Paribas

  
	
  1220 Smith Street, Suite 3100

  
	
  Houston, TX  77002

  
	
  Attn:

  	
  Joe Onischuk

  
	
  Tel:

  	
  713.982.1161

  
	
  Fax:

  	
  713.659.6915

  
	
   

  	
   

  
	
  Comerica Bank -
  Texas

  
	
  1601 Elm Street

  
	
  2nd Floor, MC 6593

  
	
  Dallas, TX  75201

  
	
  Attn:

  	
  Thomas G. Rajan

  
	
  Tel:

  	
  214.969.6565

  
	
  Fax:

  	
  214.969.6561

  
	
   

  	
   

  
	
  Fleet National Bank

  
	
  Mail Stop:  MA DE 10008A

  
	
  100 Federal Street

  
	
  Boston, MA  02110

  
	
  Attn:

  	
  David Lundberg

  
	
  Tel:

  	
  617.434.8516

  
	
  Fax:

  	
  617.434.3652

  
	
   

  	
   

  
	
  The Royal Bank of
  Scotland plc

  
	
  600 Travis Street, Suite 6070

  
	
  Houston, TX  77002

  
	
  Attn:

  	
  Keith Johnson

  
	
  Tel:

  	
  713.221.2437

  
	
  Fax:

  	
  713.221.2430

  
	
   

  	
   

  
	
  Union Bank of
  California, Inc.

  
	
  500 N. Akard, Suite 4200

  
	
  Dallas, TX  75201

  
	
  Attn:

  	
  Kimberly Coil

  
	
  Tel:

  	
  214.922.4200

  
	
  Fax:

  	
  214.922.4209

  



 


2

















 


	
  with a copy to:

  
	
  Union Bank of
  California, Inc.

  
	
  601 Potrero Grande Dr., 1st Floor

  
	
  Monterey Park, CA  91754

  
	
  Attn:

  	
  An Cheng

  
	
  Tel:

  	
  323.720.7837

  
	
  Fax:

  	
  323.278.6173

  
	
   

  
	
  U.S. Bank National
  Association

  
	
  918 17TH Street, DNCOBB3E

  
	
  Denver, CO  80202

  
	
  Attn:

  	
  Kathryn A. Gaiter

  
	
  Tel:

  	
  303.585.4210

  
	
  Fax:

  	
  303.585.4362

  
	
   

  
	
  Wachovia Bank,
  National Association

  
	
  1001 Fannin Street, Suite 255

  
	
  Houston, TX  77002

  
	
  Attn:

  	
  Philip Trinder

  
	
  Tel:

  	
  713.346.2718

  
	
  Fax:

  	
  713.650.6354

  
	
   

  
	
  Wells Fargo Bank,
  N.A.

  
	
  1740 Broadway

  
	
  Denver, CO  80274

  
	
  Attn:

  	
  Todd Stornetta

  
	
  Tel:

  	
  303.863.5653

  
	
  Fax:

  	
  303.863.5196

  
	
   

  
	
  The Prudential
  Insurance Company of America

  
	
  Pruco Life
  Insurance Company

  
	
  Prudential
  Investment Management, Inc.

  
	
  2200 Ross Avenue, Suite 4200E

  
	
  Dallas, TX  75201

  
	
  Attn:

  	
  Ric Abel

  
	
  Tel:

  	
  214.720.6202

  
	
  Fax:

  	
  214.720.6299

  
	
   

  
	
  ING Life Insurance
  & Annuity Company

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

  
	
  4 Gateway Center, 100 Mulberry Street

  
	
  Newark, NJ 07102

  
	
  Attn:

  	
  Albert Trank

  
	
  Tel:

  	
  973.802.8608

  
	
  Fax:

  	
  973.624.6432

  
				



 


3

















 


	
  Prudential
  Investment Management, Inc.

  
	
  c/o Prudential Capital Group

  
	
  2200 Ross Avenue, Suite 4200E

  
	
  Dallas, TX 75201

  
	
  Attn:

  	
  Ric Abel

  
	
  Tel:

  	
  214.720.6202

  
	
  Fax:

  	
  214.720.6299

  



 


4

















 


EXHIBIT A


 


FORM OF MORTGAGE


 


5