Exhibit 10.4


 


[EXECUTION]


[MIGC
Pledge Agreement]


 


AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT


 


THIS SUBSIDIARY PLEDGE
AGREEMENT (this “Agreement”) is made as of June 29, 2004, by MIGC,
Inc., a Delaware corporation (herein called “Debtor”), in favor of Bank
of America, N.A., as Administrative Agent for the Lenders (herein called “Secured
Party”).


 


RECITALS:


 


1.                                       Western Gas Resources, Inc., a Delaware
corporation (“Parent”) and Bank of America, N.A., as Administrative Agent, and
certain financial institutions (collectively, the “Lenders”) are parties
to that certain Amended and Restated Credit Agreement of even date herewith (as
from time to time amended, supplemented, or restated, the “Credit Agreement”)
pursuant to which Parent has executed in favor of each Lender 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 “Notes”).


 


2.                                       Parent has executed those certain senior
notes pursuant to that certain Third Amended and Restated Master Shelf
Agreement among Parent, The Prudential Insurance Company of America (“PICA”),
Prudential Investment Management, Inc. (“PIMI”), Pruco Life Insurance Company
(“Pruco”) and certain Prudential Affiliates, as therein defined (PICA, PIMI,
Pruco and such Prudential Affiliates collectively herein called “Prudential”)
dated as of December 19, 1991 (effective January 13, 2003), as from
time to time supplemented or amended.


 


3.                                       Parent and one or more of the Lenders may,
from time to time, enter into interest rate swap agreements with respect to
various obligations of Parent (such agreements, as from time to time amended,
are collectively referred to herein as the “Swap Agreements”).


 


4.                                       It is a condition precedent to Lenders’
obligation to advance funds to Parent pursuant to the Credit Agreement that
Debtor shall execute and deliver this Agreement to Secured Party.


 


5.                                       Parent owns all of the issued and outstanding
stock of Debtor and the board of directors of Debtor has determined that
Debtor’s execution, delivery and performance of this Agreement may reasonably
be expected to benefit Debtor, directly or indirectly, and are in the best
interests of Debtor.


 

















 


NOW, THEREFORE, in
consideration of the premises, of the benefits which will inure to Debtor and
the Parent from Lenders’ extensions of credit under the Credit Agreement, and
of Ten Dollars and other good and valuable consideration, the receipt and
sufficiency of all of which are hereby acknowledged, and in order to induce
Lenders to continue to extend credit under the Credit Agreement, Debtor hereby
agrees with Secured Party, for the benefit of each Lender, as follows:


 


AGREEMENTS:


 


ARTICLE I
— Definitions and References


 


Section 1.1.                                   General Definitions.  As
used herein, the terms “Credit Agreement”, “Debtor”, “Parent”, “Secured Party”,
“Lenders”, “Notes”, “Prudential” and “Swap Agreements” shall have the meanings
indicated above, and the following terms shall have the following meanings:


 


“Collateral” means
all property, of whatever type, which is described in Section 2.1 as being
at any time subject to a security interest granted hereunder to Secured Party.


 


“Commitment” means
the agreement or commitment by Lenders to make loans or otherwise extend credit
to Parent under the Credit Agreement, and any other agreement, commitment,
statement of terms or other document contemplating the making of loans or
advances or other extension of credit by Lenders to or for the account of
Parent which is now or at any time hereafter intended to be secured by the
Collateral under this Agreement.


 


“Event of Default”
means the occurrence of any “Event of Default” as such term is defined in the
Credit Agreement.


 


“Enforcement Action”
means any exercise by Secured Party of any rights or remedies against any
Collateral, whether hereunder or otherwise, in order to foreclose upon,
collect, take possession of, sell, lease, dispose of, or otherwise realize upon
Collateral.


 


“Guaranty” means that
certain Guaranty of even date herewith executed by Debtor in favor of Secured
Party, for the benefit of Lenders, pursuant to which Debtor guarantees the
payment and performance of the indebtedness, liabilities and obligations of
Parent owing to Lenders under the Obligation Documents.


 


“Intercreditor Agreement”
means that certain Intercreditor Agreement of even date herewith among Lenders
and Prudential, as from time to time amended.


 


“Issuer” means any
issuer of Pledged Shares and any successor of such Issuer.


 


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“Obligation Documents”
means the Credit Agreement, the Notes, 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 Agreement 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.


 


“Other Liable Party”
means any Person, other than Debtor, who may now or may at any time hereafter
be primarily or secondarily liable for any of the Secured Obligations or who
may now or may at any time hereafter have granted to Secured Party a Lien upon
any property as security for the Secured Obligations.


 


“Pledged Shares” has
the meaning given it in Section 2.1(a).


 


“Related Person”
means Parent, each Subsidiary of Parent, and each Other Liable Party.


 


“Secured Obligations”
shall have the meaning given it in Section 2.2.


 


“UCC” means the
Uniform Commercial Code in effect in the State of Texas on the date hereof.


 


Section 1.2.                                   Incorporation of Other Definitions. 
Reference is hereby made to the Credit Agreement for a statement of the
terms thereof.  All capitalized terms
used in this Agreement which are defined in the Credit Agreement and not
otherwise defined herein shall have the same meanings herein as set forth
therein.  All terms used in this
Agreement which are defined in the UCC and not otherwise defined herein shall
have the same meanings herein as set forth therein, except where the context
otherwise requires.


 


Section 1.3.                                   Attachments.  All exhibits or schedules
which may be attached to this Agreement are a part hereof for all purposes.


 


Section 1.4.                                   Amendment of Defined Instruments. 
Unless the context otherwise requires or unless otherwise provided
herein, references in this Agreement to a particular agreement, instrument or
document (including, but not limited to, references in Section 2.1) also
refer to and include all renewals, extensions, amendments, modifications,
supplements or restatements of any such agreement, instrument or document,
provided that nothing contained in this Section shall be construed to
authorize any Person to execute or enter into any such renewal, extension,
amendment, modification, supplement or restatement.


 


Section 1.5.                                   References and Titles.  All
references in this Agreement to Exhibits, Articles, Sections, subsections, and
other subdivisions refer to the Exhibits, Articles, Sections, subsections and
other subdivisions of this Agreement unless expressly provided otherwise.  Titles appearing at the beginning of any
subdivision are for convenience only and do not


 


3

















 


constitute any part of any
such subdivision and shall be disregarded in construing the language contained
in this Agreement.  The words “this
Agreement”, “herein”, “hereof”, “hereby”, “hereunder” and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited.  The
phrases “this Section” and “this subsection” and similar phrases refer only to
the Sections or subsections hereof in which the phrase occurs.  The word “or” is not exclusive, and the word
“including” (in all of its forms) means “including without limitation”.  Pronouns in masculine, feminine and neuter
gender shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa unless
the context otherwise requires.


 


ARTICLE II
— Security Interest


 


Section 2.1.                                   Grant of Security Interest.  As
collateral security for all of the Secured Obligations, Debtor hereby pledges
and assigns to Secured Party and grants to Secured Party for the benefit of
each Lender a continuing security interest in and to all right, title and
interest of the following:


 


(a)                   Pledged Shares.  All
of the following, whether now or hereafter existing, which are owned by Debtor
or in which Debtor otherwise has any rights: the shares of stock of the
Subsidiaries of Debtor described in Exhibit A hereto and all certificates
representing such shares, all options and other rights, contractual or
otherwise, at any time existing with respect to such shares, and all dividends,
cash, instruments and other property now or hereafter received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares (any and all such shares, certificates, options, rights, dividends,
cash, instruments and other property being herein called the “Pledged Shares”).


 


(b)                  Proceeds.  All proceeds of any and all
of the foregoing Collateral.


 


In each case, the foregoing
shall be covered by this Agreement, whether Debtor’s ownership or other rights
therein are presently held or hereafter acquired and however Debtor’s interests
therein may arise or appear (whether by ownership, security interest, claim or
otherwise).


 


Section 2.2.                                   Secured Obligations.  The
security interest created hereby in the Collateral constitutes continuing
collateral security for all of the following obligations, indebtedness and
liabilities, whether now existing or hereafter incurred or arising:


 


(a)                   Credit Agreement Indebtedness.  The
payment by Parent, as and when due and payable, of all amounts from time to
time owing by Parent under or in respect of the Credit Agreement, each Note,
and any of the other Obligation Documents, and the due performance by Parent of
all of its other obligations under or in respect of the various Obligation
Documents.


 


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(b)                  Guaranty Indebtedness.  The
payment by Debtor, as and when due and payable, of all amounts from time to
time owing by Debtor under or in respect of the Guaranty or any of the other
Obligation Documents to which Debtor is a party, and the due performance by
Debtor of all of its other respective obligations under or in respect of the
Guaranty and such other Obligation Documents.


 


(c)                   Renewals.  All renewals, extensions, amendments,
modifications, supplements, or restatements of or substitutions for any of the
foregoing.


 


(d)                  Swap Obligations.  All
obligations of any Related Person to any Lender or any Affiliate of any Lender
under or pursuant to a Swap Agreement between any Related Person and such
Lender or any Affiliate of such Lender.


 


As used herein, the term
“Secured Obligations” refers to all present and future indebtedness,
obligations, and liabilities of whatever type which are described above in this
section, including any interest which accrues after the commencement of any
case, proceeding, or other action relating to the bankruptcy, insolvency, or
reorganization of the Debtor.  It is the
intention of the Debtor and Secured Party that this Agreement not constitute a
fraudulent transfer or fraudulent conveyance under any state or federal law
that may be applied hereto.  Debtor hereby agrees that its obligations hereunder shall be
limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of
the Bankruptcy Code (Title 11, United States Code) or any comparable provisions
of any applicable state law.


 


ARTICLE III
— Representations, Warranties and Covenants


 


Section 3.1.                                   Representations and Warranties. 
Debtor hereby represents and warrants to Secured Party and the Lenders
as follows:


 


(a)                   Ownership Free of Liens. 
Debtor has good and marketable title to the Collateral free and clear of
all Liens, encumbrances or adverse claims, except for the security interest
created by this Agreement and the security interest in favor of Prudential
pursuant to the Prudential Pledge Agreement. 
No dispute, right of setoff, counterclaim or defense exists with respect
to all or any part of the Collateral. 
No effective financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any recording office
except any which have been filed in favor of Secured Party relating to this
Agreement and any which have been filed in favor of Prudential relating to the
Prudential Pledge Agreement.


 


(b)                  No Conflicts or Consents. 
Neither the ownership or the intended use of the Collateral by Debtor,
nor the grant of the security interest by Debtor to Secured Party


 


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herein,
nor the exercise by Secured Party of its rights or remedies hereunder, will (i)
conflict with any provision of (a) the articles or certificate of incorporation
or bylaws of Debtor or any similar charter documents of any Issuer, or (b) any
agreement, judgment, license, order or permit applicable to or binding upon
Debtor or any Issuer, or (ii) result in or require the creation of any Lien,
charge or encumbrance upon any material assets or properties of Debtor or of
any Issuer or Related Person except as expressly contemplated in the Obligation
Documents.  Except as expressly
contemplated in the Obligation Documents (including, without limitation,
Section 6.13 of the Credit Agreement), no consent, approval, authorization
or order of, and no notice to or filing with, any court, governmental
authority, Issuer or third party is required in connection with the grant by
Debtor of the security interest herein, or the exercise by Secured Party of its
rights and remedies hereunder.


 


(c)                   Security Interest. 
Debtor has and will have at all times full right, power and authority to
grant a security interest in the Collateral to Secured Party as provided
herein, free and clear of any Lien, adverse claim, or encumbrance except for
the Liens in favor of Prudential pursuant to the Prudential Pledge Agreement or
restrictions imposed by a regulatory authority.


 


(d)                  Perfection.  The taking possession by
Secured Party of all certificates, instruments and cash constituting Collateral
from time to time and the filing of financing statements with the Secretary of
State (or equivalent governmental official) of the State in which Debtor is
organized will perfect, and establish the first priority of (subject only to
any Liens in favor of Prudential in accordance with and subject to the terms of
the Intercreditor Agreement), Secured Party’s security interest hereunder in
the Collateral securing the Secured Obligations.  No further or subsequent filing, recording, registration, other
public notice or other action is necessary or desirable to perfect or otherwise
continue, preserve or protect such security interest except (i) for
continuation statements described in UCC Section 9.515(d), (ii) for
filings required to be filed in the event of a change in the name, identity, or
corporate structure of Debtor, or (iii) in the event any financing statement
filed by Secured Party relating hereto otherwise becomes inaccurate or
incomplete.


 


(e)                   Location of Debtor and Records. 
Debtor’s chief executive office and principal place of business and the
office where the records concerning the Collateral are kept is located at 1099
18th Street, Suite 1200, Denver, Colorado 80202.


 


(f)                     Pledged Shares. 
Debtor has delivered to Secured Party all certificates evidencing
Pledged Shares.  All such certificates
are valid and genuine and have not been altered.  All shares and other securities constituting the Pledged Shares
have been duly authorized and validly issued, are fully paid and
non-assessable, and were not issued in violation of the preemptive rights of
any Person or of any agreement by which Debtor or the Issuer thereof is
bound.  All documentary, stamp or other
taxes or fees owing in


 


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connection
with the issuance, transfer or pledge of Pledged Shares (or rights in respect
thereof) have been paid.  No
restrictions or conditions exist with respect to the transfer, voting or
capital of any Pledged Shares under the documentation governing such Pledged
Shares or LLC Rights.  The Pledged
Shares constitute one hundred percent (100%) of the shares of capital stock of
each Issuer.  No Issuer of any Pledged
Shares has any outstanding stock rights, rights to subscribe, options, warrants
or convertible securities outstanding or any other rights outstanding whereby
any Person would be entitled to have issued to him capital stock of such
Issuer.  The Pledged Shares do not
constitute “margin stock” as such term is defined in Regulation U promulgated
by the Board of Governors of the Federal Reserve System.


 


Section 3.2.                                   Affirmative Covenants. 
Unless Secured Party shall otherwise consent in writing after having
received the consent of the Required Lenders, Debtor will at all times comply
with the covenants contained in this Section 3.2 from the date hereof and
so long as any part of the Secured Obligations or the Commitment is
outstanding.


 


(a)                   Ownership and Liens. 
Debtor will maintain good and marketable title to all Collateral free
and clear of all Liens, encumbrances or adverse claims, except for the security
interest created by this Agreement and the security interest created by the
Prudential Pledge Agreement.  Debtor
will defend Secured Party’s right, title and special property and security
interest in and to the Collateral against the claims of any Person.


 


(b)                  Further Assurances. 
Debtor will, at its reasonable expense and at any time and from time to
time, promptly execute and deliver all further instruments and documents and
take all further action that may be reasonably necessary or that Secured Party
may reasonably request in order (i) to perfect and protect the security
interest created or purported to be created hereby and the priority of such
security interest as stated herein; (ii) to enable Secured Party to exercise
and enforce its rights and remedies hereunder in respect of the Collateral; or
(iii) to otherwise effect the purposes of this Agreement, including but not
limited to: (A) executing and filing such financing or continuation statements,
or amendments thereto, as may be reasonably necessary or desirable or that
Secured Party may request in order to perfect and preserve the security
interest created or purported to be created hereby; and (B) furnishing to
Secured Party from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail.


 


(c)                   Inspection and Information. 
Debtor will furnish to Secured Party and each Lender any information
which Secured Party may from time to time reasonably request on behalf of
itself or any Lender concerning the Collateral, any covenant, provision or
condition of this Agreement, or any matter in connection with Debtor’s businesses
and operations.  Debtor shall permit
representatives and independent contractors of the Secured Party to make such
visitations and inspections on the terms as provided in


 


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Section 6.10
of the Credit Agreement.  Secured party
and each Lender hereby agree that it will, at all times, abide by the terms of
Section 10.08 of the Credit Agreement regarding treatment of confidential
information.


 


(d)                  Delivery of Pledged Shares.  All
instruments, certificates and writings evidencing the Pledged Shares shall be
delivered to Secured Party on or prior to the execution and delivery of this
Agreement, together with a true and correct copy of the articles of
incorporation and bylaws of each Issuer and all amendments and supplements
thereto.  All other instruments,
certificates and writings hereafter evidencing or constituting Pledged Shares
and all amendments or supplements to the articles of incorporation or bylaws
(whether or not authorized hereunder) shall be delivered to Secured Party
promptly upon the receipt thereof by or on behalf of Debtor.  All such Pledged Shares shall be held by or
on behalf of Secured Party pursuant hereto and shall be delivered in suitable
form for transfer by delivery with any necessary endorsement or shall be
accompanied by fully executed instruments of transfer or assignment in blank,
all in form and substance reasonably satisfactory to Secured Party.


 


(e)                   Proceeds of Pledged Shares.  If
Debtor shall receive, by virtue of its being or having been an owner of any
Pledged Shares, any (i) certificate evidencing shares of stock (including any
certificate representing a stock dividend or distribution in connection with
any increase or reduction of capital, reorganization, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spinoff or
split-off), promissory note or other instrument or writing; (ii) option or
right, whether as an addition to, substitution for, or in exchange for, any
Pledged Shares, or otherwise; (iii) dividends payable in cash (except such
dividends permitted to be retained by Debtor pursuant to Section 4.8
hereof) or in securities or other property, or (iv) dividends or other
distributions in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in
surplus, if an Event of Default shall have occurred and be continuing, Debtor
shall receive the same in trust for the benefit of Secured Party, shall
segregate it from Debtor’s other property, and shall promptly deliver it to
Secured Party in the exact form received, with any necessary endorsement or
appropriate stock powers duly executed in blank, to be held by Secured Party as
Collateral.


 


(f)                     Status of Pledged Shares.  The
certificates evidencing the Pledged Shares shall at all times be valid and
genuine and shall not be altered.  The
Pledged Shares at all times shall be duly authorized, validly issued, fully
paid, and non-assessable, and shall not be issued in violation of the
pre-emptive rights of any Person or of any agreement by which Debtor or the
Issuer thereof is bound and shall not be subject to any restrictions with
respect to transfer, voting or capital of such Pledged Shares.


 


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(g)                  Notices from Issuer. 
Debtor will promptly deliver to Secured Party a copy of each notice or
other communication received by Debtor from any Issuer in respect of any
Pledged Shares.


 


Section 3.3.                                   Negative Covenants. 
Unless Secured Party shall otherwise consent in writing after having
received the consent of the Required Lenders, Debtor will at all times comply
with the covenants contained in the Credit Agreement and in this
Section 3.3 from the date hereof and so long as any part of the Secured
Obligations or the Commitment is outstanding.


 


(a)                   Transfer or Encumbrance. 
Except as expressly allowed under the Credit Agreement, without the
prior written consent of Required Lenders, Debtor will not sell, assign (by
operation of law or otherwise), transfer, exchange or otherwise dispose of any
of the Collateral, nor will Debtor grant a Lien upon or execute, file or record
any financing statement or other registration with respect to the Collateral,
nor will Debtor allow any such Lien, financing statement, or other registration
to exist or deliver actual or constructive possession of the Collateral to any
other Person, other than Liens, financing statements or other registrations in
favor of Secured Party and Prudential.


 


(b)                  Financing Statement Filings. 
Debtor recognizes that financing statements pertaining to the Collateral
have been or may be filed where Debtor has its chief executive office or chief
place of business.  Without limitation
of any other covenant herein, Debtor will not cause or permit any change to be
made in the location of its chief executive office or chief place of business,
unless Debtor shall have notified Secured Party of such change at least thirty
(30) days prior to the effective date of such change, and shall have first
taken all action reasonably required by Secured Party for the purpose of
further perfecting or protecting the security interest in favor of Secured
Party in the Collateral.  In any notice
furnished pursuant to this subsection, Debtor will expressly state that the
notice is required by this Agreement and contains facts that may require
additional filings of financing statements or other notices for the purposes of
continuing perfection of Secured Party’s security interest in the Collateral.


 


(c)                   Dilution of Shareholdings. 
Debtor will not permit the issuance of (i) any additional shares of any
class of capital stock of any Issuer (unless immediately upon issuance the same
are pledged and delivered to Secured Party pursuant to the terms hereof to the
extent necessary to give Secured Party a first priority security interest
unless prohibited by a regulatory authority having jurisdiction over an Issuer
(subject only to any security interest in favor of Prudential in accordance
with and subject to the terms of the Intercreditor Agreement) after such issue
in at least the same percentage of such Issuer’s outstanding shares as Debtor
had before such issue), (ii) any securities convertible voluntarily by the
holder thereof or automatically upon the occurrence or non-occurrence of any
event or condition into, or exchangeable for, any such shares of capital stock,
or (iii) any warrants, options, contracts or other commitments entitling any
Person to


 


9

















 


purchase
or otherwise acquire any such shares of capital stock not outstanding as of the
date of this Agreement.


 


(d)                  Restrictions on Pledged Shares. 
Debtor will not enter into any agreement creating, or otherwise permit
to exist, any restriction or condition upon the transfer, voting or control of
any Pledged Shares except under the Debt Securities.


 


ARTICLE IV
— Remedies, Powers and Authorizations


 


Section 4.1.                                   Provisions Concerning the Collateral.


 


(a)                   Additional Filings. 
Debtor hereby authorizes Secured Party to file, without the signature of
Debtor where permitted by law, one or more financing or continuation
statements, and amendments thereto, relating to the Collateral.  Debtor further agrees that a carbon,
photographic or other reproduction of this Agreement or of any financing
statement describing any Collateral is sufficient as a financing statement and
may be filed in any jurisdiction by Secured Party as it may deem appropriate.


 


(b)                  Power of Attorney. 
Debtor hereby irrevocably appoints Secured Party as Debtor’s
attorney-in-fact and proxy, with full authority in the place and stead of
Debtor and in the name of Debtor or otherwise, from time to time in Secured
Party’s discretion, upon the occurrence and during the continuance of an Event
of Default, to take any action, and to execute or indorse any instrument,
certificate or notice, which Secured Party may deem necessary or advisable to
accomplish the purposes of this Agreement including any action or instrument:
(i) to request or instruct each Issuer (and any registrar, transfer agent, or
similar Person acting on behalf of each Issuer) to register the pledge or
transfer of the Collateral to Secured Party; (ii) to otherwise give
notification to any Issuer (or any such registrar, transfer agent, financial
intermediary, or other Person) of Secured Party’s security interests hereunder;
(iii) to ask, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral; (iv) to receive, indorse and collect any drafts or
other instruments or documents; (v) to enforce any obligations included among
the Collateral; and (vi) to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce, perfect, or
establish the priority of the rights of Secured Party with respect to any of
the Collateral.  Debtor hereby
acknowledges that such power of attorney and proxy are coupled with an
interest, and are irrevocable.


 


(c)                   Performance by Secured Party.  If
Debtor fails to perform any agreement or obligation contained herein, Secured
Party may itself perform, or cause performance of, such agreement or
obligation, and the reasonable expenses of Secured Party incurred in connection
therewith shall be payable by Debtor under Section 4.5.


 


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Section 4.2.                                   Remedies.  If an Event of Default shall
have occurred and be continuing, Secured Party may, except as limited by any
regulatory approvals, requests or requirements, from time to time in its
discretion, without limitation and without notice except as expressly provided
below (in each case subject to the Intercreditor Agreement):


 


(a)                   exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein, under the other
Obligation Documents or otherwise available to it, all the rights and remedies
of a secured party on default under the UCC (whether or not the UCC applies to
the affected Collateral);


 


(b)                  require Debtor to, and Debtor hereby agrees
that it will at its expense and upon request of Secured Party, promptly
assemble all or part of the Collateral as directed by Secured Party and make it
(together with all books, records and information of Debtor relating thereto)
available to Secured Party at a place to be designated by Secured Party which
is reasonably convenient to both parties;


 


(c)                   reduce its claim to judgment or foreclose or
otherwise enforce, in whole or in part, the security interest created hereby by
any available judicial procedure;


 


(d)                  dispose of, at its office, on the premises of
Debtor or elsewhere, all or any part of the Collateral, as a unit or in
parcels, by public or private proceedings, and by way of one or more contracts
(it being agreed that the sale of any part of the Collateral shall not exhaust
Secured Party’s power of sale, but sales may be made from time to time, and at
any time, until all of the Collateral has been sold or until the Secured
Obligations have been paid and performed in full), and at any such sale it
shall not be necessary to exhibit any of the Collateral;


 


(e)                   buy (or allow one or more of the Lenders to
buy) the Collateral, or any part thereof, at any public sale;


 


(f)                     buy (or allow one or more of the Lenders to
buy) the Collateral, or any part thereof, at any private sale if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations;


 


(g)                  apply by appropriate judicial proceedings for
appointment of a receiver for the Collateral, or any part thereof, and Debtor
hereby consents to any such appointment;


 


(h)                  at its discretion, retain the Collateral in
satisfaction of the Secured Obligations whenever the circumstances are such
that Secured Party is entitled to do so under the UCC or otherwise (provided
that Secured Party shall in no circumstances be deemed to have retained the
Collateral in satisfaction of the Secured Obligations in the absence of an
express notice by Secured Party to Debtor that Secured Party has either done so
or intends to do so); and


 


11

















 


(i)                      take any other Enforcement Action.


 


Debtor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days’ notice
to Debtor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.  Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.  Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.


 


Section 4.3.                                   Application of Proceeds. Whenever Secured Party applies any cash
held by Secured Party as Collateral, or any cash proceeds received by Secured
Party 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
(subject to the rights of Lenders under the Credit Agreement and subject to the
terms of the Intercreditor Agreement):


 


(a)                   To the repayment of all costs and expenses,
including reasonable attorneys’ fees and legal expenses, incurred by Secured
Party in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Collateral, (iii) the exercise or enforcement of
any of the rights of Secured Party hereunder, or (iv) the failure of Debtor to
perform or observe any of the provisions hereof;


 


(b)                  To the payment or other satisfaction of any
Liens, encumbrances, or adverse claims upon or against any of the Collateral
(other than those arising pursuant to the Prudential Pledge Agreement);


 


(c)                   To the reimbursement of Secured Party for the
amount of any obligations of Debtor or any Other Liable Party paid or
discharged by Secured Party (other than amounts for principal and interest
under the Notes) pursuant to the provisions of this Agreement or the other
Obligation Documents, and of any expenses of Secured Party payable by Debtor hereunder
or under the other Obligation Documents;


 


(d)                  To the satisfaction of any other Secured
Obligations to each Lender and Prudential in accordance with its Proportionate
Share (as defined in the Intercreditor Agreement);


 


(e)                   By holding the same as Collateral;


 


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


 


12

















 


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


 


Each Lender hereby
authorizes the Secured Party to remit to Prudential any cash held as Collateral
or cash proceeds at any time due to Prudential pursuant to clause (d) above and
the terms of the Intercreditor Agreement.


 


Section 4.4.                                   Deficiency.  In the event that the
proceeds of any sale, collection or realization of or upon Collateral by
Secured Party are insufficient to pay all Secured Obligations and any other
amounts to which Secured Party and Lenders are legally entitled, Debtor shall
be liable for the deficiency, together with interest thereon as provided in the
governing Obligation Documents or (if no interest is so provided) at such other
rate as shall be fixed by applicable law, together with the costs of collection
and the reasonable fees of any attorneys employed by Secured Party to collect
such deficiency.


 


Section 4.5.                                   Indemnity and Expenses.  In
addition to, but not in qualification or limitation of, any similar obligations
under other Obligation Documents:


 


(a)                   Debtor will indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities growing out
of or resulting from this Agreement (including enforcement of this Agreement), WHETHER OR NOT SUCH CLAIMS, LOSSES AND LIABILITIES ARE
IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE IN OR PART, UNDER ANY CLAIM OR
THEORY OF STRICT LIABILITY, OR ARE CAUSED BY OR ARISE OUT OF SUCH INDEMNIFIED
PARTY’S OWN NEGLIGENCE, except to the extent such claims, losses or
liabilities are proximately caused by the indemnified party’s individual gross
negligence or willful misconduct.  As
used in this Section 4.5, the terms “Secured Party” and “Lender” shall
include each director, officer, agent, attorney, employee, representative and
Affiliate of such Person.


 


(b)                  Debtor will upon demand pay to Secured Party
the amount of any and all reasonable costs and expenses, including the
reasonable fees and disbursements of Secured Party’s counsel and of any experts
and agents, which Secured Party may incur in connection with (i) the
transactions which give rise to this Agreement, (ii) the preparation of this
Agreement and the perfection and preservation of this security interest created
under this Agreement, (iii) the administration of this Agreement; (iv) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any Collateral; (v) the exercise or enforcement of any
of the rights of Secured Party hereunder; or (vi) the failure by Debtor to perform
or observe any of the provisions hereof, except expenses resulting from Secured
Party’s gross negligence or willful misconduct.


 


13

















 


Section 4.6.                                   Non-Judicial Remedies.  In
granting to Secured Party the power to enforce its rights hereunder without
prior judicial process or judicial hearing, Debtor expressly waives, renounces
and knowingly relinquishes any legal right which might otherwise require
Secured Party to enforce its rights by judicial process.  In so providing for non-judicial remedies,
Debtor recognizes and concedes that such remedies are consistent with the usage
of trade, are responsive to commercial necessity, and are the result of a
bargain at arm’s length.  Nothing herein
is intended, however, to prevent Secured Party or Debtor from resorting to
judicial process at its option.


 


Section 4.7.                                   Other Recourse. 
Debtor waives any right to require Secured Party or any Lender to
proceed against any other Person, to exhaust any Collateral or other security
for the Secured Obligations, or to have any Other Liable Party joined with
Debtor in any suit arising out of the Secured Obligations or this Agreement, or
pursue any other remedy in Secured Party’s power.  Debtor further waives any and all notice of acceptance of this
Agreement and of the creation, modification, rearrangement, renewal or
extension for any period of any of the Secured Obligations of any Other Liable
Party from time to time.  Debtor further
waives any defense arising by reason of any disability or other defense of any
Other Liable Party or by reason of the cessation from any cause whatsoever of
the liability of any Other Liable Party. 
This Agreement shall continue irrespective of the fact that the
liability of any Other Liable Party may have ceased and irrespective of the
validity or enforceability of any other Obligation Document to which Debtor or
any Other Liable Party may be a party, and notwithstanding any death,
incapacity, reorganization, or bankruptcy of any Other Liable Party or any
other event or proceeding affecting any Other Liable Party.  Until all of the Secured Obligations shall
have been paid in full, Debtor shall have no right to subrogation and Debtor
waives the right to enforce any remedy which Secured Party or any Lender has or
may hereafter have against any Other Liable Party, and waives any benefit of
and any right to participate in any other security whatsoever now or hereafter
held by Secured Party and each Lender. 
Debtor authorizes Secured Party, without notice or demand, without any
reservation of rights against Debtor, and without in any way affecting Debtor’s
liability hereunder or on the Secured Obligations, from time to time to (a)
take or hold any other property of any type from any other Person as security
for the Secured Obligations, and exchange, enforce, waive and release any or
all of such other property, (b) apply the Collateral or such other property and
direct the order or manner of sale thereof as Secured Party may in its
discretion determine, subject to the Intercreditor Agreement, (c) renew, extend
for any period, accelerate, modify, compromise, settle or release any of the
obligations of any Other Liable Party in respect of any or all of the Secured
Obligations or other security for the Secured Obligations, (d) waive, enforce,
modify, amend, restate or supplement any of the provisions of any Obligation
Document with any Person other than Debtor, and (e) release or substitute any
Other Liable Party.  Any action
described in this Section 4.7 may be taken by Secured Party only in
accordance with the Intercreditor Agreement.


 


14

















 


Section 4.8.                                   Voting Rights, Dividends, Etc. in Respect of
Pledged Shares.


 


(a)                   So long as no Event of Default shall have occurred
and be continuing Debtor may receive and retain any and all dividends or
interest paid in respect of the Pledged Shares; provided, however,
that any and all


 


(i)                  dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of or in exchange for, any
Pledged Shares,


 


(ii)               dividends and other distributions paid or
payable in cash in respect of any Pledged Shares in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, and


 


(iii)            cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Shares,


 


shall be, and shall
forthwith be delivered to Secured Party to hold as, Pledged Shares and shall,
if received by Debtor, be received in trust for the benefit of Secured Party,
be segregated from the other property or funds of Debtor, and be forthwith
delivered to Secured Party in the exact form received with any necessary
indorsement or appropriate stock powers duly executed in blank, to be held by
Secured Party as Collateral.


 


(b)                   Upon the occurrence and during the
continuance of an Event of Default:


 


(i)                  all rights of Debtor to receive and retain
the dividends and interest payments which it would otherwise be authorized to
receive and retain pursuant to subsection (a) of this section shall
automatically cease, and all such rights shall thereupon become vested in
Secured Party which shall thereupon have the sole right to receive and hold as
Pledged Shares such dividends and interest payments;


 


(ii)               without limiting the generality of the
foregoing, Secured Party may at its option (subject to the Intercreditor
Agreement) exercise any and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to any of the Pledged Shares
as if it were the absolute owner thereof, including, without limitation, the
right to exchange, in its discretion, any and all of the Pledged Shares upon
the merger, consolidation, reorganization, recapitalization or other adjustment
of any Issuer, or upon the exercise by any Issuer of any right, privilege or
option pertaining to any Pledged Shares, and, in connection therewith, to
deposit and deliver any and all of the Pledged Shares with any committee,
depository, transfer, agent, registrar or other designated agent upon such
terms and conditions as it may determine; and


 


(iii)            all dividends and interest payments which are
received by Debtor contrary to the provisions of subsection (b)(i) of this
section shall be received in


 


15

















 


trust for the benefit of
Secured Party, shall be segregated from other funds of Debtor, and shall be
forthwith paid over to Secured Party as Pledged Shares in the exact form
received, to be held by Secured Party as Collateral.


 


Section 4.9.                                   Private Sale of Pledged Shares. 
Debtor recognizes that Secured Party may deem it impracticable to effect
a public sale of all or any part of the Pledged Shares and that Secured Party
may, therefore, determine to make one or more private sales of any such
securities to a restricted group of purchasers who will be obligated to agree,
among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof.  Debtor acknowledges that any such private
sale may be at prices and on terms less favorable to the seller than the prices
and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sales shall be deemed
to have been made in a commercially reasonable manner and that Secured Party
shall have no obligation to delay sale of any such securities for the period of
time necessary to permit the Issuer of such securities to register such
securities for public sale under the Securities Act of 1933, as amended.  Debtor further acknowledges and agrees that
any offer to sell such securities which has been (a) publicly advertised on a bona
fide basis in a newspaper or other publication of general circulation in
the financial community of Denver, Colorado (to the extent that such an offer
may be so advertised without prior registration under the Securities Act), or
(b) made privately in the manner described above to not less than fifteen (15) bona
fide offerees shall be deemed to involve a “public disposition” for the
purposes of Section 9.610(c) of the UCC (or any successor or similar,
applicable statutory provision) as then in effect in the State of Texas,
notwithstanding that such sale may not constitute a “public offering” under the
Securities Act of 1933, as amended, and that Secured Party may, in such event,
bid for the purchase of such securities. 
Notwithstanding anything herein to the contrary, Secured Party
acknowledges that any sale hereunder with respect to a PUC Subsidiary may be
subject to the approval of any applicable public utility commission having
regulatory authority over such PUC Subsidiary.


 


ARTICLE VI
— Miscellaneous


 


Section 6.1.                                   Notices.  Any notice or communication
required or permitted hereunder shall be given as provided in the Credit
Agreement.


 


Section 6.2.                                   Amendments.  No amendment of any provision
of this Agreement shall be effective unless it is in writing and signed by
Debtor, Secured Party, and Required Lenders (or Debtor and Secured Party with
the prior written consent of Required Lenders) and no waiver of any provision
of this Agreement, and no consent to any departure by Debtor therefrom, shall
be effective unless it is in writing and signed by Secured Party with the prior
written consent of Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given and to the extent specified in such writing.


 


16

















 


Section 6.3.                                   Preservation of Rights.  No
failure on the part of Secured Party or any Lender to exercise, and no delay in
exercising, any right hereunder or under any other Obligation Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of
any other right.  Neither the execution
nor the delivery of this Agreement shall in any manner impair or affect any
other security for the Secured Obligations. 
The rights and remedies of Secured Party and each Lender provided herein
and in the other Obligation Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law.  The rights of Secured Party and each Lender
under any Obligation Document against any party thereto are not conditional or
contingent on any attempt by Secured Party or such Lender to exercise any of
its rights under any other Obligation Document against such party or against
any other Person.


 


Section 6.4.                                   Unenforceability.  Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or invalidity without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.


 


Section 6.5.                                   Survival of Agreements.  All
representations and warranties of Debtor herein, and all covenants and
agreements herein shall survive the execution and delivery of this Agreement,
the execution and delivery of any other Obligation Documents and the creation
of the Secured Obligations.


 


Section 6.6.                                   Other Liable Party. 
Neither this Agreement nor the exercise by Secured Party or the failure
of Secured Party to exercise any right, power or remedy conferred herein or by
law shall be construed as relieving any Other Liable Party from liability on
the Secured Obligations or any deficiency thereon.  This Agreement shall continue irrespective of the fact that the
liability of any Other Liable Party may have ceased or irrespective of the
validity or enforceability of any other Obligation Document to which Debtor or
any Other Liable Party may be a party, and notwithstanding the reorganization,
death, incapacity or bankruptcy of any Other Liable Party, and notwithstanding
the reorganization or bankruptcy or other event or proceeding affecting any Other
Liable Party.


 


Section 6.7.                                   Binding Effect and Assignment. 
This Agreement creates a continuing security interest in the Collateral
and (a) shall be binding on Debtor and its successors and permitted assigns and
(b) shall inure, together with all rights and remedies of Secured Party
hereunder, to the benefit of Secured Party that inure to the benefit of such
Lender, and their respective successors, transferees and assigns.  Without limiting the generality of the
foregoing, each Lender may (except as otherwise provided in and subject to the
Credit Agreement and the Intercreditor Agreement) pledge, assign or otherwise
transfer any or all of its rights under any or all of the Obligation Documents
to any other Person, and such other Person shall thereupon become vested with
all of the benefits in respect thereof, herein or otherwise.  None of the rights or duties of Debtor
hereunder may be assigned or otherwise transferred without the prior written
consent of Secured Party.


 


17

















 


Section 6.8.                                   Termination.  It is contemplated by the
parties hereto that there may be times when no Secured Obligations are
outstanding, but notwithstanding such occurrences, this Agreement shall remain
valid and shall be in full force and effect as to subsequent outstanding
Secured Obligations.  Upon the
satisfaction in full of the Secured Obligations, upon the termination or
expiration of the Credit Agreement and the Commitment, and upon written request
for the termination hereof delivered by Debtor to Secured Party, this Agreement
and the security interest created hereby shall terminate and all rights to the
Collateral shall revert to Debtor. 
Secured Party will, upon Debtor’s request and at Debtor’s reasonable
expense, (a) return to Debtor such of the Collateral as shall not have been
sold or otherwise disposed of or applied pursuant to the terms hereof; and (b)
execute and deliver to Debtor such documents as Debtor shall reasonably request
to evidence such termination.


 


SECTION 6.9.                  FINAL AGREEMENT.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES HERETO.  THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.


 


Section 6.10.                             Loan Document. 
This Agreement is a “Loan Document”, as defined in the Credit Agreement,
and, except as expressly provided herein to the contrary, this Agreement is
subject to all provisions of the Credit Agreement governing such Loan
Documents.


 


Section 6.11.                             Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas applicable to contracts made and to be performed
entirely within such State, except as required by mandatory provisions of law
and except to the extent that the perfection and the effect of perfection or
non-perfection of the security interest created hereunder, in respect of any
particular collateral, are governed by the laws of a jurisdiction other than
such State.


 


Section 6.12.                             Counterparts. 
This Agreement may be separately executed in any number of counterparts,
all of which when so executed shall be deemed to constitute one and the same
Agreement.


 


Section 6.13.                             Amendment and Restatement. 
This Agreement renews, amends and restates that certain Pledge Agreement
dated as of April 24, 2003, executed by Debtor in favor of Bank of
America, N.A., for the benefit of the “Lenders” named therein (the “Original
Pledge Agreement”), in its entirety, effective as of the date first written
above, and all of the terms and provisions hereof shall supersede the terms and
provisions thereof; provided, however that this Agreement renews, extends and
continues all Liens existing by the Original Pledge Agreement,


 


18

















 


although
the terms and provisions and conditions of such Liens shall hereafter be
governed in all respects by this Agreement.


 


[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 


19

















 


IN WITNESS WHEREOF, Debtor,
Secured Party, and each Lender has caused this Agreement to be executed and
delivered this Agreement by its officer thereunto duly authorized, as of the
date first above written.


 


 


	
   

  	
  MIGC, INC., as Debtor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President
  and

  
	
   

  	
   

  	
  Chief Financial Officer

  



 

















 


	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Secured Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Stein

  	
   

  
	
   

  	
   

  	
  Name: Richard L. Stein

  
	
   

  	
   

  	
  Title: Principal

  



 

















 


EXHIBIT A


 


Issuers


 


	
  Issuer

  	
   

  	
  Certificate No.

  	
   

  	
  No. of Shares

  	
   

  	
  Class

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MGTC, Inc.

  	
   

  	
  5

  	
   

  	
  60,000

  	
   

  	
  common