Document:

Exhibit 10.2

 

[Execution]

 

 

CREDIT AGREEMENT

 

dated as of April 24, 2003

 

among

 

WESTERN GAS RESOURCES, INC.

as the
Borrower

 

BANK OF AMERICA, N.A.

as
Administrative Agent and L/C Issuer

 

BANK ONE, NA

and

FLEET NATIONAL BANK

as Co-Syndication Agents

 

THE ROYAL BANK OF SCOTLAND plc

and

WACHOVIA BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents

 

and

 

THE OTHER
LENDERS PARTY HERETO

 

 

BANC OF AMERICA SECURITIES LLC,

as Sole
Lead Arranger and Sole Book Manager

 

 

 

 

TABLE
OF CONTENTS

 

	
  Section

  	
   

  
	
  ARTICLE
  I. DEFINITIONS AND ACCOUNTING TERMS

  
	
  1.01

  	
   

  	
  Defined Terms.

  
	
  1.02

  	
   

  	
  Other Interpretive
  Provisions.

  
	
  1.03

  	
   

  	
  Accounting Terms.

  
	
  1.04

  	
   

  	
  Rounding.

  
	
  1.05

  	
   

  	
  References to
  Agreements and Laws.

  
	
  1.06

  	
   

  	
  Times of Day.

  
	
  1.07

  	
   

  	
  Letter of Credit Amounts.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II. THE COMMITMENTS AND CREDIT EXTENSIONS

  
	
   

  
	
  2.01

  	
   

  	
  Loans.

  
	
  2.02

  	
   

  	
  Borrowings, Conversions and Continuations of Loans.

  
	
  2.03

  	
   

  	
  Letters of Credit.

  
	
  2.04

  	
   

  	
  Prepayments.

  
	
  2.05

  	
   

  	
  Termination or
  Reduction of Commitments.

  
	
  2.06

  	
   

  	
  Repayment of Loans.

  
	
  2.07

  	
   

  	
  Interest.

  
	
  2.08

  	
   

  	
  Fees.

  
	
  2.09

  	
   

  	
  Computation of
  Interest and Fees.

  
	
  2.10

  	
   

  	
  Evidence of Debt.

  
	
  2.11

  	
   

  	
  Payments
  Generally.

  
	
  2.12

  	
   

  	
  Sharing
  of Payments.

  
	
  2.13

  	
   

  	
  Increase
  in Commitments.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III. TAXES, YIELD PROTECTION AND ILLEGALITY

  
	
   

  	
   

  	
   

  
	
  3.01

  	
   

  	
  Taxes.

  
	
  3.02

  	
   

  	
  Illegality.

  
	
  3.03

  	
   

  	
  Inability to Determine
  Rates.

  
	
  3.04

  	
   

  	
  Increased
  Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.

  
	
  3.05

  	
   

  	
  Funding Losses.

  
	
  3.06

  	
   

  	
  Matters
  Applicable to all Requests for Compensation.

  
	
  3.07

  	
   

  	
  Survival.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  
	
   

  	
   

  	
   

  
	
  4.01

  	
   

  	
  Conditions of
  Initial Credit Extension.

  
	
  4.02

  	
   

  	
  Conditions to all
  Credit Extensions.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V. REPRESENTATIONS AND WARRANTIES

  
	
   

  	
   

  	
   

  
	
  5.01

  	
   

  	
  Existence, Qualification and Power; Compliance
  with Laws.

  
	
  5.02

  	
   

  	
  Authorization; No
  Contravention.

  
	
  5.03

  	
   

  	
  Governmental Authorization;
  Other Consents.

  
	
  5.04

  	
   

  	
  Binding Effect.

  
	
  5.05

  	
   

  	
  Financial
  Statements; No Material Adverse Effect.

  
	
  5.06

  	
   

  	
  Litigation.

  
	
  5.07

  	
   

  	
  No Default.

  
	
  5.08

  	
   

  	
  Ownership
  of Property; Liens.

  
				

 

i

 

 

	
  5.09

  	
   

  	
  Environmental
  Compliance.

  
	
  5.10

  	
   

  	
  Insurance.

  
	
  5.11

  	
   

  	
  Taxes.

  
	
  5.12

  	
   

  	
  ERISA Compliance.

  
	
  5.13

  	
   

  	
  Subsidiaries.

  
	
  5.14

  	
   

  	
  Margin
  Regulations; Investment Company Act; Public Utility Holding Company Act.

  
	
  5.15

  	
   

  	
  Disclosure.

  
	
  5.16

  	
   

  	
  Compliance
  with Laws.

  
	
  5.17

  	
   

  	
  Tax
  Shelter Regulations.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI. AFFIRMATIVE COVENANTS

  
	
   

  	
   

  	
   

  
	
  6.01

  	
   

  	
  Financial Statements.

  
	
  6.02

  	
   

  	
  Certificates; Other
  Information.

  
	
  6.03

  	
   

  	
  Notices.

  
	
  6.04

  	
   

  	
  Payment
  of Obligations.

  
	
  6.05

  	
   

  	
  Preservation of Existence, Etc.

  
	
  6.06

  	
   

  	
  Maintenance of Properties.

  
	
  6.07

  	
   

  	
  Maintenance
  of Insurance.

  
	
  6.08

  	
   

  	
  Compliance
  with Laws.

  
	
  6.09

  	
   

  	
  Books and Records.

  
	
  6.10

  	
   

  	
  Inspection Rights.

  
	
  6.11

  	
   

  	
  Use of Proceeds.

  
	
  6.12

  	
   

  	
  Guaranties of
  Borrower’s Subsidiaries.

  
	
  6.13

  	
   

  	
  Additional
  Guarantors and Stock Pledge.

  
	
  6.14

  	
   

  	
  Agreement to Deliver
  Mortgages.

  
	
  6.15

  	
   

  	
  Title Review.

  
	
  6.16

  	
   

  	
  Perfection
  and Protection of Security Interests and Liens.

  
	
  6.17

  	
   

  	
  Production
  Proceeds.

  
	
  6.18

  	
   

  	
  Sale or Disposal of
  Property.

  
	
  6.19

  	
   

  	
  Limitation on
  Effectiveness.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII. NEGATIVE COVENANTS

  
	
   

  	
   

  	
   

  
	
  7.01

  	
   

  	
  Liens.

  
	
  7.02

  	
   

  	
  Investments.

  
	
  7.03

  	
   

  	
  Indebtedness.

  
	
  7.04

  	
   

  	
  Fundamental
  Changes; Issuance of Stock.

  
	
  7.05

  	
   

  	
  Dispositions.

  
	
  7.06

  	
   

  	
  Restricted
  Payments.

  
	
  7.07

  	
   

  	
  Change in Nature of
  Business.

  
	
  7.08

  	
   

  	
  Transactions with
  Affiliates.

  
	
  7.09

  	
   

  	
  Burdensome
  Agreements.

  
	
  7.10

  	
   

  	
  Use of Proceeds.

  
	
  7.11

  	
   

  	
  Limitation for Net
  Products Exposure.

  
	
  7.12

  	
   

  	
  Financial
  Covenants.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII. EVENTS OF DEFAULT AND REMEDIES

  
	
   

  	
   

  	
   

  
	
  8.01

  	
   

  	
  Events of Default.

  
	
  8.02

  	
   

  	
  Remedies Upon Event of
  Default.

  
	
  8.03

  	
   

  	
  Application
  of Funds.

  

 

ii

 

 

	
  ARTICLE
  IX. ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
  9.01

  	
   

  	
  Appointment and Authorization
  of Administrative Agent.

  
	
  9.02

  	
   

  	
  Delegation
  of Duties.

  
	
  9.03

  	
   

  	
  Liability of
  Administrative Agent

  
	
  9.04

  	
   

  	
  Reliance by
  Administrative Agent.

  
	
  9.05

  	
   

  	
  Notice of Default.

  
	
  9.06

  	
   

  	
  Credit
  Decision; Disclosure of Information by Administrative Agent.

  
	
  9.07

  	
   

  	
  Indemnification
  of Administrative Agent.

  
	
  9.08

  	
   

  	
  Administrative
  Agent in its Individual Capacity.

  
	
  9.09

  	
   

  	
  Successor Administrative
  Agent.

  
	
  9.10

  	
   

  	
  Administrative
  Agent May File Proofs of Claim.

  
	
  9.11

  	
   

  	
  Collateral and Guaranty
  Matters.

  
	
  9.12

  	
   

  	
  Other Agents;
  Arrangers and Managers.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X. MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  10.01

  	
   

  	
  Amendments, Etc.

  
	
  10.02

  	
   

  	
  Notices
  and Other Communications; Facsimile Copies.

  
	
  10.03

  	
   

  	
  No Waiver; Cumulative
  Remedies.

  
	
  10.04

  	
   

  	
  Attorney Costs, Expenses and Taxes.

  
	
  10.05

  	
   

  	
  Indemnification by the
  Borrower.

  
	
  10.06

  	
   

  	
  Payments Set Aside.

  
	
  10.07

  	
   

  	
  Successors
  and Assigns.

  
	
  10.08

  	
   

  	
  Confidentiality.

  
	
  10.09

  	
   

  	
  Set-off.

  
	
  10.10

  	
   

  	
  Interest Rate Limitation.

  
	
  10.11

  	
   

  	
  Counterparts.

  
	
  10.12

  	
   

  	
  Integration.

  
	
  10.13

  	
   

  	
  Survival of
  Representations and Warranties.

  
	
  10.14

  	
   

  	
  Severability.

  
	
  10.15

  	
   

  	
  Tax Forms.

  
	
  10.16

  	
   

  	
  Replacement
  of Lenders; Replacement of Rating Agency.

  
	
  10.17

  	
   

  	
  Governing Law.

  
	
  10.18

  	
   

  	
  Waiver of Right to
  Trial by Jury.

  
	
  10.19

  	
   

  	
  ENTIRE AGREEMENT.

  
	
  10.20

  	
   

  	
  Restatement.

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  

 

iii

 

 

	
  SCHEDULES

  
	
   

  	
   

  	
   

  
	
  2.01

  	
   

  	
  Commitments
  and Pro Rata Shares

  
	
  5.05

  	
   

  	
  Material
  Indebtedness

  
	
  5.12

  	
   

  	
  ERISA
  Compliance

  
	
  5.13

  	
   

  	
  Subsidiaries
  and Other Equity Investments

  
	
  7.01

  	
   

  	
  Existing
  Liens

  
	
  7.02

  	
   

  	
  Joint
  Ventures

  
	
  7.03

  	
   

  	
  Existing
  Indebtedness

  
	
  10.02

  	
   

  	
  Administrative
  Agent’s Office, Certain Addresses for Notices

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Form of

  
	
  A

  	
   

  	
  Loan
  Notice

  
	
  B

  	
   

  	
  Note

  
	
  C

  	
   

  	
  Compliance
  Certificate

  
	
  D

  	
   

  	
  Assignment
  and Assumption

  
	
  E

  	
   

  	
  Guaranty

  
	
  F

  	
   

  	
  Opinion
  Matters

  
	
  G

  	
   

  	
  Form
  of Mortgage

  

 

iv

 

 

CREDIT AGREEMENT

 

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

 

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

 

The
Borrower has requested that the Lenders amend and restate the Existing Credit
Agreement in its entirety, and the Lenders are willing to do so on the terms
and conditions set forth herein.

 

In
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I. 

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

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

 

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

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.

 

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

 

“Aggregate
Commitments” means as of the date hereof the Commitments of all the Lenders
in the aggregate amount of $300,000,000 as increased from time to time pursuant
to Section 2.13.

 

“Agreement”
means this Credit Agreement.

 

“Applicable
Rate” means, from time to time, the following percentages per annum for
each category of Facility Fee, Eurodollar Rate, Letters of Credit and Base Rate
set forth below, respectively, based upon the Debt to Capitalization Ratio as
set forth below:

	
   

  	
   

  	
  Applicable Rate

  	
   

  
	
  Pricing  
Level

  	
   

  	
  Debt to

  Capitalization
Ratio

  	
   

  	
  Facility Fee

  	
   

  	
  Eurodollar  

  Rate +

  	
   

  	
  Base Rate  +

  	
   

  
	
  Letters of  
Credit

  
	
  1

  	
   

  	
  <0.35:1

  	
   

  	
  0.300

  	
  %

  	
  1.200

  	
  %

  	
  0.250

  	
  %

  
	
  2

  	
   

  	
  >0.35:1 <0.40:1

  	
   

  	
  0.375

  	
  %

  	
  1.250

  	
  %

  	
  0.375

  	
  %

  
	
  3

  	
   

  	
  >0.40:1 <0.45:1

  	
   

  	
  0.375

  	
  %

  	
  1.375

  	
  %

  	
  0.500

  	
  %

  
	
  4

  	
   

  	
  >0.45:1 <0.50:1

  	
   

  	
  0.500

  	
  %

  	
  1.500

  	
  %

  	
  0.750

  	
  %

  
	
  5

  	
   

  	
  >0.50:1

  	
   

  	
  0.500

  	
  %

  	
  1.750

  	
  %

  	
  1.000

  	
  %

  

 

Any
increase or decrease in the Applicable Rate resulting from a change in the Debt
to Capitalization Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant
to Section 6.02(b); provided, however, that (i) if the
Borrower or a Subsidiary is making a significant acquisition or selling
significant assets, the Borrower may request a decrease or increase in the
Applicable Rate during a fiscal quarter and deliver to the Administrative Agent
and Lenders with such request proforma financial statements in form acceptable
to Administrative Agent together with a calculation of the Debt to
Capitalization Ratio based upon such financial statements and if Administrative
Agent determines that the Borrower’s calculation is correct, the reduced or
increased Applicable Rate shall become effective on the fifth Business Day
following the date on which notice thereof is given to Administrative Agent and
to Lenders, and (ii) if a Compliance Certificate is not delivered when due in
accordance with Section 6.02(b), then Pricing Level 5 shall apply as of
the first Business Day after the date on which such Compliance Certificate was
required to have been delivered.  The
Applicable Rate in effect from the Closing Date through the first Business Day
thereafter on which such a Compliance Certificate is received by Agent, shall
be determined based upon Pricing Level 3.

 

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

 

2

 

“Assignment
and Assumption” means an Assignment and Assumption substantially in the
form of Exhibit D.

 

“Attorney
Costs” means and includes all reasonable fees, expenses and disbursements
of external counsel.

 

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

 

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

 

“Availability
Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate
Commitments pursuant to Section 2.05, and (c) the date of termination of
the commitment of each Lender to make Loans and of the obligation of the of the
L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

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

 

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

 

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

 

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

 

“Borrowing”
means a Committed Borrowing.

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

 

3

 

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

 

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

 

(a)           any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) after the Closing Date
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 25% or more of the equity securities of the Borrower entitled to
vote for members of the board of directors of the Borrower on a fully-diluted
basis (and taking into account all such securities that such person or group
has the right to acquire pursuant to any option right); or

 

(b)           during any period of 24 consecutive
months, a majority of the members of the board of directors of the Borrower
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses
(i) and (ii) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or more
directors by any person or group other than a solicitation for the election of
one or more directors by or on behalf of the board of directors); or

 

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

 

“Closing
Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 4.01 (or, in the case
of Section 4.01(b), waived by the Person entitled to receive the
applicable payment).

 

“Code”
means the Internal Revenue Code of 1986.

 

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

 

“Commitment”
means, as to each Lender, its obligation to (a) make Loans to the Borrower
pursuant to Section 2.01 and (b) purchase participations in L/C
Obligations, in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth

 

4

 

opposite such Lender’s name on Schedule
2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.

 

“Commitment
Letter” means that certain agreement dated February 13, 2003, among the
Borrower, Administrative Agent and Arranger.

 

“Committed
Borrowing” means a borrowing consisting of simultaneous Loans of the same
Type and, in the case of Eurodollar Rate Loans, having the same Interest Period
made by each of the Lenders pursuant to Section 2.01.

 

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

 

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

 

“Consolidated
Funded Indebtedness” means, as of any date of determination, for the
Borrower and its Subsidiaries calculated on a consolidated basis, the sum of
(a) the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness (e.g., seller
financings), (c) all direct obligations arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments, (d) all obligations in respect of the deferred
purchase price of property or services (other than trade accounts payable in
the ordinary course of business), (e) Attributable Indebtedness in respect of
capital leases and operating leases (but
only the aggregate amount thereof which at the time in question exceeds
$35,000,000 excluding Obligations arising under oil and gas leases, gas
compressor and gas processing plant site leases, real estate leases for office
space used by the Borrower and leases for vehicles, office equipment and data
processing equipment) and Synthetic Lease Obligations, (f) without
duplication, all Guarantees with respect to outstanding Indebtedness of the
types specified in clauses (a) through (e) above of Persons other than the
Borrower or any Subsidiary, and (g) all Indebtedness of the types referred to
in clauses (a) through (f) above of any partnership or joint venture (other
than a joint venture that is itself a corporation or limited liability company)
in which the Borrower or a Subsidiary is a general partner or joint venturer,
unless such Indebtedness is expressly made non-recourse to the Borrower or such
Subsidiary.

 

“Consolidated
Interest Charges” means, for any period, Interest Charges for the Borrower
and its Subsidiaries calculated on a consolidated basis.

 

“Consolidated
Net Income” means, for any period, Net Income for the Borrower and its
Subsidiaries calculated on a consolidated basis.

 

“Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement or instrument to which such Person is a
party or by which it or any of its property is bound.

 

5

 

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

 

“CP
Debt” means unsecured Indebtedness in the form of commercial paper issued
by Borrower which meets the following requirements: (i) such Indebtedness has a
maturity of not more than 270 days after the date of issuance thereof, (ii) the
offering of such Indebtedness is not required to be registered under the
Securities Act of 1933, as amended, (iii) such Indebtedness is not the subject
of a Guarantee of any Loan Party, (iv) at the time Borrower incurs such
Indebtedness, no Default or Event of Default shall have occurred and be
continuing hereunder, and (v) the documentation evidencing such Indebtedness
shall contain no terms, conditions or defaults (other than pricing and back-up
availability under this Agreement) which are more favorable to the third party
creditor than those contained in this Agreement are to Lenders, as determined
by Required Lenders in their discretion (provided that Required Lenders shall
make any such determination at the time the initial documentation covering the
issuance of CP Debt is executed and delivered and each time such documentation
is modified, taking into consideration any amendments or modifications to this
Agreement then in effect), and shall not contain any provision which attempts
to modify, amend or restrict any of the rights or remedies of Administrative Agent
or Lenders hereunder or under any of the other Loan Documents.

 

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

 

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

 

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

 

“Debtor
Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the

 

6

 

United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Debt
Securities” means the $50,000,000 aggregate principal amount of 7.61%
Senior Notes due July 28, 2007, $25,000,000 aggregate principal amount of 7.99%
Senior Notes due October 27, 2003, $25,000,000 aggregate principal amount of
9.24% Senior Notes due October 27, 2004, $25,000,000 aggregate principal amount
of 6.36% Senior Notes, Series H, due January 17, 2008, $25,000,000 aggregate
principal amount of 7.23% Senior Notes due December 27, 2003, issued by
Borrower prior to the date hereof, and all other senior notes from time to time
hereafter issued by the Borrower pursuant to that certain Third Amended and
Restated Master Shelf Agreement effective as of January 13, 2003, between the
Borrower and The Prudential Insurance Company of America, Prudential Investment
Management, Inc. (“Prudential”), Pruco Life Insurance Company and certain
Prudential Affiliates, as amended, supplemented, modified and restated from
time to time in an aggregate principal amount not to exceed $265,000,000,
outstanding at any time.

 

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

 

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

 

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

 

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

 

“Disposition”
or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

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

 

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

 

7

 

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

 

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

 

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

 

“Environmental
Laws” means any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

“Environmental Liability” means any
liability, contingent or otherwise (including any liability for damages, costs
of environmental remediation, fines, penalties or indemnities), of the
Borrower, any other Loan Party or any of their respective Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

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

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

 

“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations
that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; or (e) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

8

 

“Eurodollar
Rate” means for any Interest Period with respect to any Eurodollar Rate
Loan:

 

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

 

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

 

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

 

“Eurodollar
Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

 

“Event
of Default” has the meaning specified in Section 8.01.

 

“Existing
Credit Agreement” has the meaning specified in the preamble of this
Agreement.

 

“Existing
Letters of Credit” means those letters of credit issued by Administrative
Agent under the Existing Credit Agreement prior to the date hereof that are
outstanding as of the date hereof.

 

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

 

9

 

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

 

“Fee
Letter” means the letter agreement, dated February 13, 2003, among the
Borrower, the Administrative Agent and the Arranger.

 

“FERC”
means any federal energy regulatory commission.

 

“Fixed
Charge Coverage Ratio” means, as of the end of any fiscal quarter, the
ratio of (a) Consolidated EBITDA for the four consecutive fiscal quarters
then ended to (b) the sum of
Consolidated Interest Charges for such period plus the aggregate amount of
dividends paid or declared by the Borrower during such period in respect of the
Preferred Stock, not to exceed four regularly scheduled dividends and all
special dividends.  For purposes of the
“Fixed Charge Coverage Ratio,” EBITDA shall be calculated excluding gains and
losses on asset sales and other extraordinary items.

 

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

 

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

 

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

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, administrative tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers
or functions of or pertaining to government.

 

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

 

10

 

in respect of such Indebtedness or other
obligation of the payment or performance thereof or to protect such obligee
against loss in respect thereof (in whole or in part), or (b) any Lien (other
than Permitted Liens as defined in Section 7.01) on any assets of such Person
securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such Person.  The amount of any Guarantee shall be deemed
to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith.  The term “Guarantee” as a verb
has a corresponding meaning.

 

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

 

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

 

“Hazardous Materials” means all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes
or other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

 

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

 

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

 

(b)           all direct or contingent obligations
of such Person arising under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments;

 

(c)           net obligations of such Person under
any Swap Contract;

 

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

 

(e)           indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;

 

(f)            capital leases, operating leases and
Synthetic Lease Obligations;

 

11

 

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

 

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

 

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

 

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

 

“Indemnified
Liabilities” has the meaning set forth in Section 10.05.

 

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

 

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

 

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

 

“Interest
Charges” means for any Person for any Period, all interest accrued during
such Period by such Person in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP.

 

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

 

“Interest
Period” means as to each Eurodollar Rate Loan, the period commencing on the
date such Eurodollar Rate Loan is disbursed or converted to or continued as a
Eurodollar Rate

 

12

 

Loan and ending on the date one, two, three
or six months thereafter, as selected by the Borrower in its Loan Notice; provided
that:

 

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

 

(ii)           any Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

 

(iii)          no Interest Period shall extend beyond
the Maturity Date.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person, or (c) the purchase or other acquisition (in one transaction or a
series of transactions) of assets of another Person that constitute a business
unit.  For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“IRS”
means the United States Internal Revenue Service.

 

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

 

“Laws”
means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.

 

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

 

“L/C
Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing.

 

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

 

13

 

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

 

“L/C
Obligations” means, as at any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.

 

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

 

“Lending
Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“Letter
of Credit” means any letter of credit issued hereunder and shall include
the Existing Letters of Credit.  A
Letter of Credit may be a commercial letter of credit or a standby letter of
credit.

 

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

 

“Letter
of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).

 

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

 

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

 

“Loan”
has the meaning specified in Section 2.01.

 

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

 

14

 

therewith (excluding term sheets, commitment
letters, correspondence and similar documents used in the negotiation hereof
and further excluding all offering memorandums prepared by Administrative Agent
or its Affiliates for use in connection with the Loans).

 

“Loan
Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

 

“Loan
Parties” means, collectively, the Borrower and each Guarantor.

 

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

 

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

 

“Maturity
Date” means April 24, 2007.

 

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

 

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

 

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

 

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

 

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

 

“Multiemployer
Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

 

“Net
Income” means, for any period, for any Person, the net income of the
Borrower and its Subsidiaries for that period.

 

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

 

15

 

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

 

“Organization
Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Outstanding
Amount” means (i) with respect to Loans, on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Loans, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.

 

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

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

“Pension
Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA
Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.

 

“Permitted
Lien” has the meaning set forth in Section 7.01.

 

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

 

16

 

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

 

“Preferred
Stock” means all issued and outstanding preferred stock of the Borrower, as
the same may change from time to time, including but not limited to the
2,760,000 shares of $2.625 Cumulative Convertible Preferred Stock of the
Borrower.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Request
for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Loans, a Loan Notice and (b) with respect to an L/C Credit
Extension, a Letter of Credit Application.

 

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

 

17

 

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

 

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

 

“Restricted
Payment” means (i) any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
equity interest of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such capital stock or
other equity interest or (ii) any purchase, repurchase, defeasance or
prepayment of the Debt Securities or the Subordinated Debt excluding regularly
scheduled payments of principal and interest.

 

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

 

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

 

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

 

“Security
Documents” means all security agreements, deeds of trust, mortgages, chattel
mortgages, pledges, guaranties, financing statements, continuation statements,
extension agreements and other agreements or instruments now, heretofore, or
hereafter delivered by Borrower or any Subsidiary to Administrative Agent in
connection with this Agreement or any transaction contemplated hereby to secure
or guarantee the payment of any part of the Obligations or the performance of
the other duties and obligations of Borrower or any Subsidiary under the Loan
Documents.

 

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

 

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

 

18

 

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

 

“Stock
Option Agreements” means, collectively, those certain Agreements to Provide
Loan(s) to enable certain employees to exercise stock options by and among
Borrower and certain of its key employees.

 

“Stock
Pledge” means, collectively the pledge agreements necessary to pledge all
of the equity interests in the Material Domestic Subsidiaries and 65% of the
equity interests in Borrower’s foreign Subsidiaries, in form and substance
acceptable to Administrative Agent.

 

“Subordinated
Debt” means unsecured Indebtedness issued by Borrower that is subordinated
by its terms to the Obligations and the Debt Securities on terms acceptable to
Required Lenders and guarantees thereof by Borrower’s Subsidiaries each of
which is subordinated by its terms to the Obligations and the Debt Securities
on terms acceptable to Required Lenders.

 

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

 

“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),

 

19

 

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).

 

“Synthetic
Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment), excluding with respect to
this clause (ii) agreements entered into in the ordinary course of such Person’s
business.

 

“Total
Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

 

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

 

“Unfunded
Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)           Section headings herein and in the
other Loan Documents are included for convenience of reference only and shall
not affect the interpretation of this Agreement or any other Loan Document.

 

1.03        Accounting Terms.  (a)  All accounting terms
not specifically or completely defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically
prescribed herein.

 

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

 

1.04        Rounding.  Any financial ratios required to be maintained
by the Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such

 

21

 

ratio is expressed herein and rounding the
result up or down to the nearest number (with a rounding-up if there is no
nearest number).

 

1.05        References to Agreements and Laws.  Unless otherwise expressly provided herein,
(a) references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not
prohibited by any Loan Document; and (b) references to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.

 

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

 

1.07        Letter of Credit Amounts.   Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to mean
the maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.

 

ARTICLE II.  

THE COMMITMENTS AND CREDIT EXTENSIONS

 

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

 

2.02        Borrowings,
Conversions and Continuations of Loans.

 

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

 

22

 

Borrower pursuant to this Section 2.02(a)
must be confirmed promptly by delivery to the Administrative Agent of a written
Loan Notice, appropriately completed and signed by a Responsible Officer of the
Borrower.  Each Borrowing of, conversion
to or continuation of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Sections 3.02 and
3.03(c), each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $250,000 or a whole multiple of $100,000 in excess
thereof.  Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a
Committed Borrowing, a conversion of Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the
Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Loans are
to be converted, and (v) if applicable, the duration of the Interest Period
with respect thereto.  If the Borrower
fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Loan
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

 

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

 

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

 

(d)           The Administrative Agent shall
promptly notify the Borrower and the Lenders of the interest rate applicable to
any Interest Period for Eurodollar Rate Loans upon determination

 

23

 

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

 

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

 

2.03        Letters of Credit.

 

(a)           The Letter of Credit Commitment.

 

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

 

(ii)           The L/C Issuer shall be under no
obligation to issue any Letter of Credit if:

 

(A)          any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over the
L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with

 

24

 

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

 

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

 

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

 

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

 

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

 

(iii)          The L/C Issuer shall be under no
obligation to amend any Letter of Credit if (A) the L/C Issuer would have no
obligation at such time to issue such Letter of Credit in its amended form under
the terms hereof, or (B) the beneficiary of such Letter of Credit does not
accept the proposed amendment to such Letter of Credit.

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

(c)           Drawings and Reimbursements;
Funding of Participations.

 

26

 

(i)            Upon receipt from the beneficiary of
any Letter of Credit of any notice of a drawing under such Letter of Credit,
the L/C Issuer shall notify the Borrower and the Administrative Agent
thereof.  Not later than 11:00 a.m. on
the date of any payment by the L/C Issuer under a Letter of Credit (each such
date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer
through the Administrative Agent in an amount equal to the amount of such
drawing.  If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall promptly
notify each Lender of the Honor Date, the amount of the unreimbursed drawing
(the “Unreimbursed Amount”), and the amount of such Lender’s Pro Rata
Share thereof.  In such event, the
Borrower shall be deemed to have requested a Committed Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in Section
2.02 for the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Loan Notice).  Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of
such an immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.

 

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

 

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

 

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

 

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

 

27

 

Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth
in Section 4.02 (other than delivery by the Borrower of a Loan
Notice).  No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the Borrower to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.

 

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

 

(d)           Repayment of Participations.

 

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

 

(ii)           If any payment received by the
Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(i) is required to be returned under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered
into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata Share
thereof on demand of the Administrative Agent, plus interest thereon from the
date of such demand to the date such amount is returned by such Lender, at a
rate per annum equal to the Federal Funds Rate from time to time in effect.

 

28

 

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

 

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

 

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

 

(iii)          any draft, demand, certificate or
other document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;

 

(iv)          any payment by the L/C Issuer under
such Letter of Credit against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of Credit; or any payment
made by the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising
in connection with any proceeding under any Debtor Relief Law; or

 

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

 

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

 

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

 

29

 

herewith
at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application.  The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary
or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, any Agent-Related
Person, nor any of the respective correspondents, participants or assignees of
the L/C Issuer, shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e); provided, however,
that anything in such clauses to the contrary notwithstanding, the Borrower may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer’s willful misconduct or gross negligence
or the L/C Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral.  Upon the request of the Administrative
Agent, (i) if the L/C Issuer has honored any full or partial drawing request
under any Letter of Credit and such drawing has resulted in an L/C Borrowing,
or (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit
may for any reason remain outstanding and partially or wholly undrawn, the
Borrower shall immediately Cash Collateralize the then Outstanding Amount of
all L/C Obligations (in an amount equal to such Outstanding Amount determined
as of the date of such L/C Borrowing or the Letter of Credit Expiration Date,
as the case may be).  For purposes
hereof, “Cash Collateralize” means to pledge and deposit with or deliver
to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders,
as collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented
to by the Lenders).  Derivatives of such
term have corresponding meanings.  The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing.  Cash collateral shall be maintained in
blocked, non-interest bearing deposit accounts by Administrative Agent.

 

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

 

30

 

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

 

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

 

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

 

(k)           Conflict with Letter of Credit
Application.  In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.

 

2.04        Prepayments.

 

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

 

31

 

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

 

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

 

2.05        Termination or Reduction of
Commitments.  The
Borrower may, upon notice to the Administrative Agent, terminate the Aggregate
Commitments, or from time to time permanently reduce the Aggregate Commitments;
provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in
an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in
excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments, and
(iv) if, after giving effect to any reduction of the Aggregate Commitments, the
Letter of Credit Sublimit exceeds the amount of the Aggregate Commitments, such
Sublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly
notify the Lenders of any such notice of termination or reduction of the
Aggregate Commitments.  Any reduction of
the Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Pro Rata Share.  All facility fees accrued until the
effective date of any termination of the Aggregate Commitments shall be paid on
the effective date of such termination.

 

2.06        Repayment of Loans.  The Borrower shall repay to the Lenders on
the Maturity Date the aggregate principal amount of Loans outstanding on such
date.

 

2.07        Interest.

 

(a)           Subject to the provisions of
subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the
outstanding principal amount thereof for each Interest Period at a rate per
annum equal to the Eurodollar Rate for such Interest Period plus the
Applicable Rate for Eurodollar Loans and (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate for Base Rate Loans.

 

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

 

32

 

acceleration
or otherwise, such amount shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws. 
Furthermore,  while any Event
of Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.  Accrued and unpaid
interest on past due amounts (including interest on past due interest) shall be
due and payable upon demand.

 

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

 

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

 

(a)           Facility Fee.  The
Borrower shall pay to the Administrative Agent for the account of each Lender
in accordance with its Pro Rata Share, a facility fee equal to the Applicable
Rate for the Facility Fee times the actual daily amount of the Aggregate
Commitments (or, if the Aggregate Commitments have terminated, on the
Outstanding Amount of all Loans and L/C Obligations), regardless of usage.  The facility fee shall accrue at all times
during the Availability Period (and thereafter so long as any Loans or L/C
Obligations remain outstanding), including at any time during which one or more
of the conditions in Article IV is not met, and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September
and December, commencing with the first such date to occur after the Closing
Date, and on the Maturity Date (and, if applicable, thereafter on demand).  The facility fee shall be calculated
quarterly in arrears, and if there is any change in the Applicable Rate for the
Facility Fee during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate for the Facility Fee separately for each
period during such quarter that such Applicable Rate for the Facility Fee was
in effect.

 

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

 

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

 

33

 

2.10        Evidence of Debt.

 

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

 

(b)           In addition to the accounts and
records referred to in subsection (a), each Lender and the Administrative Agent
shall maintain in accordance with its usual practice accounts or records
evidencing the purchases and sales by such Lender of participations in Letters
of Credit.  In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.

 

2.11        Payments Generally.

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

A
notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (c) shall be conclusive, absent
manifest error.

 

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

 

(e)           The obligations of the Lenders
hereunder to make Loans and to fund participations in Letters of Credit are
several and not joint.  The failure of
any Lender to make any Loan or to fund any such participation on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan or purchase its participation.

 

35

 

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

 

2.12        Sharing of Payments.  If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it,
or the participations in L/C Obligations held by it, any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans made by them and/or such subparticipations in the participations
in L/C Obligations held by them, as the case may be, as shall be necessary to
cause such purchasing Lender to share the excess payment in respect of such
Loans or such participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described
in Section 10.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) 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, without further
interest thereon.  The Borrower agrees
that any Lender so purchasing a participation from another Lender may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 10.09) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. 
The Administrative Agent will keep records (which shall be conclusive
and binding in the absence of manifest error) of participations purchased under
this Section and will in each case notify the Lenders following any such
purchases or repayments.  Each Lender that
purchases a participation pursuant to this Section shall from and after such
purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

 

2.13        Increase
in Commitments.

 

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

 

36

 

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

 

(b)           If the Aggregate Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrower shall determine the
effective date (the “Increase Effective Date”) and the final allocation
of such increase.  The Administrative
Agent shall promptly notify the Borrower and the Lenders of the final
allocation of such increase and the Increase Effective Date.  As a condition precedent to such increase,
the Borrower shall deliver to the Administrative Agent a certificate of each
Loan Party dated as of the Increase Effective Date (in sufficient copies for
each Lender) signed by a Responsible Officer of such Loan Party
(i) certifying and attaching the resolutions adopted by such Loan Party approving
or consenting to such increase, and (ii) in the case of the Borrower,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article V and the other Loan
Documents are true and correct on and as of the Extension Effective Date,
except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that for purposes of this Section 2.13, the
representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished
pursuant to subsections (a) and (b), respectively, of Section 6.01, and
(B) no Default exists.  The Borrower
shall prepay any Loans outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 3.05) to the extent
necessary to keep the outstanding Loans ratable with any revised Pro Rata
Shares arising from any nonratable increase in the Commitments under this
Section.

 

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

 

ARTICLE III. 

TAXES,
YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)           Any and all payments by the Borrower
to or for the account of the Administrative Agent or any Lender under any Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and all liabilities with respect
thereto, excluding, in the case of the Administrative Agent and each
Lender, taxes imposed on or measured by its overall net income, and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which the Administrative Agent
or such Lender, as the case may be, is organized or maintains a lending office
(all such non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as “Taxes”).  If the
Borrower shall be required by any Laws to deduct any Taxes from or in respect
of any sum payable under any Loan Document to the Administrative Agent or any
Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums

 

37

 

payable
under this Section), each of the Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Borrower shall furnish to the
Administrative Agent (which shall forward the same to such Lender) the original
or a certified copy of a receipt evidencing payment thereof.

 

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

 

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

 

(d)           The Borrower agrees to indemnify the
Administrative Agent and each Lender for (i) the full amount of Taxes and Other
Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Administrative
Agent and such Lender, (ii) amounts payable under Section 3.01(c) and
(iii) any liability (including additions to tax, penalties, interest and
expenses) arising therefrom or with respect thereto, in each case whether or
not such Taxes or Other Taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority. 
Payment under this subsection (d) shall be made within 30 days after the
date the Lender or the Administrative Agent makes a demand therefor.

 

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

 

38

 

such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender.

 

3.03        Inability to Determine Rates.  If the Required Lenders determine that for
any reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan, or that the Eurodollar Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan does not adequately and fairly
reflect the cost to such Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain
Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon
the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrower
may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Committed Borrowing of Base Rate Loans
in the amount specified therein.

 

3.04        Increased
Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.

 

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

 

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

 

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

 

39

 

allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such Loan, provided the Borrower shall have received at least
15 days’ prior notice (with a copy to the Administrative Agent) of such
additional interest from such Lender. 
If a Lender fails to give notice 15 days prior to the relevant Interest
Payment Date, such additional interest shall be due and payable 15 days from
receipt of such notice.

 

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

 

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

 

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

 

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

 

For
purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar
Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan was in fact so funded.

 

3.06        Matters Applicable to all Requests for
Compensation.

 

(a)           A certificate
of the Administrative Agent or any Lender claiming compensation under this Article
III and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error.  In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods.

 

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

 

3.07        Survival.  All
of the Borrower’s obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.

 

40

 

For purposes of this Article III only, the
term “Laws” shall include any and all guidelines of any Governmental Authority
and the interpretation or administration of the Laws by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof.

 

ARTICLE IV.  

CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS

 

4.01        Conditions of Initial Credit Extension.  The obligation of each Lender to make its
initial Credit Extension hereunder is subject to satisfaction of the following
conditions precedent:

 

(a)           The Administrative
Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and its legal counsel:

 

(i)            executed counterparts of this
Agreement, the Guaranty, and the
Stock Pledge and the Intercreditor Agreement sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;

 

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

 

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

 

(iv)          such documents and certifications as
the Administrative Agent may reasonably require to evidence that each Loan
Party is duly organized or formed, and that each of the Borrower and
the Guarantors is validly existing, in good standing and qualified to
engage in business in each jurisdiction
where its ownership, lease or operation of properties or the conduct of its
business requires such qualification, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect;

 

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

 

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

 

41

 

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

 

(viii)        a certificate signed by a Responsible
Officer of the Borrower certifying (A) that the conditions specified in Sections
4.02(a) and (b) have been satisfied, and (B) that there has been no event or circumstance since
the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect; and (C) the
calculation of the Debt to Capitalization Ratio as of December 31, 2002;

 

(ix)                           evidence
that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect;

 

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

 

(xi)                           projections of
Borrower and its Consolidated Subsidiaries for the fiscal years 2003 through
2006, prepared by the Financing Planning Department of Borrower and reviewed by
the Chief Financial Officer of Borrower;

 

(ix)           such other
assurances, certificates, documents, consents or opinions as the Administrative
Agent, the L/C Issuer or the Required Lenders reasonably may require.

 

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

 

(c)           The Indebtedness under the Existing
Credit agreement shall be refinanced with proceeds of the initial Credit
Extension.

 

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

 

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

 

(a)           The representations
and warranties of the Borrower and each
other Loan Party contained in Article V or any other Loan
Document, or which are contained in any document

 

42

 

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

 

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

 

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

 

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

 

ARTICLE V. 

REPRESENTATIONS AND WARRANTIES

 

The
Borrower represents and warrants to the Administrative Agent and the Lenders
that:

 

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

 

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

 

43

 

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

 

5.04.       Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms; except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at Law).

 

5.05        Financial Statements; No
Material Adverse Effect.

 

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

 

(b)           The audited consolidated financial
statements of the Borrower and its Subsidiaries as of and for the year ended
December 31, 2002, including consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal year ended on that date (i)
were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and (ii)
fairly present the financial condition of the Borrower and its Subsidiaries as
of the date thereof and their results of operations for the period covered
thereby.  Schedule 5.05 (as hereafter
supplemented from time to time in writing) sets forth all material indebtedness
and other material liabilities, direct or contingent, of the Borrower and its
consolidated Subsidiaries as of the date of such financial statements (but not
disclosed therein), including material liabilities for taxes, material
commitments and material Indebtedness.

 

(c)           Since the date of the Audited
Financial Statements, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

 

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

 

44

 

knowledge
of the Responsible Officers after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.

 

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

 

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

 

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

 

5.10.       Insurance.  The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or the applicable Subsidiary operates.

 

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

 

45

 

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

 

5.12        ERISA Compliance.

 

(a)           Each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Laws.  The Borrower and each ERISA
Affiliate have made all required contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.

 

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

 

(c)           (i) 
No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.

 

5.13        Subsidiaries.  As
of the Closing Date, the Borrower has no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13 and has no material equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of Schedule 5.13.

 

5.14        Margin Regulations; Investment Company Act; Public
Utility Holding Company Act.

 

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

 

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

 

46

 

5.15        Disclosure.  The
Borrower has disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  For purposes
of this Section 5.15, information that is disclosed in reports on Forms
10-K, 10-Q and 8-K or in definitive proxy materials filed by the Borrower with
the SEC shall be deemed to have been disclosed to the Administrative Agent and
the Lenders.  No report, financial
statement, certificate or other information furnished (whether in writing or
orally) by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

 

5.16        Compliance with Laws.  Each of the Borrower and each Subsidiary is
in compliance in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

5.17        Tax Shelter Regulations.  The
Borrower does not intend to treat the Loans and/or Letters of Credit and
related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4). 
In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Administrative Agent
thereof.  If the Borrower so notifies
the Administrative Agent, the Borrower acknowledges that one or more of the
Lenders may treat its Loans and/or its Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.

 

ARTICLE VI. 

AFFIRMATIVE COVENANTS

 

So
long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02, 6.03
and 6.11) cause each Subsidiary to:

 

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

 

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

 

47

 

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

 

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

 

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

 

As
to any information contained in materials furnished pursuant to Section
6.02(d), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.

 

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

 

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

 

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

 

48

 

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

 

(d)           promptly after the
same are available, copies of each annual report, proxy or financial statement
or other report or communication sent to the stockholders of the Borrower, and
copies of all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the SEC
under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not
otherwise required to be delivered to the Administrative Agent pursuant hereto;

 

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

 

(f)            promptly, such additional
information regarding the business, financial or corporate affairs of the
Borrower or any Subsidiary, or compliance with the terms of the Loan Documents,
as the Administrative Agent or any Lender may from time to time reasonably
request;

 

(g)           By January 30th of each
year after the occurrence of a Debt Rating Downgrade, an Engineering Report
prepared as of the preceding December 31st by independent petroleum
engineers chosen by Borrower and acceptable to Required Lenders, concerning the
oil and gas reserves of Borrower and its Subsidiaries.  The form of this report shall be
satisfactory to Administrative Agent, shall contain sufficient information to
enable Borrower to meet the reporting requirements concerning oil and gas
reserves contained in Regulations S-K and S-X promulgated by the Securities and
Exchange Commission.  This report shall
distinguish (or shall be delivered together with a certificate from an
appropriate officer of Borrower which distinguishes) those properties treated
in the report which are Collateral from those properties treated in the report
which are not Collateral;

 

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

 

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

 

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

 

49

 

Borrower
deems duplicative, immaterial or inapplicable for delivery to Administrative
Agent and Lenders).

 

Documents
required to be delivered pursuant to Section 6.01(a) or (b) or Section
6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or (ii) on
which such documents are posted on the Borrower’s behalf on
IntraLinks/IntraAgency or another relevant website, if any, including, but not
limited to any filings made on EDGAR to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (i) the
Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Borrower shall notify (which
may be by facsimile or electronic mail) the Administrative Agent and each
Lender of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e., soft copies) of such
documents.  Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the Compliance Certificates required by Section 6.02(b)
to the Administrative Agent and each of the Lenders.  Except for such Compliance Certificates, the Administrative Agent
shall have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

 

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

 

(a)           of the occurrence of
any Default;

 

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

 

(c)           of the occurrence of any ERISA Event;

 

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

 

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

 

50

 

Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto.  Each
notice pursuant to Section 6.03(a) shall describe with particularity any
and all provisions of this Agreement and any other Loan Document that have been
breached.

 

6.04        Payment of Obligations.  Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its properties
or assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

 

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

 

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

 

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

 

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

 

51

 

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

 

6.10        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent on behalf of Lenders to visit and
inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that when an Event of Default exists the Administrative Agent
or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.

 

6.11        Use of Proceeds.  Use
the proceeds of the Credit Extensions for general corporate purposes not in
contravention of any Law or of any Loan Document, including repayment of
Indebtedness under the Existing Credit Agreement.

 

6.12        Guaranties of Borrower’s
Subsidiaries.  Subject to Section 6.13 (b), cause each of the
following Domestic Subsidiaries to, and each such Person who becomes a Domestic
Subsidiary after the date hereof (to the extent such Domestic Subsidiary meets
the criteria set forth in this Section 6.12) to, within thirty (30) days after
becoming a Domestic Subsidiary, execute and deliver to Administrative Agent an
absolute and unconditional guaranty of the timely repayment of the Obligations
of Borrower and the due and punctual performance of the Obligations of
Borrower, which guaranty shall be substantially in the form of Exhibit E:

 

(a)                           Each Domestic
Subsidiary of Borrower which has EBITDA in any fiscal quarter of Borrower which
constitutes ten percent (10%) or more of Borrower’s Consolidated EBITDA for
such fiscal quarter or which has assets at any time with a book value equal to
or exceeding (10%) of the book value of Borrower’s consolidated assets at such
time;

 

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

 

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

 

(d)                           Upon request by the
Administrative Agent on behalf of the Required Lenders, any other Domestic
Subsidiary of Borrower.

 

52

 

6.13        Additional Guarantors and Stock Pledge.

 

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

 

(b)                   No
PUC Subsidiary shall be required to provide a Guaranty pursuant to Section
6.12 or Section 6.13(a) unless regulatory approval shall have been
obtained for such Guaranty from the applicable public utility commission or
FERC having such regulatory authority over such PUC Subsidiary (in this Section
called the applicable “PUC”).  Borrower
shall cause each PUC Subsidiary required to deliver a Guaranty pursuant to Sections
6.12 and 6.13(a) to use its best efforts to obtain the approval of
the applicable PUC for a Guaranty of the Obligations. In the event that the
applicable PUC shall require a Subsidiary to withdraw from the Guaranty, such
Subsidiary may so withdraw and the Administrative Agent shall release such
Subsidiary from the Guaranty; provided that a substitute Subsidiary guarantor
meeting the requirements of Sections 6.12 and 6.13 shall have
executed and delivered the Guaranty unless all such substitute Subsidiaries are
PUC Subsidiaries and are prohibited by the applicable PUC from delivering a
Guaranty.

 

(c)                   No
PUC Subsidiary shall be required to execute and deliver any Security Document
pursuant to Sections 6.13(a) or 6.14 unless regulatory approval
shall have been obtained for such Security Document from the applicable
PUC.  Borrower shall cause each PUC
Subsidiary required to deliver a Security Document pursuant to Sections
6.13(a) and/or Section 6.14 to use its best efforts to obtain the
approval of the applicable PUC for such Security Document, granting to
Administrative Agent, for the benefit of the Lenders, Liens and security
interests in such Collateral as required by Section 6.13(a) and/or Section
6.14 (as applicable) to secure the Obligations. In the event that the
applicable PUC shall require that the equity interests of a PUC Subsidiary be
released from the Lien in favor of the Administrative Agent, the Administrative
Agent shall so release such equity interests; provided that replacement stock
of another Subsidiary acceptable to the Administrative Agent shall have been
pledged to Administrative Agent for the benefit of the Lenders unless all such
substitute Subsidiaries are PUC Subsidiaries and are prohibited by the
applicable PUC from having their equity interests pledged to Administrative
Agent.

 

(d)                   Neither
this Section 6.13, Section 6.14 nor any other provision of any
Loan Document shall require a Guaranty or a Security Document by a PUC
Subsidiary, in either case,

 

53

 

to the extent that such PUC Subsidiary shall not
have obtained the required approval of the applicable PUC after the exercise of
its best efforts in accordance with subsections (b) and (c) of this Section
6.13.

 

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

 

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

 

6.15        Title Review. 
After a Debt Rating Downgrade occurs, and after additional Oil and Gas
Collateral is delivered pursuant to Section 6.14(b), the Borrower agrees
that the Administrative Agent’s counsel shall be entitled to review the lease
files for the Oil and Gas Collateral and existing title reports and title
opinions covering such Oil and Gas Collateral. 
Based upon such review and in order to confirm title of the Borrower and
its Subsidiaries to such Oil and Gas Collateral, the Administrative Agent may
request, and the Borrower agrees to deliver, within ninety (90) days after any
Debt Rating Downgrade, such additional favorable reports and/or title opinions
which Required Lenders determine in their reasonable judgment are necessary
from Persons acceptable to the Administrative Agent with respect to any Oil and
Gas Collateral  as designated by
Administrative Agent to confirm that the Borrower and/or its Subsidiaries own
such Oil and Gas Collateral free and clear of all Liens except Permitted Liens.

 

6.16        Perfection and Protection of Security
Interests and Liens.  Borrower
will from time to time deliver, and will cause each of its Subsidiaries from
time to time to deliver, to Administrative Agent any authorizations to file
financing statements, extension agreements and other documents, properly
completed and executed (and acknowledged when required) in form 

 

54

 

and substance reasonably satisfactory to
Administrative Agent, which Administrative Agent requests for the purpose of
perfecting, confirming, or protecting
any Liens or other rights in Collateral securing any Obligations.

 

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

 

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

 

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

 

55

 

the extent the maximum period is permitted to
be determined by reference to “lives in being,” the Borrower, Administrative
Agent and Lenders hereby  agree that
“lives in being” shall refer to the lifetime of the last to die of the living
lineal descendants of the late Joseph P. Kennedy (father of the late President
of the United States of America).

 

ARTICLE VII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain
unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the
Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:

 

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

 

(a)           Liens
pursuant to any Loan Document;

 

(b)           Liens
existing on the date hereof and listed on Schedule 7.01 and any renewals or
extensions thereof, provided that the property covered thereby is not
increased and any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.03(b);

 

(c)           Liens
for taxes not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;

 

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

 

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

 

(f)            deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

 

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

 

56

 

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

 

(h)           Liens
securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;

 

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

 

(j)            If
the Company and/or any Subsidiary has delivered Mortgages to Administrative
Agent pursuant to Section 6.14, Liens in favor of Prudential Insurance
Company of America.

 

(k)           Liens
on margin accounts established in connection with Swap Contracts permitted
under Section 7.11.

 

7.02        Investments. Make any Investments,
except:

 

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

 

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

 

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

 

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

 

(e)           acquisitions of or investments in gas
processing, treating, fractionation, transmission, gathering and storage
facilities, and domestic oil and gas properties (whether in the United States
or Canada);

 

(f)            loans
made by Borrower to its employees pursuant to the Stock Option Agreements;
provided that the aggregate outstanding amount of all such loans so made shall
not exceed $10,000,000;

 

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

 

(h)           Investments
of the Borrower in any Guarantor and
Investments of any Guarantor in
the Borrower or in another Guarantor;

 

57

 

(i)            Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;

 

(j)            Guarantees
permitted by Section 7.03;

 

(k)           Investments
of the Borrower or any Subsidiary made pursuant to any Swap Contract permitted
under Section 7.11; and

 

(l)            other
Investments not exceeding $5,000,000 in the aggregate in any fiscal year of the
Borrower.

 

7.03        Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness, except (without duplication):

 

(a)           Indebtedness
under the Loan Documents;

 

(b)           Indebtedness
outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;

 

(c)           Guarantees
of the Borrower or any Guarantor
in respect of Indebtedness otherwise permitted hereunder of the Borrower;

 

(d)           Indebtedness
(contingent or otherwise) of the Borrower or any Subsidiary existing or arising
under any Swap Contract permitted under Section [7.11]; provided that
such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;

 

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

 

(f)            unsecured
Indebtedness between Borrower and any Guarantor;

 

(g)           Indebtedness
under the Debt Securities;

 

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

 

58

 

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

 

(j)            unsecured
Indebtedness of the Borrower not described in subsections (a) through (i) above
which meets the following requirements: (A) the documentation evidencing such
Indebtedness shall contain no terms, conditions or defaults (other than
pricing) which are more favorable to the third party creditor than those
contained in this Agreement are to Lenders, as determined by Required Lenders
in their discretion (provided that Required Lenders shall make any such
determination considering any amendments or modifications to this Agreement
existing at the time of the incurrence of such Indebtedness) and shall not
contain any provision which attempts to modify, amend or restrict any of the
rights or remedies of Agent or Lenders hereunder or under any of the other Loan
Documents, (B) such Indebtedness shall have no scheduled principal payments due
prior to the final maturity of the Obligations, (C) at the time the Borrower incurs
such Indebtedness, no Default or Event of Default shall have occurred and be
continuing hereunder and (D) if such Indebtedness is to be guaranteed by any
Affiliate of the Borrower, then such third party lender(s) must enter into an
inter-creditor agreement with Lenders, in form, scope and substance which is
acceptable to Required Lenders, as evidenced by their written consent;

 

(k)           CP
Debt; and

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

7.05        Dispositions. Make any Disposition or
enter into any agreement to make any Disposition, except:

 

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

 

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

 

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

 

(d)           Dispositions
of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary; provided
that if the transferor of such property is a Guarantor, the transferee thereof
must either be the Borrower or a Guarantor;

 

(e)           Dispositions
permitted by Section 7.04;

 

(f)            Dispositions of property by the Borrower and
its Subsidiaries in arms’ length transactions to third parties that are not
Affiliates of the Borrower for consideration (i) solely in property similar to
the property being disposed of and (ii) with a fair market value that is
equivalent to the fair market value of the property being disposed of; and

 

(g)           Dispositions by the Borrower and its
Subsidiaries in arms’ length transactions to third parties that are not
Affiliates of the Borrower and which are not otherwise covered by this Section
7.05 for consideration equal to the fair market value thereof; provided
that (i) at the time of such Disposition, no Default shall exist or would
result from such Disposition and (ii) the aggregate book value of all property
Disposed of in reliance on this clause (f) in any fiscal year shall not exceed
$35,000,000.

 

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

 

(a)           the
Borrower may declare and make dividend payments to its shareholders so long as
no Default or Event of Default exists at the time such dividend is declared or
paid or would occur as a result thereof;

 

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

 

60

 

(c)           the
Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common equity
interests of such Person;

 

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

 

(e)           the
Borrower and each Subsidiary may purchase, redeem or otherwise acquire shares
of its common stock or other common equity interests or warrants or options to
acquire any such shares with the proceeds received from the substantially
concurrent issue of new shares of its common stock or other common equity
interests;

 

(f)            the
Borrower may make Restricted Payments with respect to the Debt Securities so
long as no Default or Event of Default exists at the time thereof or will occur
as a result thereof.

 

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

 

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

 

7.09        Burdensome Agreements.  Enter into
any Contractual Obligation (other than this Agreement, any other Loan Document,
the Contractual Obligations entered into pursuant to the Debt Securities, and
the Indenture) that (a) limits the ability (i) of any Subsidiary to make
Restricted Payments to the Borrower or any Guarantor or to otherwise transfer
property to the Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee
the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to
create, incur, assume or suffer to exist Liens on property of such Person; provided,
however, that this clause (iii) shall not prohibit any negative pledge
incurred or provided in favor of any holder of Indebtedness permitted under Section
7.03(e) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) requires
the grant of a Lien to secure an obligation of such Person if a Lien is granted
to secure another obligation of such Person.

 

7.10        Use of Proceeds. Use the
proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.

 

61

 

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

 

7.12        Financial Covenants.

 

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

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  Minimum

  Fixed Charge Coverage

  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing through December
  31, 2003

  	
   

  	
  3.25 to 1.0

  	
   

  
	
  March 31, 2004 through
  December 31, 2004

  	
   

  	
  3.75 to 1.0

  	
   

  
	
  March 31, 2005 and each
  fiscal quarter thereafter

  	
   

  	
  4.25 to 1.0

  	
   

  

 

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

 

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

ARTICLE VIII. 

EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events of
Default. Any of
the following shall constitute an Event of Default:

 

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

 

(b)           Specific
Covenants.  The Borrower fails to
perform or observe any term, covenant or agreement contained in any of Section
6.03, Sections 6.12 through 6.16 or Article VII; or

 

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

 

62

 

(d)           Representations
and Warranties.  Any representation,
warranty, certification or statement of fact made or deemed made by or on
behalf of the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading when made or deemed made and such
representation or warranty does not become true and correct within thirty (30)
days; or

 

(e)           Cross-Default.

 

(i)                            the Borrower or any
Subsidiary (A) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect
of any of the Debt Securities or the Subordinated Debt, or (B) fails to observe
or perform any other agreement or condition relating to the Debt Securities or
the Subordinated Debt, or any other event occurs, in the instance of both the
circumstances of (i)(A) and (i)(B), the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity; or

 

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

 

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

 

63

 

aggregate
amount of all such payments for which Borrower is obligated under Swap
Contracts at any time exceeds $10,000,000; or

 

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

 

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

 

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

 

(i)            ERISA.  (i) An ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess
of $10,000,000, or (ii) the Borrower or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of $10,000,000; or

 

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

 

64

 

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

 

(l)            Debt
Securities.  Without the express
prior written consent of Required Lenders, the Borrower amends or modifies the
terms of any of the documents or instruments governing, or otherwise executed
in connection with, any of the Debt Securities (including, but not limited to,
an amendment or modification to shorten the maturity of the Debt Securities or
increase the maximum principal amount of the Debt Securities); provided,
however, that without the consent of any Lender, the Borrower may amend such
documents or instruments (1) to increase the interest rate or fees payable
under or with respect to the Debt Securities, (2) to conform to amendments or
modifications made to the Loan Documents, and (3) to make changes in the
administration of the Debt Securities; or

 

(m)          Subordinated
Debt.  Without the express prior
written consent of Required Lenders, the Borrower amends or modifies the terms
of any of the documents or instruments governing, or otherwise executed in
connection with, the Subordinated Debt, including but not limited to, an
amendment or modification to (a) shorten the maturity of the Subordinated
Debt, (b) increase the maximum principal amount of the Subordinated Debt,
or (c) modify the terms of the subordination of the Subordinated Debt to the
Senior Debt; or

 

(n)           Preferred
Stock.  Without the express prior
written consent of Required Lenders, the Borrower amends or modifies any term
of the Preferred Stock.

 

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

 

(a)           declare
the commitment of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

 

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

 

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

 

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

 

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

 

65

 

obligation of the Borrower to Cash
Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent or any
Lender.

 

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

 

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

 

Second, to payment of
that portion of the Obligations constituting fees, indemnities and other
amounts (other than principal and interest) payable to the Lenders (including
Attorney Costs and amounts payable under Article III), ratably among
them in proportion to the amounts described in this clause Second
payable to them;

 

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

 

Fourth, to payment of
that portion of the Obligations constituting unpaid principal of the Loans and
L/C Borrowings, ratably among the Lenders in proportion to the respective
amounts described in this clause Fourth held by them;

 

Fifth, to the
Administrative Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit; and

 

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

 

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

 

ARTICLE IX.  

ADMINISTRATIVE AGENT

 

9.01        Appointment and Authorization of
Administrative Agent.

 

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(a)           Each
Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document (including, without limitation, as a
secured party under any Security Document), together with such powers as are
reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere herein
or in any other Loan Document, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Administrative 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 Loan Document or otherwise exist against the
Administrative Agent.  Without limiting
the generality of the foregoing sentence, the use of the term “agent” herein
and in the other Loan Documents with reference to the Administrative 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.

 

(b)           The
L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer
shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken
or omissions suffered by the L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in this Article IX and in the definition
of “Agent-Related Person” included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.

 

9.02        Delegation of Duties. The
Administrative Agent may execute any of its duties under this Agreement or any
other Loan 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 Administrative 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.

 

9.03        Liability of Administrative Agent. No
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 other
Loan Document or the transactions contemplated hereby (in all cases, whether or
not arising, in whole or in part, out of the negligence of such Agent-Related
Person, 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 any Loan Party or any officer thereof, contained herein or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document, or for any failure of

 

67

 

any Loan Party or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any
obligation to 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 other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.

 

9.04        Reliance by Administrative Agent. 

 

(a)           The
Administrative 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 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 any Loan Party), independent
accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Loan Document
unless it shall first receive such advice or concurrence of the Required
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 Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required 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.

 

(b)           For
purposes of determining compliance with the conditions specified in Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

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

 

68

 

9.06        Credit Decision; Disclosure of
Information by Administrative Agent. Each Lender acknowledges
that no Agent-Related Person has made any representation or warranty to it, and
that no act by the Administrative Agent hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of any Loan Party
or any Affiliate thereof, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender as to any matter, including
whether Agent-Related Persons have disclosed material information in their possession.  Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon any 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 Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. 
Each Lender also represents that it will, independently and without
reliance upon any 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 Loan 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
Borrower.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative 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 Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.

 

4.07        Indemnification of Administrative
Agent. Whether or not the transactions contemplated hereby
are consummated, the Lenders shall indemnify upon demand each Agent-Related
Person (to the extent not reimbursed by or on behalf of any Loan Party and
without limiting the obligation of any Loan Party to do so), pro rata, and hold
harmless each Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it, including any Indemnified Liabilities in all cases, whether or not caused by or arising, in
whole or in part, out of the negligence of the Indemnitee; provided,
however, that no Lender shall be liable for the payment to any
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 Agent-Related Person’s own gross
negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required 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 Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of the Borrower.  The
undertaking in this Section

 

69

 

shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.

 

9.08        Administrative Agent in its Individual
Capacity. 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 each of the Loan
Parties and their respective Affiliates as though Bank of America were not the
Administrative Agent or the L/C Issuer 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 any Loan Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Loan Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information
to them.  With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms “Lender” and
“Lenders” include Bank of America in its individual capacity.

 

9.09        Successor Administrative Agent. The
Administrative Agent may resign as Administrative Agent upon 30 days’ notice to
the Lenders; provided that any such resignation by Bank of America shall also
constitute its resignation as L/C Issuer. 
If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of
Default (which consent of the Borrower shall not be unreasonably withheld or
delayed).  If no successor
administrative agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Lenders and the Borrower, a successor administrative
agent from among the Lenders.  Upon the
acceptance of its appointment as successor administrative agent hereunder, the
Person acting as such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and L/C Issuer
and the respective terms “Administrative Agent” and “L/C Issuer” shall mean
such successor administrative agent, Letter of Credit issuer and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent
shall be terminated and the retiring L/C Issuer’s rights, powers and duties as
such shall be terminated, without any other or further act or deed on the part
of such retiring L/C Issuer or any other Lender, other than the obligation of
the successor L/C Issuer to issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or to
make other arrangements satisfactory to the retiring L/C Issuer to effectively
assume the obligations of the retiring L/C Issuer with respect to such Letters
of Credit.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article IX and Sections 10.04 and 10.05
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.  If no successor administrative agent has
accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.

 

70

 

9.10        Administrative Agent May File Proofs of
Claim. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether the Administrative Agent shall have
made any demand on the Borrower) shall be entitled and empowered, by intervention
in such proceeding or otherwise

 

(a)         to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
L/C Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders
and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders and the Administrative Agent under Sections
2.03(i) and (j), 2.08 and 10.04) allowed in such
judicial proceeding; and

 

(b)         to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute the
same;

 

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

 

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

 

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

 

(a)           to release any Lien on any property
granted to or held by the Administrative Agent under any Loan Document (i) upon
termination of the Aggregate Commitments and payment in full of all Obligations
(other than contingent indemnification obligations) and the expiration or
termination of all Letters of Credit, (ii) that is part of a Disposition
of property permitted hereunder or under any other Loan Document or is
permitted to be released under Section 6.13, or (iii) subject to Section
10.01, if approved, authorized or ratified in writing by the Required
Lenders;

 

71

 

(b)           to subordinate any
Lien on any property granted to or held by the Administrative Agent under any
Loan Document to the holder of any Lien on such property that is permitted by Section
7.01(i); and

 

(c)           to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder or ceases to be a Guarantor as provided under Section
6.13.

 

Upon request by the Administrative Agent at
any time, the Required Lenders will confirm in writing the Administrative
Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.11.

 

9.12        Other Agents; Arrangers and Managers. None of the
Lenders or other Persons identified on the facing page or signature pages of
this Agreement as a “syndication agent,” “documentation agent,” “co-agent,”
“book manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger”
shall have any right, power, obligation, liability, responsibility or duty
under this Agreement other than, in the case of such Lenders, those applicable
to all Lenders as such.  Without
limiting the foregoing, none of the Lenders or other Persons so identified
shall have or be deemed to have any fiduciary relationship with any
Lender.  Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders or other Persons so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

 

ARTICLE X.  

MISCELLANEOUS

 

10.01      Amendments,
Etc. No amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower or any other Loan Party therefrom, shall
be effective unless in writing signed by the Required Lenders and the Borrower
or the applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, 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 no such amendment, waiver or consent shall:

 

(a)           waive
any condition set forth in Section 4.01(a) or (b) without the written
consent of each Lender;

 

(b)           extend
or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such
Lender;

 

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

 

72

 

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

 

(e)           change
Section 2.12 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;

 

(f)            change
any provision of this Section or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

 

(g)           release any Guarantor from the Guaranty
without the written consent of each Lender unless authorized by Section 6.13
or Section 9.11(c) or required by any applicable PUC or FERC; or

 

(h)           release any Collateral from any Security
Document without the written consent of each Lender unless authorized such
release is authorized by Section 6.13 or Section 9.11(a) or
required by any applicable PUC or FERC.

 

and, provided  further, that (i)
no amendment, waiver or consent shall, unless in writing and signed by the L/C
Issuer in addition to the Lenders required above, affect the rights or duties
of the L/C Issuer under this Agreement or any Letter of Credit Application
relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender.

 

10.02      Notices and Other Communications;
Facsimile Copies. 

 

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

 

73

 

communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

 

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

 

(ii)                           if to any other
Lender, to the address, facsimile number, electronic mail address or telephone
number specified in its Administrative Questionnaire or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower, the Administrative Agent
and the L/C Issuer.

 

All such notices and other communications
shall be deemed to be given or made upon the earlier to occur of (i) actual
receipt by the relevant party hereto and (ii) (A) if delivered by hand or by
courier, when signed for by or on behalf of the relevant party hereto; (B) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been
confirmed by telephone; and (D) if delivered by electronic mail (which form of
delivery is subject to the provisions of subsection (c) below), when delivered;
provided, however, that notices and other communications to the
Administrative Agent and the L/C Issuer pursuant to Article II shall not
be effective until actually received by such Person.  In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.

 

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

 

(c)           Limited
Use of Electronic Mail.  Electronic
mail and Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as provided
in Section 6.02, and to distribute Loan Documents for execution by the
parties thereto, and may not be used for any other purpose.

 

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

 

74

 

liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the
Borrower.  All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

10.03      No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent
to exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

 

10.04      Attorney
Costs, Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all reasonable costs and expenses incurred in connection with the
development, preparation, negotiation and execution of this Agreement and the
other Loan Documents and any amendment, waiver, consent or other modification
of the provisions hereof and thereof (whether or not the transactions
contemplated hereby or thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including
all Attorney Costs, and (b) to pay or reimburse the Administrative Agent and
each Lender for all reasonable costs and expenses incurred in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or the other Loan Documents (including all such costs
and expenses incurred during any “workout” or restructuring in respect of the
Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all Attorney Costs.  The foregoing costs and expenses shall include all reasonable
search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by the
Administrative Agent and the reasonable cost of independent public accountants
and other outside experts retained by the Administrative Agent or any
Lender.  All amounts due under this Section
10.04 shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall survive
the termination of the Aggregate Commitments and repayment of all other
Obligations.

 

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

 

75

 

connection with such demand do not strictly
comply with the terms of such Letter of Credit), (c) any actual or alleged presence or
release of Hazardous Materials on or from any property currently or formerly
owned or operated by the Borrower, any Subsidiary or any other Loan Party, or
any Environmental Liability related in any way to the Borrower, any Subsidiary
or any other Loan Party, or (d) 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) and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”), in all cases, whether or not caused
by or arising, in whole or in part, out of the negligence of the Indemnitee;  provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee.  No Indemnitee shall be liable for any
damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems
in connection with this Agreement, nor shall any Indemnitee have any liability
for any indirect or consequential damages relating to this Agreement or any
other Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date).  All amounts due under this Section 10.05 shall be payable
within ten Business Days after demand therefor.  The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

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

10.07      Successors and Assigns.

 

(a)           The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender and
no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the

 

76

 

provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection
(d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

(b)           Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations) at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund (as defined in subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date” is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned; (iii) any assignment of a Commitment must
be approved by the Administrative Agent and the L/C Issuer unless the Person
that is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500.  Subject to acceptance and recording
thereof by the Administrative Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date
of such assignment).  Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

77

 

(c)           The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register
shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

 

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

 

(e)           A
Participant shall not be entitled to receive any greater payment under Section
3.01 or 3.04 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 10.15 as though it were
a Lender.

 

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

 

78

 

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

 

(g)           As
used herein, the following terms have the following meanings:

 

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

 

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

 

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

 

10.08      Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent requested by any regulatory authority; (c) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process; (d) to any
other party to this Agreement; (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder; (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any Eligible Assignee of or Participant in, or any prospective Eligible
Assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty’s or prospective
counterparty’s professional advisor) to any credit derivative transaction
relating to obligations of the Loan Parties; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower; or (i) to the National Association of
Insurance Commissioners or any other similar organization.  In addition, the Administrative Agent and
the Lenders may disclose the existence of this Agreement and information about
this Agreement to market data collectors, similar service providers to the
lending industry, and service providers to the Administrative Agent and the
Lenders in connection with the administration and management of this Agreement,
the other Loan

 

79

 

Documents, the Commitments, and the Credit
Extensions.  For the purposes of this
Section, “Information” means all information received from any Loan
Party relating to any Loan Party or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by any Loan Party; provided
that, in the case of information received in writing from a Loan Party after the
date hereof, such information is clearly identified in writing at the time of
delivery as confidential.  Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. 
Notwithstanding anything herein to the contrary, “Information” shall not
include, and the Administrative Agent and each Lender may disclose without
limitation of any kind, any information with respect to the “tax treatment” and
“tax structure” (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to the
Administrative Agent or such Lender relating to such tax treatment and tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans, Letters of Credit and transactions
contemplated hereby.

 

10.09      Set-off.
In addition to any
rights and remedies of the Lenders provided by law, upon the occurrence and
during the continuance of any Event of Default, each Lender is authorized at
any time and from time to time, without prior notice to the Borrower or any
other Loan Party, any such notice being waived by the Borrower (on its own
behalf and on behalf of each Loan Party) to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at
any time owing by, such Lender to or for the credit or the account of the
respective Loan Parties against any and all Obligations owing to such Lender
hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or indebtedness.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.

 

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

 

80

 

may be lawfully charged under applicable law
from time to time in effect, and the provisions of this section shall control
over all other provisions of the Loan Documents which may be in conflict or
apparent conflict herewith.  Agent, LC
Issuer and Lenders expressly disavow any intention to charge or collect
excessive unearned interest or finance charges in the event the maturity of any
Obligation is accelerated.  If
(a) the maturity of any Obligation is accelerated for any reason,
(b) any Obligation is prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum, or
(c) Agent, LC Issuer or any Lender or any other holder of any or all of
the Obligations shall otherwise collect moneys which are determined to
constitute interest which would otherwise increase the interest on any or all
of the Obligations to an amount in excess of that permitted to be charged by
applicable law then in effect, then all sums determined to constitute interest
in excess of such legal limit shall, without penalty, be promptly applied to
reduce the then outstanding principal of the related Obligations or, at
Agent’s, LC Issuer’s or such Lender’s or holder’s option, promptly returned to
the Borrower or the other payor thereof upon such determination.  In determining whether or not the interest
paid or payable, under any specific circumstance, exceeds the maximum amount
permitted under applicable law, Agent, LC Issuer, Lenders and the Related
Persons (and any other payors thereof) shall to the greatest extent permitted
under applicable law, (i) characterize any non-principal payment as an
expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate,
allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum legal
rate of interest from time to time in effect under applicable law in order to
lawfully charge the maximum amount of interest permitted under applicable
law.  In the event applicable law
provides for an interest ceiling under Chapter 303 of the Texas Finance Code, as
amended, for that day, the ceiling shall be the “weekly ceiling” as defined in
the Texas Finance Code, provided that if any applicable law permits greater
interest, the law permitting the greatest interest shall apply and shall be
used when appropriate in determining the Highest Lawful Rate.  As used in this section the term “applicable
law” means the laws of the State of Texas or the laws of the United States of
America, whichever laws allow the greater interest, as such laws now exist or
may be changed or amended or come into effect in the future.

 

10.11      Counterparts.
  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement may be duly executed by
facsimile or other electronic transmission.

 

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

 

81

 

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

 

10.14      Severability.
If any provision of
this Agreement or the other Loan Documents is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be affected
or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

10.15      Tax
Forms. (a)  (i) 
Each Lender that is not a “United States person” within the meaning of
Section 7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to
the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the
Code.  Thereafter and from time to time,
each such Foreign Lender shall (A) promptly submit to the Administrative Agent
such additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to
the Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.

 

82

 

(ii)           Each
Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Lender
under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the Administrative Agent on the
date when such Foreign Lender ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable
exercise of its discretion), (A) two duly signed completed copies of the forms
or statements required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S. withholding
tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successor
thereto), together with any information such Lender chooses to transmit with
such form, and any other certificate or statement of exemption required under
the Code, to establish that such Lender is not acting for its own account with
respect to a portion of any such sums payable to such Lender.

 

(iii)          The
Borrower shall not be required to pay any additional amount to any Foreign
Lender under Section 3.01 (A) with respect to any Taxes required to be
deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this Section 10.15(a) or (B) if such Lender shall have failed to
satisfy the foregoing provisions of this Section 10.15(a); provided
that if such Lender shall have satisfied the requirement of this Section
10.15(a) on the date such Lender became a Lender or ceased to act for its
own account with respect to any payment under any of the Loan Documents,
nothing in this Section 10.15(a) shall relieve the Borrower of its
obligation to pay any amounts pursuant to Section 3.01 in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation, administration
or application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the
fact that such Lender or other Person for the account of which such Lender
receives any sums payable under any of the Loan Documents is not subject to
withholding or is subject to withholding at a reduced rate.

 

(iv)          The
Administrative Agent may, without reduction, withhold any Taxes required to be
deducted and withheld from any payment under any of the Loan Documents with respect
to which the Borrower is not required to pay additional amounts under this Section
10.15(a).

 

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

 

(c)           If
any Governmental Authority asserts that the Administrative Agent did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs

 

83

 

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

 

10.16      Replacement of Lenders; Replacement of
Rating Agency.  Under any circumstances set forth herein providing
that the Borrower shall have the right to replace a Lender as a party to this
Agreement, the Borrower may, upon notice to such Lender and the Administrative
Agent, replace such Lender by causing such Lender to assign its Commitment
(with the assignment fee to be paid by the Borrower in such instance) pursuant
to Section 10.07(b) to one or more other Lenders or Eligible Assignees
procured by the Borrower; provided, however, that if the Borrower
elects to exercise such right with respect to any Lender pursuant to Section
3.06(b), it shall be obligated to replace all Lenders that have made similar
requests for compensation pursuant to Section 3.01 or 3.04.  The Borrower shall (x) pay in full all
principal, interest, fees and other amounts owing to such Lender through the
date of replacement (including any amounts payable pursuant to Section 3.05),
(y) provide appropriate assurances and indemnities (which may include letters
of credit) to the L/C Issuer as it may reasonably require with respect to any
continuing obligation to fund participation interests in any L/C Obligations
then outstanding, and (z) release such Lender from its obligations under the
Loan Documents.  Any Lender being
replaced shall execute and deliver an Assignment and Assumption with respect to
such Lender’s Commitment and outstanding Loans and participations in L/C
Obligations.

 

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

 

10.17      Governing Law.

 

(a)           THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH
LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS
OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND

 

84

 

DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE BORROWER, THE ADMINISTRATIVE AGENT AND
EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. 
THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

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

 

10.18      Waiver
of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

 

10.19      ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

10.20      Restatement.This
Agreement restates and amends the Existing Credit Agreement in its entirety,
and all of the terms and  provisions
hereof shall supersede the terms and provisions thereof.

 

[The remainder of this page is intentionally left
blank.]

 

85

 

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

 

	
   

  	
  WESTERN
  GAS RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President
  and Chief

  Financial Officer

  

 

86

 

	
   

  	
  BANK OF
  AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Stein

  	
   

  
	
   

  	
  Name:

  	
  Richard L. Stein

  	
   

  
	
   

  	
  Title:

  	
  Principal

  	
   

  
						

 

87

 

	
   

  	
  BANK OF
  AMERICA, N.A.,

  	
   

  
	
   

  	
  as a Lender and L/C Issuer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Stein

  	
   

  
	
   

  	
  Name:

  	
  Richard L. Stein

  	
   

  
	
   

  	
  Title:

  	
  Principal

  	
   

  
							

 

88

 

	
   

  	
  BANK OF
  OKLAHOMA, N.A.,  as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas M. Foncannon

  	
   

  
	
   

  	
  Name:

  	
  Thomas M. Foncannon

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
						

 

89

 

	
   

  	
  BANK ONE,
  NA, as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tom K. Martin

  	
   

  
	
   

  	
  Name:

  	
  Tom K. Martin

  	
   

  
	
   

  	
  Title:

  	
  Associate Director

  	
   

  
						

 

90

 

	
   

  	
  BNP
  PARIBAS, as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Onischuk

  	
   

  
	
   

  	
  Name:

  	
  J. Onischuk

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
					

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Greg Smothers

  	
   

  
	
   

  	
  Name:

  	
    Greg Smothers

  	
   

  
	
   

  	
  Title:

  	
    Vice President

  	
   

  
					

 

91

 

	
   

  	
  COMERICA
  BANK - TEXAS, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas G. Rajan

  	
   

  
	
   

  	
  Name:

  	
  Thomas G. Rajan

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

92

 

	
   

  	
  FLEET
  NATIONAL BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Holmgren

  	
   

  
	
   

  	
  Name:

  	
  Christopher Holmgren

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
					

 

93

 

	
   

  	
  THE ROYAL
  BANK OF SCOTLAND plc, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew J. Main

  	
   

  
	
   

  	
  Name:

  	
  Matthew J. Main

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
					

 

94

 

	
   

  	
  UNION
  BANK OF CALIFORNIA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly Coil

  	
   

  
	
   

  	
  Name:

  	
  Kimberly Coil

  	
   

  
	
   

  	
  Title:

  	
  Banking Officer

  	
   

  
					

 

	
   

  	
  By:

  	
  /s/ Ali Ahmed

  	
   

  
	
   

  	
  Name:

  	
  Ali Ahmed

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

95

 

	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathryn A. Gaiter

  	
   

  
	
   

  	
  Name:

  	
  Kathryn A. Gaiter

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

96

 

	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Trinder

  	
   

  
	
   

  	
  Name:

  	
  Philip Trinder

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

97

 

	
   

  	
  WELLS
  FARGO BANK, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd Stornetta

  	
   

  
	
   

  	
  Name:

  	
  Todd Stornetta

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
					

 

98Exhibit 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

 

4

 

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.

 

5

 

“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

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