Document:

Exhibit 10.2

 

[EXECUTION]

 

CONTINUING GUARANTY

 

THIS GUARANTY (this “Guaranty”) is made as of June 29, 2004, by
the undersigned guarantor (whether one or more “Guarantor”, and if more
than one jointly and severally), in favor of BANK OF AMERICA, N.A., as administrative
agent for the Lenders under the Credit Agreement as defined below (in such
capacity, “Agent”).

 

FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged,
and in consideration of any credit and/or financial accommodation heretofore or
hereafter from time to time made or granted to WESTERN GAS RESOURCES, INC. (the
“Borrower”) by Lenders and any other subsidiaries or affiliates of
Lenders and their successors and assigns, pursuant to the Credit Agreement the
undersigned hereby furnishes its guaranty of the Guaranteed Obligations (as
hereinafter defined) as follows:

 

1.                                      Guaranty.  The Guarantor hereby absolutely and
unconditionally guarantees, as a guarantee of payment and not merely as a
guarantee of collection, prompt payment when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter, of any and all
existing and future indebtedness and liabilities of every kind, nature and
character, direct or indirect, absolute or contingent, liquidated or unliquidated,
voluntary or involuntary, of the Borrower to (i) the Agent and the Lenders
arising under that certain Amended and Restated Credit Agreement of even date
herewith between the Borrower, Agent and the Lenders (the “Credit Agreement”;
terms used and not defined herein shall have the meaning given them in the
Credit Agreement) and all instruments, agreements and other documents of every
kind and nature now or hereafter executed in connection with the Credit
Agreement (including all renewals, extensions and modifications thereof and all
reasonable costs, attorneys’ fees and expenses incurred by the Agent or any
Lender in connection with the collection or enforcement thereof owed pursuant
to the Loan Documents) and (ii) any Lender or any Affiliate of any Lender
arising under any Swap Contract between Borrower or any Affiliate of Borrower
and any Lender or any Affiliate of any Lender (collectively, the “Guaranteed
Obligations”) absent manifest error. 
The Lenders’ books and records showing the amount of the Guaranteed
Obligations shall be admissible in evidence in any action or proceeding, and
shall be binding upon the Guarantor and conclusive for the purpose of
establishing the amount of the Guaranteed Obligations.  This Guaranty shall not be affected by the genuineness,
validity, regularity or enforceability of the Guaranteed Obligations or any
instrument or agreement evidencing any Guaranteed Obligations, or by the
existence, validity, enforceability, perfection, or extent of any collateral
therefor, or by any fact or circumstance relating to the Guaranteed Obligations
which might otherwise constitute a defense to the obligations of the Guarantor
under this Guaranty.  Each of the
undersigned hereby agrees that its obligations hereunder shall be limited to an
aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the
Bankruptcy Code (Title 11, United States Code) or any comparable provisions of
any applicable state law.

 

2.                                      No
Setoff or Deductions; Taxes. The Guarantor represents and warrants that it
is incorporated/organized and resident in the United States of America. All
payments by the Guarantor hereunder shall be paid in full, without setoff or
counterclaim or any deduction or withholding whatsoever, including, without
limitation, for any and all present and future taxes. If the Guarantor must
make a payment under this Guaranty, the Guarantor represents and warrants that
it will make the payment

 

 

from one of its U.S. resident offices to the Agent, for the benefit of
the Lenders, so that no withholding tax is imposed on the payment.  If notwithstanding the foregoing, the
Guarantor makes a payment under this Guaranty to which foreign withholding tax
applies, or any taxes (other than taxes on net income (a) imposed by the
country or any subdivision of the country in which any Lender’s principal
office or actual lending office is located and (b) measured by the United
States taxable income such Lender would have received if all payments under or
in respect of this Guaranty were exempt from taxes levied by the Guarantor’s
country) are at any time imposed on any payments under or in respect of this
Guaranty including, but not limited to, payments made pursuant to this
Paragraph 2, the Guarantor shall pay all such taxes to the relevant authority
in accordance with applicable law such that such Lender receives the sum it
would have received had no such deduction or withholding been made and shall
also pay to such Lender, on demand, all additional amounts which such Lender
specifies as necessary to preserve the after-tax yield such Lender would have
received if such taxes had not been imposed.

 

The Guarantor shall promptly provide Agent and any such Lender with an
original receipt or certified copy issued by the relevant authority evidencing
the payment of any such amount required to be deducted or withheld.

 

3.                                      No
Termination.  This Guaranty is a
continuing and irrevocable guaranty of all Guaranteed Obligations now or
hereafter existing and shall remain in full force and effect until all
Guaranteed Obligations and any other amounts payable under this Guaranty are
indefeasibly paid and performed in full and any commitments of the Agent and
the Lenders or facilities provided by the Lenders with respect to the
Guaranteed Obligations are terminated. 
At the Agent’s option, all payments under this Guaranty shall be made to
an office of the Agent located in the United States and in U.S. Dollars.

 

4.                                      Waiver
of Notices.  The Guarantor waives
notice of the acceptance of this Guaranty and of the extension or continuation
of the Guaranteed Obligations or any part thereof.  Guarantor further waives presentment, protest, notice, dishonor
or default, demand for payment and any other notices to which the Guarantor
might otherwise be entitled.

 

5.                                      Subrogation.  The Guarantor shall exercise no right of
subrogation, contribution or similar rights with respect to any payments it
makes under this Guaranty until all of the Guaranteed Obligations and any
amounts payable under this Guaranty are indefeasibly paid and performed in full
and any commitments of the Agent and the Lenders or facilities provided by the
Lenders with respect to the Guaranteed Obligations are terminated.  If any amounts are paid to the Guarantor in
violation of the foregoing limitation, then such amounts shall be held in trust
for the benefit of the Agent and shall forthwith be paid to the Agent to reduce
the amount of the Guaranteed Obligations, whether matured or unmatured.

 

6.                                      Waiver
of Suretyship Defenses.  The
Guarantor agrees that the Agent and/or the Lenders may, at any time and from
time to time, and without notice to the Guarantor, make any agreement with the
Borrower or with any other person or entity liable on any of the Guaranteed Obligations
or providing collateral as security for the Guaranteed Obligations, for the
extension, renewal, payment, compromise, discharge or release of the Guaranteed
Obligations or any collateral (in whole or in part), or for any modification or
amendment of the terms thereof or of any instrument or agreement evidencing the
Guaranteed Obligations or the provision of collateral, all without in any way
impairing, releasing, discharging or otherwise affecting the obligations of the
Guarantor under this Guaranty.  The
Guarantor waives any defense arising by reason of any disability or other
defense of the Borrower or any other guarantor, or the cessation from any cause
whatsoever of the liability of the Borrower, or any claim that the Guarantor’s
obligations exceed or are more burdensome than those of the Borrower and waives

 

2

 

the benefit of any statute of limitations affecting the liability of
the Guarantor hereunder.  The Guarantor
waives any right to enforce any remedy which the Agent and/or the Lenders now
have or may hereafter have against the Borrower and waives any benefit of and
any right to participate in any security now or hereafter held by the Agent
and/or the Lenders.  Further, the
Guarantor consents to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of the Guarantor under this
Guaranty or which, but for this provision, might operate as a discharge of the
Guarantor.

 

7.                                      Exhaustion
of Other Remedies Not Required.  The
obligations of the Guarantor hereunder are those of primary obligor, and not
merely as surety, and are independent of the Guaranteed Obligations.  The Guarantor waives diligence by the Agent
and the Lenders and action on delinquency in respect of the Guaranteed
Obligations or any part thereof, including, without limitation any provisions
of law requiring the Agent and/or the Lenders to exhaust any right or remedy or
to take any action against the Borrower, any other guarantor or any other
person, entity or property before enforcing this Guaranty against the
Guarantor, including but not limited to the benefits of Sections 34.02 and
34.03 of the Texas Business and Commerce Code, §17.001 of the Texas Civil
Practice and Remedies Code, and Rule 31 of the Texas Rules of Civil Procedure,
or any similar statute.

 

8.                                      Reinstatement.  Notwithstanding anything in this Guaranty to
the contrary, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any portion of the Guaranteed
Obligations is revoked, terminated, rescinded or reduced or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrower or any other person or entity or otherwise, as if such payment had not
been made and whether or not the Agent or any Lender is in possession of or has
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.

 

9.                                      Subordination.  The Guarantor hereby subordinates the payment
of all obligations and indebtedness of the Borrower owing to the Guarantor,
whether now existing or hereafter arising, including but not limited to any
obligation of the Borrower to the Guarantor as subrogee of the Agent and the
Lenders or resulting from the Guarantor’s performance under this Guaranty, to
the indefeasible payment in full of all Guaranteed Obligations. If any Event of
Default as defined in the Credit Agreement shall have occurred and be
continuing and the Agent so requests, any such obligation or indebtedness of
the Borrower to the Guarantor shall be enforced and performance received by the
Guarantor as trustee for the Agent and the proceeds thereof shall be paid over
to the Agent, for the benefit of the Lenders, on account of the Guaranteed
Obligations, but without reducing or affecting in any manner the liability of
the Guarantor under this Guaranty.

 

10.                               Information.  The Guarantor agrees to furnish promptly to
the Agent any and all financial or other information regarding the Guarantor or
its property as the Agent may reasonably request in writing.

 

11.                               Stay
of Acceleration.  In the event that
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed, upon the insolvency, bankruptcy or reorganization of the Borrower or
any other person or entity, or otherwise, all such amounts shall nonetheless be
payable by the Guarantor immediately upon demand by the Agent.

 

12.                               Expenses.  The Guarantor shall pay on demand all
reasonable out-of-pocket expenses (including reasonable attorneys’ fees and
expenses) in any way relating to the enforcement or protection of the Agent’s
and the Lenders’ rights under this Guaranty, including any incurred in the
preservation, protection or enforcement of any rights of the Agent and the
Lenders in any case commenced by or against the Guarantor under the Bankruptcy
Code (Title 11, United States Code) or any similar or

 

3

 

successor statute.  The
obligations of the Guarantor under the preceding sentence shall survive
termination of this Guaranty.

 

13.                               Amendments.  No provision of this Guaranty may be waived,
amended, supplemented or modified, except by a written instrument executed by
the Agent (with the consent of Lenders as required under the Credit Agreement)
and the Guarantor.

 

14.                               No
Waiver; Enforceability.  No failure
by the Agent or any Lender to exercise, and no delay in exercising, any right,
remedy or power hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy or power hereunder preclude any
other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity.  The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein.

 

15.                               Assignment;
Governing Laws; Jurisdiction.  This
Guaranty shall (a) bind the Guarantor and its successors and assigns, provided
that the Guarantor may not assign its rights or obligations under this Guaranty
without the prior written consent of the Agent and the Lenders as provided in
and in accordance with the Credit Agreement (and any attempted assignment
without such consent shall be void), (b) inure to the benefit of the Agent and
the Lenders and their successors and assigns and the Agent and Lenders may, as
provided in and in accordance with the Credit Agreement and without affecting
the Guarantor’s obligations hereunder, assign or sell participations in the
Guaranteed Obligations and this Guaranty, in whole or in part, and (c) be
governed by the internal laws of the State of Texas.  The Guarantor hereby irrevocably (i) submits to the non-exclusive
jurisdiction of any United States Federal or State court sitting in Dallas,
Texas in any action or proceeding arising out of or relating to this Guaranty,
and (ii) waives to the fullest extent permitted by law any defense asserting an
inconvenient forum in connection therewith. 
Service of process by the Agent in connection with such action or
proceeding shall be binding on the Guarantor if sent to the Guarantor by
registered or certified mail at its address specified below.  The Guarantor agrees that the Agent and the
Lenders may disclose to any prospective purchaser and any purchaser of all or
part of the Guaranteed Obligations any and all information in the Agent’s and
Lenders’ possession concerning the Guarantor, this Guaranty and any security
for this Guaranty.

 

16.                               Condition
of the Borrower.  The Guarantor
acknowledges and agrees that it has the sole responsibility for, and has
adequate means of, obtaining from the Borrower such information concerning the
financial condition, business and operations of the Borrower as the Guarantor
requires, and that the Agent and the Lenders have no duty, and the Guarantor is
not relying on the Agent or any Lender at any time, to disclose to the
Guarantor any information relating to the business, operations or financial
condition of the Borrower.

 

17.                               Setoff.  If and to the extent any payment is not made
when due hereunder, the Lenders may setoff and charge from time to time any
amount so due against any or all of the Guarantor’s accounts or deposits with
the Lenders.

 

18.                               Other
Guarantees.  Except as set forth in
paragraph 21, this Guaranty is not intended to supersede or otherwise affect
any other guaranty now or hereafter given by the Guarantor in favor of Agent,
for the benefit of the Lenders, or any term or provision thereof.

 

19.                               Representations
and Warranties.  The Guarantor
represents and warrants that (i) it is duly organized and in good standing
under the laws of the jurisdiction of its organization and has full capacity
and right to make and perform this Guaranty, and all necessary authority has
been obtained; (ii)

 

4

 

this Guaranty constitutes its legal, valid and binding obligation
enforceable in accordance with its terms; (iii) the making and performance of
this Guaranty does not violate the provisions of any applicable law, regulation
or order, and does not and will not result in the breach of, or constitute a
default or require any consent under, any material agreement, instrument, or
document to which it is a party or by which it or any of its property is bound
or affected, except as could not reasonably be expected to have a Material
Adverse Effect; (iv) all consents, approvals, licenses and authorizations of,
and filings and registrations with, any governmental authority required under
applicable law and regulations for the making and performance of this Guaranty
have been obtained or made and are in full force and effect; (v) by virtue of
its relationship with the Borrower, the execution, delivery and performance of
this Guaranty is for the direct benefit of the Guarantor and it has received
adequate consideration for this Guaranty; and (vi) the financial information,
that has been delivered to the Agent and the Lenders by or on behalf of the
Guarantor, is complete and correct in all material respects and accurately
presents the financial condition and the operational results of the Guarantor
and since the date of the most recent financial statements delivered to the
Agent, there has been no material adverse change in the financial condition or
operational results of the Guarantor.

 

20.                               WAIVER
OF JURY TRIAL; FINAL AGREEMENT.  TO
THE EXTENT ALLOWED BY APPLICABLE LAW, THE PARTIES HERETO EACH WAIVE TRIAL BY
JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF
THIS GUARANTY.  THIS GUARANTY REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

 

21.                               AMENDMENT
AND RESTATEMENT.  This Guaranty restates and amends in its entirety (i)
that certain Guaranty dated as of April 24, 2003, executed by MIGC, Inc.,
Western Gas Resources-Texas, Inc., MGTC, Inc., Mountain Gas Resources, Inc.,
Lance Oil & Gas Company, Inc., and Western Gas Wyoming, L.L.C., in favor of
Agent, and all of the terms and provisions hereof shall supersede the terms and
provisions thereof.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY
LEFT BLANK.]

 

5

 

Executed as of the date first written.

 

 

	
   

  	
  MIGC, INC.

  
	
   

  	
  WESTERN GAS RESOURCES - TEXAS, INC.

  
	
   

  	
  MGTC, INC.

  
	
   

  	
  MOUNTAIN GAS RESOURCES, INC.

  
	
   

  	
  LANCE OIL & GAS COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  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
  of each Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address of each Guarantor:

  
	
   

  	
   

  
	
   

  	
  1099 18th Street, Suite 1200

  
	
   

  	
  Denver, CO 80202

  

 

 

	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard L. Stein

  	
   

  
	
   

  	
   

  	
  Name:
  Richard L. Stein

  
	
   

  	
   

  	
  Title:
  PrincipalExhibit 10.3

 

[EXECUTION]

[WGR Pledge Agreement]

 

AMENDED AND RESTATED PLEDGE AGREEMENT

 

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

 

RECITALS:

 

1.                                       Debtor and Bank of America, N.A., as
Administrative Agent, and certain financial institutions (collectively, the “Lenders”)
who from time to time are parties to that certain Amended and Restated Credit
Agreement of even date herewith (as from time to time amended, supplemented, or
restated, the “Credit Agreement”) pursuant to which Debtor has executed
in favor of each Lender a promissory note (such promissory notes, as from time
to time supplemented or amended and all promissory notes given in renewal and
extension thereof are collectively referred to herein as the “Notes”).

 

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

 

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

 

[4.                                   Debtor has executed in favor of Prudential that
certain Pledge Agreement dated as of April 24, 2003 (such agreement, as
from time to time amended, referred to herein as the “Prudential Pledge
Agreement”), pursuant to which Debtor has granted to Prudential a security
interest in the Collateral.]

 

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

 

 

6.                                       The board of directors of Debtor has
determined that Debtor’s execution, delivery and performance of this Agreement
may reasonably be expected to benefit Debtor, directly or indirectly, and are
in the best interests of Debtor.

 

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

 

AGREEMENTS:

 

ARTICLE I
— Definitions and References

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“LLC Agreement” and “LLC
Rights” shall have the meanings given such terms in Section 2.1(b).

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

ARTICLE II
— Security Interest

 

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

 

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

 

(b)                  LLC Rights.  All of the following (herein
collectively called the “LLC Rights”), whether now or hereafter
existing, which are owned by Debtor or in which such Debtor otherwise has any
rights:

 

(i)                  all units of limited liability company
ownership interests described on Exhibit A hereto and all other ownership
interests in any Issuer that is a limited liability company which are now or
hereafter owned by Debtor, all certificates representing any such ownership
interests, all options and other rights, contractual or otherwise, at any time
existing with respect to such ownership interests, and all dividends, cash,
instruments and other property now or hereafter received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
ownership interests;

 

(ii)               all proceeds, interest, profits, and other
payments or rights to payment attributable to Debtor’s interests in any Issuer
that is a limited liability company, and all distributions, cash, instruments
and other property now or hereafter received,

 

4

 

receivable or otherwise made
with respect to or in exchange for any interest of Debtor in any Issuer that is
a limited liability company, including interim distributions, returns of
capital, loan repayments, and payments made in liquidation of any Issuer that
is a limited liability company, and whether or not the same arise or are
payable under any operating agreement or certificate forming any Issuer that is
a limited liability company or any other agreement governing any Issuer that is
a limited liability company or the relations among the members of any Issuer
that is a limited liability company (any and all such operating agreements, certificates,
and other agreements being herein called the “LLC Agreements”); and

 

(iii)            all other interests and rights of Debtor in
any Issuer that is a limited liability company, whether under the LLC
Agreements or otherwise, including without limitation any right to cause the
dissolution of any Issuer that is a limited liability company or to appoint or
nominate a successor to Debtor as a member of any Issuer that is a limited
liability company.

 

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

 

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

 

The granting of the
foregoing security interest under this Section 2.1 does not make Secured
Party a successor to Debtor as a member of any Issuer that is a limited
liability company, and neither Secured Party nor any of its successors or
assigns hereunder shall be deemed to have become a member of any Issuer that is
a limited liability company by accepting this Agreement or exercising any right
granted herein unless and until such time, if any, when Secured Party or any such
successor or assign expressly becomes a member of any Issuer that is a limited
liability company after a foreclosure upon LLC Rights.  Notwithstanding anything herein to the
contrary (except to the extent, if any, that Secured Party or any of its successors
or assigns hereafter expressly becomes a member of any Issuer that is a limited
liability company), neither Secured Party nor any of its successors or assigns
shall be deemed to have assumed or otherwise become liable for any debts or
obligations of any Issuer or of Debtor to or under any Issuer that is a limited
liability company, and the above definition of “LLC Rights” shall be deemed
modified, if necessary, to prevent any such assumption or other liability.

 

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

 

(a)                   Credit Agreement Indebtedness.  The
payment by Debtor, as and when due and payable, of all amounts from time to
time owing by Debtor under or in respect of the

 

5

 

Credit
Agreement, each Note, and any of the other Obligation Documents, and the due
performance by Debtor of all of its other obligations under or in respect of
the various Obligation Documents.

 

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

 

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

 

As used herein, the term “Secured
Obligations” refers to all present and future indebtedness, obligations, and
liabilities of whatever type which are described above in this section,
including any interest which accrues after the commencement of any case,
proceeding, or other action relating to the bankruptcy, insolvency, or
reorganization of the Debtor.

 

ARTICLE III
— Representations, Warranties and Covenants

 

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

 

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

 

(b)                  No Conflicts or Consents. 
Neither the ownership or the intended use of the Collateral by Debtor,
nor the grant of the security interest by Debtor to Secured Party herein, nor
the exercise by Secured Party of its rights or remedies hereunder, will (i)
conflict with any provision of (a) the articles or certificate of incorporation
or bylaws of Debtor or any similar charter documents of any Issuer, or (b) any
agreement, judgment, license, order or permit applicable to or binding upon
Debtor or any Issuer, or (ii) result in or require the creation of any Lien,
charge or encumbrance upon any material assets or properties of Debtor or of
any Issuer or Related Person except as expressly contemplated in the Obligation
Documents.  Except as expressly
contemplated in the Obligation Documents (including, without limitation,
Section 6.13 of the Credit Agreement), no consent, approval, authorization
or order of, and no notice to or filing with, any court, governmental
authority, Issuer or third party is required in connection with the grant by

 

6

 

Debtor
of the security interest herein, or the exercise by Secured Party of its rights
and remedies hereunder.

 

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

 

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

 

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

 

(f)                     Pledged Shares. 
Debtor has delivered to Secured Party all certificates evidencing
Pledged Shares or LLC Rights.  All such
certificates are valid and genuine and have not been altered.  All shares and other securities constituting
the Pledged Shares or LLC Rights have been duly authorized and validly issued,
are fully paid and non-assessable, and were not issued in violation of the
preemptive rights of any Person or of any agreement by which Debtor or the
Issuer thereof is bound.  All
documentary, stamp or other taxes or fees owing in connection with the
issuance, transfer or pledge of Pledged Shares or LLC Rights (or rights in
respect thereof) have been paid.  No
restrictions or conditions exist with respect to the transfer, voting or
capital of any Pledged Shares or LLC Rights under the documentation governing
such Pledged Shares or LLC Rights.  The
Pledged Shares and the LLC Rights constitute one hundred percent (100%) of the
shares of capital stock of each Issuer that is a corporation or one hundred
percent (100%) of the membership interests of each Issuer that is a limited
liability company.  No Issuer of any
Pledged Shares or LLC Rights has any outstanding stock rights, rights to subscribe,
options, warrants or convertible securities outstanding or any other rights
outstanding whereby any Person would be entitled to have issued to him capital
stock or membership interests of such Issuer. 
No Issuer that is a limited liability 

 

7

 

company
has made any calls for capital which have not been fully paid by Debtor and by
each other member of such Issuer. 
Debtor is not in default under any LLC Agreement, nor is any other
member of any such Issuer.  Neither the
making of this Agreement nor the exercise of any rights or remedies of Secured
Party hereunder will cause a default under any LLC Agreement.  Debtor’s rights under any LLC Agreement are
enforceable in accordance with their terms, except as such enforcement may be
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors’ rights.  The Pledged Shares do not constitute “margin stock” as such term
is defined in Regulation U promulgated by the Board of Governors of the Federal
Reserve System.

 

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

 

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

 

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

 

(c)                   Inspection and Information. 
Debtor will furnish to Secured Party and each Lender any information
which Secured Party may from time to time reasonably request on behalf of
itself or any Lender concerning the Collateral, any covenant, provision or
condition of this Agreement, or any matter in connection with Debtor’s
businesses and operations.  Debtor shall
permit representatives and independent contractors of the Secured Party to make
such visitations and inspections on the terms as provided in Section 6.10
of the Credit Agreement.  Secured party
and each Lender hereby agree that it

 

8

 

will,
at all times, abide by the terms of Section 10.08 of the Credit Agreement
regarding treatment of confidential information.

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

ARTICLE IV
— Remedies, Powers and Authorizations

 

Section 4.1.                                   Provisions Concerning the Collateral.

 

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

 

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

 

(c)                   Performance by Secured Party.  If
Debtor fails to perform any agreement or obligation contained herein, Secured
Party may itself perform, or cause performance of,

 

11

 

such
agreement or obligation, and the reasonable expenses of Secured Party incurred
in connection therewith shall be payable by Debtor under Section 4.5.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(h)                  at its discretion, retain the Collateral in satisfaction
of the Secured Obligations whenever the circumstances are such that Secured
Party is entitled to do so under the UCC or otherwise (provided that Secured
Party shall in no circumstances be deemed to

 

12

 

have
retained the Collateral in satisfaction of the Secured Obligations in the
absence of an express notice by Secured Party to Debtor that Secured Party has
either done so or intends to do so); and

 

(i)                      take any other Enforcement Action.

 

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

 

Section 4.3.                                   Application of Proceeds. Whenever Secured Party applies any cash
held by Secured Party as Collateral, or any cash proceeds received by Secured
Party in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral, the same shall be applied in the following order
(subject to the rights of Lenders under the Credit Agreement and subject to the
terms of the Intercreditor Agreement):

 

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

 

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

 

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

 

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

 

(e)                   By holding the same as Collateral;

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

hereof,
except expenses resulting from Secured Party’s gross negligence or willful
misconduct.

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

all of the Pledged Shares or
LLC Rights with any committee, depository, transfer, agent, registrar or other
designated agent upon such terms and conditions as it may determine; and

 

(iii)            all dividends and interest payments which are
received by Debtor contrary to the provisions of subsection (b)(i) of this
section shall be received in trust for the benefit of Secured Party, shall
be segregated from other funds of Debtor, and shall be forthwith paid over to
Secured Party as Pledged Shares or LLC Rights in the exact form received, to be
held by Secured Party as Collateral.

 

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

 

ARTICLE V
— Miscellaneous

 

Section 5.1.                                   Notices.  Any notice or communication
required or permitted hereunder shall be given as provided in the Credit
Agreement.

 

Section 5.2.                                   Amendments.  No amendment of any provision
of this Agreement shall be effective unless it is in writing and signed by
Debtor, Secured Party, and Required Lenders (or Debtor and Secured Party with
the prior written consent of Required Lenders) and no waiver of any provision
of this Agreement, and no consent to any departure by Debtor therefrom, shall
be

 

17

 

effective unless it is in
writing and signed by Secured Party with the prior written consent of Required
Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given and to the
extent specified in such writing.

 

Section 5.3.                                   Preservation of Rights.  No
failure on the part of Secured Party or any Lender to exercise, and no delay in
exercising, any right hereunder or under any other Obligation Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of
any other right.  Neither the execution
nor the delivery of this Agreement shall in any manner impair or affect any
other security for the Secured Obligations. 
The rights and remedies of Secured Party and each Lender provided herein
and in the other Obligation Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law.  The rights of Secured Party and each Lender
under any Obligation Document against any party thereto are not conditional or
contingent on any attempt by Secured Party or such Lender to exercise any of
its rights under any other Obligation Document against such party or against
any other Person.

 

Section 5.4.                                   Unenforceability.  Any
provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or invalidity without invalidating the remaining portions hereof or
thereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

 

Section 5.5.                                   Survival of Agreements.  All
representations and warranties of Debtor herein, and all covenants and
agreements herein shall survive the execution and delivery of this Agreement,
the execution and delivery of any other Obligation Documents and the creation
of the Secured Obligations.

 

Section 5.6.                                   Other Liable Party. 
Neither this Agreement nor the exercise by Secured Party or the failure
of Secured Party to exercise any right, power or remedy conferred herein or by
law shall be construed as relieving any Other Liable Party from liability on
the Secured Obligations or any deficiency thereon.  This Agreement shall continue irrespective of the fact that the
liability of any Other Liable Party may have ceased or irrespective of the
validity or enforceability of any other Obligation Document to which Debtor or
any Other Liable Party may be a party, and notwithstanding the reorganization,
death, incapacity or bankruptcy of any Other Liable Party, and notwithstanding
the reorganization or bankruptcy or other event or proceeding affecting any
Other Liable Party.

 

Section 5.7.                                   Binding Effect and Assignment. 
This Agreement creates a continuing security interest in the Collateral
and (a) shall be binding on Debtor and its successors and permitted assigns and
(b) shall inure, together with all rights and remedies of Secured Party
hereunder, to the benefit of Secured Party that inure to the benefit of such
Lender, and their respective successors, transferees and assigns.  Without limiting the generality of the
foregoing, each Lender may (except as otherwise provided in and subject to the
Credit Agreement and the Intercreditor Agreement) pledge, assign or otherwise
transfer any or all of its rights under any or

 

18

 

all of the Obligation
Documents to any other Person, and such other Person shall thereupon become
vested with all of the benefits in respect thereof, herein or otherwise in
accordance with the Credit Agreement. 
None of the rights or duties of Debtor hereunder may be assigned or
otherwise transferred without the prior written consent of Secured Party.

 

Section 5.8.                                   Termination.  It is contemplated by the
parties hereto that there may be times when no Secured Obligations are
outstanding, but notwithstanding such occurrences, this Agreement shall remain
valid and shall be in full force and effect as to subsequent outstanding
Secured Obligations.  Upon the
satisfaction in full of the Secured Obligations, upon the termination or
expiration of the Credit Agreement and the Commitment, and upon written request
for the termination hereof delivered by Debtor to Secured Party, this Agreement
and the security interest created hereby shall terminate and all rights to the
Collateral shall revert to Debtor. 
Secured Party will, upon Debtor’s request and at Debtor’s reasonable
expense, (a) return to Debtor such of the Collateral as shall not have been
sold or otherwise disposed of or applied pursuant to the terms hereof; and (b)
execute and deliver to Debtor such documents as Debtor shall reasonably request
to evidence such termination.

 

SECTION 5.9.                  FINAL AGREEMENT.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES HERETO.  THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

 

Section 5.10.                             Loan Document. 
This Agreement is a “Loan Document”, as defined in the Credit Agreement,
and, except as expressly provided herein to the contrary, this Agreement is
subject to all provisions of the Credit Agreement governing such Loan
Documents.

 

Section 5.11.                             Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas applicable to contracts made and to be performed
entirely within such State, except as required by mandatory provisions of law
and except to the extent that the perfection and the effect of perfection or
non-perfection of the security interest created hereunder, in respect of any
particular collateral, are governed by the laws of a jurisdiction other than
such State.

 

Section 5.12.                             Counterparts. 
This Agreement may be separately executed in any number of counterparts,
all of which when so executed shall be deemed to constitute one and the same
Agreement.

 

Section 5.13.                             Amendment and Restatement. 
This Agreement renews, amends and restates that certain Pledge Agreement
dated as of April 24, 2003, executed by Debtor in favor of Bank of America,
N.A., for the benefit of the “Lenders” named therein (the “Original Pledge

 

19

 

Agreement”), in its
entirety, effective as of the date first written above, and all of the terms
and provisions hereof shall supersede the terms and provisions thereof;
provided, however that this Agreement renews, extends and continues all Liens
existing by the Original Pledge Agreement, although the terms and provisions
and conditions of such Liens shall hereafter be governed in all respects by
this Agreement.

 

[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

20

 

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

 

 

	
   

  	
  WESTERN GAS RESOURCES,
  INC., as Debtor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Krysiak

  	
   

  
	
   

  	
   

  	
  William J. Krysiak

  
	
   

  	
   

  	
  Executive Vice President
  and

  
	
   

  	
   

  	
  Chief Financial Officer

  

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Secured Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Stein

  	
   

  
	
   

  	
   

  	
  Name: Richard L. Stein

  
	
   

  	
   

  	
  Title: Principal

  

 

 

EXHIBIT
A

 

Corporations

 

	
  Issuer

  	
   

  	
  Certificate
  No.

  	
   

  	
  No. of
  Shares

  	
   

  	
  Class

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MIGC, Inc.

  	
   

  	
  3

  	
   

  	
  100,000

  	
   

  	
  common

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Western Gas Resources - Texas, Inc.

  	
   

  	
  3

  	
   

  	
  990

  	
   

  	
  common

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Western Gas Resources - Texas, Inc.

  	
   

  	
  4

  	
   

  	
  10

  	
   

  	
  common

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mountain Gas Resources, Inc.

  	
   

  	
  A-3

  	
   

  	
  1,000,834

  	
   

  	
  common

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lance Oil & Gas Company, Inc.

  	
   

  	
  1

  	
   

  	
  1,000

  	
   

  	
  common

  	
   

  

 

Limited
Liability Companies

 

	
  Issuer

  	
   

  	
  Membership Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Western Gas Wyoming,
  L.L.C.

  	
   

  	
  100

  	
  %

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]