EXHIBIT 10.14
LIMITED WAIVER, CONSENT, RELEASE AND AMENDMENT NO. 3 TO
SECOND AMENDED AND RESTATED MASTER SHELF AGREEMENT
This LIMITED WAIVER, CONSENT, RELEASE AND AMENDMENT NO. 3 TO SECOND
AMENDED AND RESTATED MASTER SHELF AGREEMENT (this "Amendment") is entered into
as of June 1, 1999, by and among Western Gas Resources, Inc., a Delaware
corporation (the "Company"), and The Prudential Insurance Company of America and
Pruco Life Insurance Company (together, "Prudential").
PRELIMINARY STATEMENTS
1. The Company and Prudential entered into that certain Second Amended
and Restated Master Shelf Agreement dated as of December 19, 1991 (effective
January 31, 1996), as amended by Letter Amendment No. 1 dated November 21, 1997
and Letter Amendment Xx. 0 ("Xxxxxx Xxxxxxxxx Xx. 0") dated March 31, 1999 (as
amended, the "Agreement"). Capitalized terms not otherwise defined herein shall
have the meanings specified in the Agreement, as amended hereby.
2. In order to secure the Obligations (as defined in the hereinafter
defined WGR Canada Guaranty), including the obligations of the Company under the
Notes and the Agreement, the Company caused WGR Canada, Inc., a New Brunswick
corporation (WGR Canada"), to execute and deliver to Prudential a Guaranty,
dated as of May 30, 1997 in favor of Prudential together with all subsequent
holders of the Obligations (the "WGR Canada Guaranty").
3. In order to secure the Secured Obligations (as defined in the Pledge
Agreement), including the obligations of the Company under the Notes and the
Agreement, the Company executed and delivered the Pledge Agreement pursuant to
which the Company pledged and granted a security interest to Prudential in,
among other things, 1,000 shares of common stock of WGR Canada (the "WGR Canada
Pledged Stock").
4. The Company and WGR Canada have requested that Prudential (i)
terminate the WGR Canada Guaranty and otherwise grant a general release of WGR
Canada under the WGR Canada Guaranty and any other obligations and liabilities
arising under all documents and agreements delivered pursuant to the WGR Canada
Guaranty or in connection therewith and (ii) release Prudential's security
interest in 35% of the total number of issued and outstanding shares of capital
stock of WGR Canada under the Pledge Agreement (the "Releases").
5. The Company and Prudential desire to provide for (a) the limited
waiver of certain provisions of the Agreement, (b) Prudential's consent and
agreement that certain matters relating to the terms of subordinated debt to be
offered by Company are to Prudential's satisfaction, and (c) the amendment of
the Agreement as specified herein.
6. Prudential is willing to grant the Releases, subject to the
condition that the lenders parties to the NCNB Agreement and the holders of the
notes issued pursuant to the 1995 Note Purchase Agreement grant similar releases
of
the guaranties provided by WGR Canada to such lenders parties to the NCNB
Agreement, NCNB and such holders of the notes issued pursuant to the 1995 Note
Purchase Agreement and the respective security interests of such lenders parties
to the NCNB Agreement, NCNB and such holders of the notes issued pursuant to the
1995 Note Purchase Agreement in 350 shares of common stock of WGR Canada (the
"Corresponding Releases").
7. The Company and Prudential wish to amend the Agreement in certain
other respects.
8. Prudential is the holder of 100% of the outstanding principal amount
of the Notes issued under the Agreement.
In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. Waivers, Consents and Releases.
(a) Consent to Certain Subordinated Debt. Subject to the terms and
conditions set forth herein, and in reliance upon the representations
and warranties of the Company contained herein, pursuant to the
definition of the term "Subordinated Debt" and "Subordinated Debt
Guaranties" in paragraph 10B of the Agreement, Prudential hereby
consents and agrees that $155,000,000 of Debt of the Company proposed
to be issued by the Company on the terms provided in that certain
Indenture, draft dated June 3, 1999, among the Company, the Guarantors
and Chase Bank of Texas, N.A. (the "Draft Indenture") and the
guaranties by certain Subsidiaries of the Company of such Debt to be
entered into in connection with the offering of such Debt and on the
terms provided the Draft Indenture will be subordinate in right of
payment to the payment of the Notes and the Guaranties, respectively,
in a manner satisfactory to Prudential, and therefore will constitute
Subordinated Debt and Subordinated Debt Guaranties, provided that the
terms of the final indenture entered into relating to the offering of
such Debt conform in all material respects to the terms provided in the
Draft Indenture.
(b) Releases of WGR Canada and WGRS; Release of Existing MGTC Guaranty.
Prudential hereby releases and discharges, effective as of the
Effective Date, WGR Canada and its successors and assigns from all
obligations and liabilities under the WGR Canada Guaranty and all
documents and agreements delivered pursuant to the WGR Canada Guaranty
or in connection therewith and further hereby terminates the WGR Canada
Guaranty. In addition, Prudential hereby authorizes releases and
discharges 350 shares of common stock of WGR Canada from the liens and
security interests granted by the Company pursuant to the Pledge
Agreement, automatically and without further action by any party. The
Company agrees that it shall, from time to time, execute, acknowledge
and deliver to Prudential instruments, agreements, and other documents
as Prudential shall reasonably request in order to further evidence the
liens and security interests in the 650 shares of common
stock of WGR Canada remaining subject to tho Pledge Agreement,
including delivering to NCNB. as bailee on behalf of the holders of the
Notes, a new certificate and a new stock power evidencing 650 shares of
common stock of WGR Canada.
By its execution of this Amendment, Prudential confirms that,
effective as of the Amendment No. 3 Effective Date, it has released
WGRS from all obligations and liabilities under the Guaranty executed
by WGRS and all documents and agreements delivered pursuant thereto,
provided that each other holder of Senior Debt has also released WGRS
from all obligations and liabilities under all Existing Guaranties
executed by WGRS and all documents and agreements delivered pursuant
thereto.
Prudential hereby releases and discharges, effective as of the
Amendment No. 3 Effective Date MGTC from all obligations and
liabilities under the Existing Guaranty executed by MGTC and all
documents and agreements delivered pursuant thereto, provided that (a)
each other holder of Senior Debt also releases MGTC from all Guaranties
executed by MGTC and all documents and agreements delivered pursuant
thereto, and (b) MGTC delivers the conditional Guaranty described in
Section 17(e) of this Amendment.
(c) Waiver. Prudential hereby waives any Default or Event of Default
arising under either clause (xvii) or clause (xviii) of paragraph 7A of
the Agreement to the extent that any such Default or Event of Default
may be deemed to have arisen out of the releases provided for in this
Section 1 or, in the case of the existing MGTC Guaranty, due to the
failure of MGTC to obtain prior approval of the Wyoming Public Service
Commission with respect to the existing MGTC Guaranty.
(d) Certain Other Documents Satisfactory. Prudential hereby confirms
that the documents delivered pursuant to clauses (x), (xii), (xiii) and
(xiv) of Section IID of Letter Amendment No. 2 are satisfactory to
Prudential in form and substance.
SECTION 2. Amendments.
(a) Amendment to Paragraph SM. Guaranties. Paragraph 5M of the
Agreement is amended by deleting the text reading "the NCNB Agreement,
the Bridge Facility or the 1995 Note Purchase Agreement" and replacing
it with "any Debt" and adding immediately after the words "execute and
deliver a Guaranty" the words and punctuation ", or if such Subsidiary
or entity shall have previously executed and delivered a Guaranty which
has been subsequently released by the Required Holder(s), to execute
and deliver a new Guaranty,"
(b) Amendment to Paragraph 5N. Pledge of Subsidiary Stock. The last
sentence of paragraph 5N of the Agreement is amended and restated in
its entirety to read as follows:
"If, however, after any release described in the preceding
sentence the Company is downgraded below the Minimum Rating,
the Company shall immediately pledge, and cause its
Subsidiaries to pledge, all stock or other equity interests in
all Guarantors, and 65 % (or if the Company shall pledge any
higher percentage of the issued and outstanding capital stock
of WGR Canada to any other Person, then such higher
percentage) of the issued and outstanding capital stock of WGR
Canada, to the holders of the Notes under one or more Pledge
Agreements."
(c) Amendment to Paragraph 6C(5). Merger and Sale of Assets. Paragraph
6C(5) of the Agreement is amended by inserting the word "and" at the
end of clause (vi) thereof, deleting the comma and the word "and" at
the end of clause (vii) thereof, adding a period at the end of clause
(vii) thereof and deleting clause (viii) thereof.
(d) Amendment to Paragraph 6C(7). Limitation on Credit Extension.
Paragraph 6C(7) of the Agreement is amended by deleting the words "have
not executed a Guaranty" and replacing them with the words "are not
Guarantors" and by deleting the words "has executed a Guaranty" and
replacing them with the words "is a Guarantor".
(e) Amendment to Paragraph 6C(10). Guaranties. Paragraph 6C(10) of the
Agreement is hereby amended by inserting the phrase "or such
Subsidiary, as the case may be," after the word "Company" in the
proviso at the end of such paragraph.
(f) Amendment to Paragraph 6E(1). Modifications. Paragraph 6E(1) of the
Agreement is amended, effective of the Amendment No. 3 Effective Date,
in its entirety to read as follows:
"6E(1) Modifications. The Company will not amend or modify (i)
any term or provision of the NCNB Agreement or the 1995 Note
Purchase Agreement so as to change to an earlier date the date
on which any payment of principal is to be made thereunder,
(ii) any term or provision of the NCNB Agreement so as to
shorten the duration or increase the amount of any commitment
thereunder, or (iii) any term or provision of the 1995 Note
Purchase Agreement so as to increase the principal amount
outstanding thereunder or to change to an earlier date the
date on which any payment of principal is to be made
thereunder; provided, that the Company may increase the
interest rate or fees payable under or with respect to the
1995 Note Purchase Agreement or the NCNB Agreement if the
Company complies with the other provisions of
this Agreement, including, without limitation, paragraph
6E(3)."
(g) Waiver Under Paragraph 6E(3). To the extent that clause (v) of
Section 6.2(a) of the NCNB Agreement could be interpreted to require
the execution of an intercreditor agreement due to the issuance of the
Subordinated Debt described in Section 1(a) of this Amendment,
Prudential hereby waives any requirement under the final grammatical
paragraph of paragraph 6E(3) that the holders of such Subordinated Debt
(or the trustee under the indenture described in Section 1(a) of this
Amendment) enter into an intercreditor agreement with the holders of
the Notes.
(h) Amendment to Paragraph 7A. Acceleration. Paragraph 7A of the
Agreement is amended by (I) amending clause (iii) by deleting the
dollar amount "$10,000,000" and replacing it with the dollar amount
"$5,000,000" and (II) adding immediately after the word "Company" in
the clause reading "then (a) if such event is a Event of Default
specified in clause (viii), (ix) or (x) of this paragraph 7A with
respect to the Company" words and punctuation reading ", any Restricted
Subsidiary that is a Significant Subsidiary or a group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary".
(i) Amendment of Paragraph 10B. Other Terms. Paragraph 10B of the
Agreement is amended by (I) amending the following definitions:
(1) the definition of "Guarantor" is amended by deleting the
text and punctuation reading "WGR Canada, Inc., a New
Brunswick corporation;" and adding the words "after the
Amendment No. 3 Effective Date" to the end thereof; and
(2) the definition of "Restricted Payment" is amended by
adding immediately after the text and punctuation reading "any
payment of principal of," the following text and punctuation:
"or any deposit of any cash, securities or other
property in defeasance of,"
and (II) adding the following defined terms in their respective
alphabetical order:
"Amendment No. 3 Effective Date" shall mean the date on which
the Limited Waiver, Consent, Release and Amendment No. 3 to
Second Amended and Restated Master Shelf Agreement shall
become effective.
"Existing Guaranty" shall mean each guaranty of a Subsidiary
of the Company existing immediately prior to the Amendment No.
3 Effective Date.
"Indenture" shall mean that certain Indenture, dated as of
June 15, 1999, among the Company, the Guarantors and Chase
Bank of Texas, N.A., as trustee, relating to the issuance of
up to $225,000,000 aggregate principal amount of senior
subordinated notes, as such Indenture is in effect on the date
noted above.
"Restricted Subsidiary" shall have the meaning specified in
the Indenture.
"Significant Subsidiary" shall have the meaning specified in
the Indenture.
"Unrestricted Subsidiary" shall have the meaning specified in
the Indenture.
"WGR Canada" shall mean WGR Canada, Inc., a New Brunswick
corporation.
(j) Amendment of Exhibits. Exhibit B of the Pledge Agreement is hereby
deleted and replaced with Exhibit B attached hereto.
SECTION 3. Conditions of Effectiveness.
Each of the foregoing sections of this Amendment shall become effective
on the date hereof (the "Amendment No. 3 Effective Date"), subject in all cases
to the following having been received by, and being satisfactory to, Prudential:
(a) duly executed counterparts of this Amendment;
(b) copies of amendments in similar form and substance to this
Amendment to the NCNB Agreement and the 1995 Note Purchase Agreement
certified as true and correct copies by the Company;
(c) copies of the Corresponding Releases;
(d) a Consent, in the form attached as Exhibit A hereto, duly executed
by each Guarantor except WGR Canada; and
(e) a Guaranty executed by MGTC, which shall be substantially in the
form of Exhibit E attached to the Agreement, except that it shall
expressly state that the effectiveness thereof is conditioned upon
MGTC's obtaining the approval of the Public Service Commission of the
State of Wyoming; and
(f) payment of $6,000.00 to compensate Prudential for its allocable
overhead for in-house legal support.
SECTION 4. Representations and Warranties of Company.
As an inducement to Prudential to enter into this Amendment, the
Company represents and warrants as follows:
(a) Organization. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware.
(b) Power and Authority. The Company has all requisite corporate power
to execute, deliver and perform its obligations under this Amendment.
The execution, delivery and performance by the Company of this
Amendment have been duly authorized by all requisite corporate action
on the part of the Company. The Company has duly executed and delivered
this Amendment and this Amendment constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(c) No Conflicts. Neither the execution and delivery of this Amendment
by the Company, nor the consummation of the transactions contemplated
hereby, nor fulfillment of nor compliance with the terms and provisions
hereof will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result
in any violation of, or result in the creation of any security
interest, lien or other encumbrance upon any of the properties or
assets of the Company pursuant to, its charter or by-laws, any award of
any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute, law, rule
or regulation to which the Company is subject.
(d) Consents. Neither the nature of the business conducted by the
Company, nor any of its properties, nor any relationship between the
Company and any other Person, nor any circumstance in connection with
the transactions contemplated by this Amendment is such as to require
any authorization, consent, approval, exemption or other action by or
notice to or filing with any court or administrative or governmental
body or any other Person in connection with the execution and delivery
of this Amendment or fulfillment of or compliance with the terms and
provisions hereof.
(e) Additional Documentation. No documents or instruments, including
consents, authorizations and filings, are required under the
certificate of incorporation and bylaws of the Company, or any
applicable law with respect to the Company or any of its property or to
which the Company or any of its property is subject, or by any material
provision of any security issued by the Company or of any agreement,
instrument or undertaking under which the Company is obligated or by
which it or any of the property
owned by it is bound, in connection with the execution, delivery,
performance, validity and enforceability of this Amendment and the
other documents to be executed and delivered hereunder.
(f) No Material Adverse Change. Except as previously disclosed to
Prudential in writing, there has been no material adverse change in the
business, property or assets, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole since
December 31, 1998.
(g) No Event of Default or Default. Immediately following the
effectiveness of this Amendment, no Event of Default or Default exists.
(h) WGR Canada. The 650 shares of common stock of WGR Canada remaining
subject to the liens and security interests granted by the Company
under the Pledge Agreement, after giving effect to the release provided
for in the first paragraph of Section 1 of this Amendment, constitute
65% of the total number of issued and outstanding shares of capital
stock of WGR Canada.
(i) Bridge Facility. All amounts owing under the Bridge Facility have
been paid in full and the Bridge Facility has been terminated.
(j) WGRS Existing Guaranties. All Existing Guaranties executed by WGRS
have been terminated.
SECTION 5. Miscellaneous.
(a) Upon and after the Amendment No. 3 Effective Date, each reference
to the Agreement or "this Agreement" in the Agreement and each Note
shall mean and be a reference to the Agreement as amended by this
Amendment.
(b) Except as specifically amended herein, the Agreement shall remain
in full force and effect, and is hereby ratified and confirmed.
(c) Other than as expressly set forth herein, the execution, delivery
and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of Prudential, nor constitute a waiver of
any provision of the Agreement, the Notes, the Guaranties, the Pledge
Agreement or any other document, instrument or agreement executed and
delivered in connection with the Agreement. (d) The Company confirms
its agreement, pursuant to paragraph 11B of the Agreement, to pay
promptly all expenses of Prudential related to this Amendment and all
matters contemplated hereby.
(e) GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK.
(f) This Amendment may be executed in counterparts (including those
transmitted by facsimile), each of which shall be deemed an original
and all of which taken together shall constitute one and the same
document. Delivery of this Amendment may be made by telecopy of a duly
executed counterpart copy hereof.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute this Amendment as of the day and year first above
written.
WESTERN GAS RESOURCES, INC.
By:
-------------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President-Finance
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
-------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By:
-------------------------------
Vice President
EXHIBIT A
---------
CONSENT TO AMENDMENT
Each of the undersigned is a Guarantor ("Guarantor" and, collectively,
"Guarantors") under separate guaranties (each being a "Guaranty") in favor of
The Prudential Insurance Company of America and Pruco Life Insurance Company
(together, "Prudential") with respect to the obligations of Western Gas
Resources, Inc. (the "Company") under that certain Second Amended and Restated
Master Shelf Agreement dated as of December 19 of 2001 as amended by Letter
Amendment No. 1 dated November 21, 1997 and Letter Amendment No. 2 dated March
31, 1999 (as amended, the "Agreement"). Prudential and the Company are entering
into that certain Limited Waiver, Consent, Release and Amendment No. 3 to Second
Amended and Restated Master Shelf Agreement, dated as of June 1, 1999 (the
"Amendment"). Each of the undersigned hereby consents to the Amendment and each
hereby confirms and agrees that its Guaranty is, and shall continue to be, in
full force and effect and is hereby confirmed and ratified in all respects
except that, upon the effectiveness of, and on and after the date of this
consent, all references in the Guaranty of the undersigned to the "Agreement,"
"thereunder," "thereof," or words of like import referring to the Agreement
shall mean the Agreement as amended by the Amendment, as the same may be further
amended or modified from time to time.
Dated as of June 1, 1999.
XXXXX OIL & GAS COMPANY, INC.
MGTC, INC.
MIGC, INC.
MOUNTAIN GAS RESOURCES, INC.
PINNACLE GAS TREATING, INC.
WESTERN GAS RESOURCES - TEXAS, INC.
WESTERN GAS RESOURCES - OKLAHOMA, INC.
WESTERN GAS WYOMING, L.L.C.
By:
-------------------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President-Finance
of each of the above-name companies.
Issuers
-------
CORPORATIONS Certificate No. of
Issuer No. 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 1,000,843 common
Western Gas Resources-Oklahoma, Inc. 1 1,000 common
Western Power Services, Inc............. 1 1,000 common
Pinnacle Gas Treating, Inc.............. 1 1,000 common
Xxxxx Oil & Gas Company, Inc............ 1 1,000 common
LIMITED LIABILITY COMPANIES
---------------------------
Issuer Membership Interest
------ -------------------
Western Gas Wyoming, L.L.C.......... 100%
CONSENT TO AMENDMENT
Each of the undersigned is a Guarantor ("Guarantor" and, collectively,
"Guarantors") under separate guaranties (each being a "Guaranty") in favor of
The Prudential Insurance Company of America and Pruco Life Insurance Company
(together, "Prudential") with respect to the obligations of Western Gas
Resources, Inc. (the "Company") under that certain Second Amended and Restated
Master Shelf Agreement dated as of December 19 of 2001as amended by Letter
Amendment No. 1 dated November 21, 1997 and Letter Amendment No. 2 dated March
31, 1999 (as amended, the "Agreement"). Prudential and the Company are entering
into that certain Limited Waiver, Consent, Release and Amendment No. 3 to Second
Amended and Restated Master Shelf Agreement, dated as of June 1, 1999 (the
"Amendment"). Each of the undersigned hereby consents to the Amendment and each
hereby confirms and agrees that its Guaranty is, and shall continue to be, in
full force and effect and is hereby confirmed and ratified in all respects
except that, upon the effectiveness of, and on and after the date of this
consent, all references in the Guaranty of the undersigned to the "Agreement,"
"thereunder," "thereof," or words of like import referring to the Agreement
shall mean the Agreement as amended by the Amendment, as the same may be further
amended or modified from time to time.
Dated as of June 1, 1999.
XXXXX OIL & GAS COMPANY, INC.
MGTC, INC.
MIGC, INC.
MOUNTAIN GAS RESOURCES, INC.
PINNACLE GAS TREATING, INC.
WESTERN GAS RESOURCES - TEXAS, INC.
WESTERN GAS RESOURCES - OKLAHOMA, INC.
WESTERN GAS WYOMING, L.L.C.
By:
-----------------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President-Finance
of each of the above-name companies.
