[Execution Copy]
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WESTERN GAS RESOURCES, INC.
$200,000,000
SENIOR NOTES
SECOND AMENDED AND RESTATED MASTER SHELF AGREEMENT
Dated as of December 19, 1991
(EFFECTIVE AS OF JANUARY 31, 1996)
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Exhibit 10.49
TABLE OF CONTENTS
(Not Part of Agreement)
RESTATEMENT AND AMENDMENT; AUTHORIZATION OF ISSUE OF NOTES............... -1-
1A. RESTATEMENT AND AMENDMENT OF EXISTING AGREEMENT................ -1-
1B. AUTHORIZATION OF ISSUE OF NOTES................................ -1-
PURCHASE AND SALE OF NOTES............................................... -2-
2A. FACILITY....................................................... -2-
2B. ISSUANCE PERIOD................................................ -2-
2C. SPREAD INFORMATION............................................. -2-
2D. REQUEST FOR PURCHASE........................................... -3-
2E. RATE QUOTES.................................................... -3-
2F. ACCEPTANCE..................................................... -3-
2G. MARKET DISRUPTION.............................................. -4-
2H. CLOSING........................................................ -4-
2I. FEES........................................................... -5-
2I(1) FACILITY FEE............................................ -5-
2I(2) DELAYED DELIVERY FEE.................................... -5-
2I(3) CANCELLATION FEE........................................ -6-
2I(4) STRUCTURING FEE......................................... -6-
2I(5) EXTENSION FEE........................................... -6-
CONDITIONS PRECEDENT..................................................... -6-
3A. CERTAIN DOCUMENTS.............................................. -6-
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT..................... -7-
3C. PURCHASE PERMITTED BY APPLICABLE LAWS.......................... -8-
3D. LEGAL MATTERS.................................................. -8-
3E. PROCEEDINGS.................................................... -8-
3F. AMENDMENT OF CREDIT AGREEMENTS................................. -8-
3G. FACILITY FEE PAYMENT........................................... -8-
3H. CONSENT OF BANKS............................................... -8-
PREPAYMENTS.............................................................. -8-
4A. REQUIRED PREPAYMENTS........................................... -8-
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT.............. -9-
4C. NOTICE OF OPTIONAL PREPAYMENT.................................. -9-
4D. APPLICATION OF PREPAYMENTS..................................... -9-
4E. RETIREMENT OF NOTES............................................ -9-
AFFIRMATIVE COVENANTS................................................... -10-
i
5A. FINANCIAL STATEMENTS.......................................... -10-
5B. INSPECTION OF PROPERTY........................................ -12-
5C. COVENANT TO SECURE NOTES EQUALLY.............................. -12-
5D. AGREEMENT ASSUMING LIABILITY ON NOTES......................... -12-
5E. NOTICE OF MATERIAL EVENTS..................................... -13-
5F. MAINTENANCE OF PROPERTIES..................................... -13-
5G. MAINTENANCE OF EXISTENCE AND QUALIFICATIONS................... -13-
5H. INSURANCE..................................................... -13-
5I. COMPLIANCE WITH AGREEMENTS AND LAW............................ -14-
5J. COMPLIANCE WITH ENVIRONMENTAL LAWS............................ -14-
5K. INFORMATION REQUIRED BY RULE 144A............................. -15-
5L. ERISA......................................................... -15-
5M. GUARANTIES.................................................... -15-
NEGATIVE COVENANTS...................................................... -15-
6A. FINANCIAL COVENANTS........................................... -15-
6A(1). CONSOLIDATED TANGIBLE NET WORTH....................... -15-
6A(2). CURRENT RATIO......................................... -16-
6A(3). DEBT MAINTENANCE...................................... -16-
6A(4). FIXED CHARGE COVERAGE RATIO........................... -16-
6B. DIVIDEND LIMITATION........................................... -▇▇-
▇▇. ▇▇▇▇, ▇▇▇▇, AND OTHER RESTRICTIONS............................ -16-
6C(1). LIENS................................................. -16-
6C(2). DEBT.................................................. -18-
6C(3). LIMITATION ON INVESTMENTS AND NEW BUSINESSES.......... -18-
6C(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES................ -19-
6C(5). MERGER AND SALE OF ASSETS............................. -19-
6C(6). LEASE RENTALS......................................... -20-
6C(7). LIMITATION ON CREDIT EXTENSIONS....................... -21-
6C(8). CONTRACTS; TAKE-OR-PAY AGREEMENTS..................... -21-
6C(9). SALE OR DISCOUNT OF RECEIVABLES....................... -21-
6C(10). GUARANTIES........................................... -21-
6C(11). TRANSACTIONS WITH AFFILIATES......................... -22-
6C(12). PANHANDLE JOINT VENTURE DEBT......................... -23-
6D. ISSUANCE OF STOCK BY SUBSIDIARIES............................. -23-
6E. OTHER AGREEMENTS.............................................. -23-
EVENTS OF DEFAULT....................................................... -23-
7A. ACCELERATION.................................................. -23-
7B. RESCISSION OF ACCELERATION.................................... -26-
7C. NOTICE OF ACCELERATION OR RESCISSION.......................... -27-
7D. OTHER REMEDIES................................................ -27-
ii
REPRESENTATIONS, COVENANTS AND WARRANTIES............................... -27-
8A. ORGANIZATION.................................................. -27-
8B. FINANCIAL STATEMENTS.......................................... -27-
8C. ACTIONS PENDING............................................... -28-
8D. OUTSTANDING DEBT.............................................. -28-
8E. ENVIRONMENTAL COMPLIANCE...................................... -28-
8F. TAXES......................................................... -28-
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS...................... -29-
8H. OFFERING OF NOTES............................................. -29-
8I. REGULATION G, ETC............................................. -29-
8J. ERISA......................................................... -30-
8K. GOVERNMENTAL CONSENT.......................................... -30-
8L. TITLE TO PROPERTIES........................................... -30-
8M. HOSTILE TENDER OFFERS......................................... -30-
8N. DISCLOSURE.................................................... -31-
8O. DELIVERY OF NCNB AGREEMENT.................................... -31-
8P. PUBLIC UTILITY HOLDING COMPANY ACT; FEDERAL POWER ACT......... -31-
REPRESENTATIONS OF THE PURCHASERS....................................... -31-
9A. NATURE OF PURCHASE............................................ -31-
9B. SOURCE OF FUNDS............................................... -31-
DEFINITIONS............................................................. -32-
10A. YIELD-MAINTENANCE TERMS....................................... -32-
10B. OTHER TERMS................................................... -33-
10C. ACCOUNTING TERMS AND DETERMINATIONS........................... -44-
MISCELLANEOUS........................................................... -44-
11A. NOTE PAYMENTS................................................. -44-
11B. EXPENSES...................................................... -44-
11C. CONSENT TO AMENDMENTS......................................... -45-
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES;
LOST NOTES.................................................... -46-
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS......................... -46-
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT.............................................. -46-
11G. SUCCESSORS AND ASSIGNS........................................ -47-
11H. DISCLOSURE TO OTHER PERSONS; CONFIDENTIALITY.................. -47-
11I. NOTICES....................................................... -47-
11J. PAYMENTS DUE ON NON-BUSINESS DAYS............................. -48-
11K. SATISFACTION REQUIREMENT...................................... -48-
11L. GOVERNING LAW................................................. -48-
11M. SEVERABILITY.................................................. -48-
11N. DESCRIPTIVE HEADINGS.......................................... -48-
11O. COUNTERPARTS.................................................. -48-
iii
11P. BINDING AGREEMENT............................................ -49-
PURCHASER SCHEDULE
SCHEDULE 5A -- FORM OF PROJECTIONS
SCHEDULE 6C(2) -- EXISTING DEBT AND LIENS
SCHEDULE 6C(3) -- JOINT VENTURES
SCHEDULE 6C(8) -- COUNTERPARTIES
EXHIBIT A -- FORM OF NOTE
EXHIBIT B -- FORM OF REQUEST FOR PURCHASE
EXHIBIT C -- FORM OF CONFIRMATION OF ACCEPTANCE
EXHIBIT D -- FORM OF OPINION OF COMPANY'S COUNSEL
EXHIBIT E -- LIST OF AGREEMENTS RESTRICTING DEBT
EXHIBIT F -- FORM OF CONFIDENTIALITY LETTER
EXHIBIT G -- FORM OF GUARANTY
EXHIBIT H -- FORM OF INTERCREDITOR AGREEMENT
iv
WESTERN GAS RESOURCES, INC.
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
As of December 19, 1991
To: The Prudential Insurance Company
of America ("PRUDENTIAL")
c/o Prudential Capital Group
Four Gateway Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
SENIOR NOTES
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Ladies and Gentlemen:
The undersigned, Western Gas Resources, Inc. (the "COMPANY"), hereby
agrees with each Purchaser as follows:
PARAGRAPH 1. RESTATEMENT AND AMENDMENT; AUTHORIZATION OF ISSUE OF
NOTES.
1A. RESTATEMENT AND AMENDMENT OF EXISTING AGREEMENT. The Company and
Prudential entered into a Master Shelf Agreement dated as of December 19, 1991
as amended by Letter Amendment No. 1 dated October 22, 1992 (the "ORIGINAL
AGREEMENT"). On July 22, 1993, the Company and Prudential entered into an
Amended and Restated Master Shelf Agreement which Amended and Restated the
Original Agreement in its entirety. Such Amended and Restated Master Shelf
Agreement has been amended by Letter Amendment No. 1 dated June 30, 1993, Letter
Amendment No. 2 dated August 31, 1994, Letter Amendment No. 3 dated April 1,
1995, Letter Amendment No. 4 dated July 28, 1995 and Letter Amendment No. 5
dated November 30, 1995. (The Amended and Restated Master Shelf Agreement, as
amended, is referred to herein as the "EXISTING AGREEMENT"). The Company has
issued to Prudential or Prudential Affiliates $200,000,000 aggregate principal
amount of Senior Notes pursuant to the Existing Agreement. The Company and
Prudential are entering into this Agreement to, among other things, incorporate
the amendments into the agreement and amend other provisions of the Existing
Agreement. Accordingly, the Company, Prudential and each Purchaser agrees that
the Existing Agreement is hereby amended and restated in its entirety to read as
provided in this Agreement.
1B. AUTHORIZATION OF ISSUE OF NOTES. The Company has authorized and
issued
its senior promissory notes (the "NOTES") in the aggregate principal amount of
$200,000,000, dated the date of issue thereof, maturing, in the case of each
Note so issued, no more than 12 years after the date of original issuance
thereof (with an average life not in excess of 10 years), bearing interest on
the unpaid balance thereof from the date thereof at the rate per annum, and
having such other particular terms, as set forth, in the case of each Note so
issued, in the Confirmation of Acceptance with respect to such Note delivered
pursuant to paragraph 2F, and substantially in the form of Exhibit A attached
hereto. The term "NOTES" as used herein shall include each Note delivered
pursuant to any provision of this Agreement and each Note delivered in
substitution or exchange for any such Note pursuant to any such provision.
Notes which have (i) the same final maturity, (ii) the same installment payment
- --
dates, (iii) the same installment payment amounts (as a percentage of the
---
original principal amount of each Note), (iv) the same interest rate, and (v)
-- -
the same interest payment periods, are herein called a "SERIES" of Notes.
Capitalized terms used herein have the meanings specified in paragraph 10.
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PARAGRAPH 2. PURCHASE AND SALE OF NOTES.
2A. FACILITY. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Notes pursuant to
this Agreement. The willingness of Prudential to consider such purchase of
Notes is herein called the "FACILITY". At any time, the aggregate principal
amount of Notes stated in paragraph 1, minus (i) the aggregate principal amount
-----
of Notes purchased and sold pursuant to this Agreement prior to such time
(including the Existing Notes) and (ii) the aggregate principal amount of
Accepted Notes which have not yet been purchased and sold hereunder prior to
such time, is herein called the "AVAILABLE FACILITY AMOUNT" at such time.
Notwithstanding the willingness of Prudential to consider purchases of Notes,
this Agreement is entered into on the express understanding that neither
Prudential nor any other Prudential Affiliate shall be obligated to make or
accept offers to purchase Notes, or to quote rates, spreads or other terms with
respect to specific purchases of Notes, and the Facility shall in no way be
construed as a capital commitment by Prudential or any other Prudential
Affiliate.
2B. ISSUANCE PERIOD. Notes may be issued and sold pursuant to this
Agreement until the earlier of (i) the Termination Date (or if such day is not a
Business Day, the Business Day next preceding such day) and (ii) the thirtieth
day after Prudential shall have given to the Company, or the Company shall have
given to Prudential, a notice stating that it elects to terminate the issuance
and sale of Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day). The period
during which Notes may be issued and sold pursuant to this Agreement is herein
called the "ISSUANCE PERIOD". The "TERMINATION DATE" shall be October 31, 1995.
2C. SPREAD INFORMATION. Upon request by the Company on any Business
Day during the Issuance Period if there is an Available Facility Amount on such
Business Day, Prudential will, to the extent reasonably practicable, provide to
the Company information (by telecopier or telephone) with respect to various
spreads at which Prudential or Prudential Affiliates might be interested in
purchasing Notes of different average lives. The amount and content of
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information so provided shall be in the sole discretion of Prudential, but it is
the intent of Prudential to provide information which will be of use to the
Company in determining whether to initiate procedures for use of the Facility.
Information so provided shall not constitute an offer to purchase Notes, and
neither Prudential nor any other Prudential Affiliate shall be obligated to
purchase Notes at the spreads specified. Information so provided shall be
representative of potential interest only for the period commencing on the day
such information is provided and ending on the earlier of the fifth Business Day
after such day and the first day after such day on which further spread
information is provided. Prudential may suspend or terminate providing
information pursuant to this paragraph 2C if, in its sole discretion, it
determines that there has been an adverse change in the credit quality of the
Company after the date of this Agreement.
2D. REQUEST FOR PURCHASE. The Company may from time to time during
the Issuance Period make requests for purchases of Notes (each such request
being a "REQUEST FOR PURCHASE"). Each Request for Purchase shall be made to
Prudential by telecopier and confirmed by nationwide overnight delivery service,
and shall (i) specify the aggregate principal amount of Notes covered thereby,
which shall not be less than $10,000,000 and not be greater than the Available
Facility Amount at the time such Request for Purchase is made, (ii) specify the
principal amounts, final maturities, and installment payment dates and amounts
of the Notes covered thereby, (iii) specify the use of proceeds of such Notes,
(iv) specify the proposed day for the closing of the purchase and sale of such
Notes, which shall be a Business Day during the Issuance Period not less than 10
Business Days and not more than 25 Business Days after the making of such
Request for Purchase, (v) specify the number of the account and the name and
address of the depository institution to which the purchase prices of such Notes
are to be transferred on the Closing Day for such purchase and sale, (vi)
certify that the representations and warranties contained in paragraph 8 are
true on and as of the date of such Request for Purchase except to the extent of
changes caused by the transactions herein contemplated and that there exists on
the date of such Request for Purchase no Event of Default or Default, and (vii)
be substantially in the form of Exhibit B attached hereto. Each Request for
Purchase shall be in writing and shall be deemed made when received by
Prudential.
2E. RATE QUOTES. Not later than five Business Days after the Company
shall have given Prudential a Request for Purchase pursuant to paragraph 2D,
Prudential may provide (by telephone promptly thereafter confirmed by
telecopier, in each case no earlier than 9:30 A.M. and no later than 1:00 P.M.
New York City local time) interest rate quotes for the several principal
amounts, maturities and installment payment schedules (for Notes with average
lives not to exceed 10 years) of Notes specified in such Request for Purchase.
Each quote shall represent, the fixed interest rate per annum, payable on the
outstanding principal balance of such Notes until such balance shall have become
due and payable, at which Prudential would be willing to purchase such Notes at
100% of the principal amount thereof.
2F. ACCEPTANCE. Within 30 minutes after Prudential shall have
provided any interest rate quotes pursuant to paragraph 2E or such shorter
period as Prudential may specify to the Company at any time, including the time
at which the rate is quoted (such period being the "ACCEPTANCE WINDOW"), the
Company may, subject to paragraph 2G, elect to accept such interest
-3-
rate quotes as to not less than $10,000,000 aggregate principal amount of the
Notes specified in the related Request for Purchase. Such election shall be made
by an Authorized Officer of the Company notifying Prudential by telephone or
telecopier within the Acceptance Window (but not earlier than 9:30 A.M. or later
than 2:00 P.M., New York City local time) that the Company elects to accept such
interest rate quotes, specifying the Notes (each such Note being an "ACCEPTED
NOTE") as to which such acceptance (an "ACCEPTANCE") relates. The day the
Company gives, and Prudential receives, notice of an Acceptance with respect to
any Accepted Notes is herein called the "ACCEPTANCE DAY" for such Accepted
Notes. Any interest rate quotes as to which Prudential does not receive an
Acceptance within the Acceptance Window shall expire, and no purchase or sale of
Notes hereunder shall be made based on such expired interest rate quotes.
Subject to paragraph 2G and the other terms and conditions hereof, (i) the
Company agrees to sell to Prudential or a Prudential Affiliate, and Prudential
agrees to purchase, or to cause the purchase by a Prudential Affiliate of, the
Accepted Notes (the "PRUDENTIAL ACCEPTED NOTES") as to which interest rate
quotes shall have been provided to the Company for purchases by Prudential or
Prudential Affiliates at 100% of the principal amount of such Notes. Prior to
the close of business on the Business Day next following the Acceptance Day, the
Company and Prudential will execute a confirmation of such Acceptance
substantially in the form of Exhibit C attached hereto (a "CONFIRMATION OF
ACCEPTANCE").
2G. MARKET DISRUPTION. Notwithstanding the provisions of paragraph
2F, if Prudential shall have provided interest rate quotes pursuant to paragraph
2E and thereafter prior to the time notice of an Acceptance with respect to such
quotes shall have been received by Prudential in accordance with paragraph 2F
there shall occur a general suspension, material limitation, or significant
disruption of trading in securities generally on the New York Stock Exchange or
in the market for U.S. Treasury securities and other financial instruments, then
such interest rate quotes shall expire, and no purchase or sale of Notes
hereunder shall be made based on such expired interest rate quotes. If the
Company thereafter notifies Prudential of the Acceptance of any such interest
rate quotes, such Acceptance shall be ineffective for all purposes of this
Agreement, and Prudential shall promptly notify the Company that the provisions
of this paragraph 2G are applicable with respect to such Acceptance.
2H. CLOSING. Not later than 11:30 A.M. (New York City local time) on
the Closing Day for any Accepted Notes, the Company will deliver to each
Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of Prudential Capital Group, ▇▇▇▇ ▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ the Notes to be purchased by such Purchaser in the form of a single
Accepted Note for the Accepted Notes which have exactly the same terms (or such
greater number of Notes in authorized denominations as such Purchaser may
request) dated the Closing Day and registered in such Purchaser's name (or in
the name of its nominee), against payment of the purchase price thereof by
transfer of immediately available funds for credit to the Company's account
specified in the Request for Purchase of such Notes. If the Company fails to
tender to any Purchaser the Accepted Notes to be purchased by such Purchaser on
the scheduled Closing Day for such Accepted Notes as provided above in this
paragraph 2H, or any of the conditions specified in paragraph 3 shall not have
been fulfilled by the time required on such scheduled Closing Day, the Company
shall, prior to 1:00 P.M., New York City local time, on such scheduled Closing
Day notify such Purchaser in writing whether (x) such closing is to be
-
rescheduled (such rescheduled date to
-4-
be a Business Day during the Issuance Period not less than one Business Day and
not more than 30 Business Days after such scheduled Closing Day (the
"RESCHEDULED CLOSING DAY") and certify to such Purchaser that the Company
reasonably believes that it will be able to comply with the conditions set forth
in paragraph 3 on such Rescheduled Closing Day and that the Company will pay the
Delayed Delivery Fee in accordance with paragraph 2I(2) or (y) such closing is
-
to be canceled as provided in paragraph 2I(3). In the event that the Company
shall fail to give such notice referred to in the preceding sentence, such
Purchaser may at its election, at any time after 1:00 P.M., New York City local
time, on such scheduled Closing Day, notify the Company in writing that such
closing is to be canceled as provided in paragraph 2I(3).
2I. FEES.
2I(1) FACILITY FEE. The Company paid to Prudential in immediately
available funds a fee (the "FACILITY FEE") on each Closing Day, in an amount
equal to (i) .30% of the aggregate principal amount of Notes sold on such
Closing Day for the first $150,000,000 of Notes issued pursuant to this
Agreement and (ii) .10% of the aggregated principal amount of Notes sold on such
Closing Day with respect to the remaining $50,000,000 of Notes issued pursuant
to this Agreement.
2I(2) DELAYED DELIVERY FEE. If the closing of the purchase and sale
of any Accepted Note is delayed for any reason (other than, with respect to any
Accepted Note, because the Purchaser of such Accepted Note is prohibited by law
from purchasing an Accepted Note or the Purchaser of such Accepted Notes shall
request a delay in writing) beyond the original Closing Day for such Accepted
Note, the Company will pay to the Purchaser which shall have agreed to purchase
such Accepted Note, on the last Business Day of each calendar month, commencing
with the first such day to occur more than 30 days after the Acceptance Day for
such Accepted Note and ending with the last such day to occur prior to the
Cancellation Date or the actual closing date of such purchase and sale, and on
the Cancellation Date or actual closing date of such purchase and sale (if such
Cancellation Date or closing date occurs more than 30 days after the Acceptance
Day for such Accepted Note), a fee (the "DELAYED DELIVERY FEE") equal to the
product of (i) the amount determined by Prudential to be the amount by which the
-
bond equivalent yield per annum of such Accepted Note exceeds the average
investment rate per annum on alternative investments (this rate (on a bond
equivalent basis) would be, as of the date of this Agreement, the 30-60-90 day
Commercial Paper rate for Prudential, with the exact period being a function of
the actual number of days elapsed) having a maturity date or dates the same as,
or closest to, the Rescheduled Closing Day or Rescheduled Closing Days from time
to time fixed for the delayed delivery of such Accepted Note, (ii) the principal
--
amount of such Accepted Note, and (iii) a fraction the numerator of which is
---
equal to the number of actual days elapsed from and including the 31st day after
the Acceptance Day for such Accepted Note (in the case of the first such payment
with respect to such Accepted Note) or from and including the date of the next
preceding payment (in the case of any subsequent payment with respect to such
Accepted Note) to but excluding the date of such payment, and the denominator of
which is 360. In no case shall the Delayed Delivery Fee be less than zero.
Nothing contained herein shall obligate any Purchaser to purchase any Accepted
Note on any day other than the Closing Day for such Accepted Note, as the same
may be rescheduled from time to time in compliance with paragraph 2H.
-5-
2I(3) CANCELLATION FEE. If the Company at any time notifies the
Purchaser obligated to purchase any Accepted Note in writing that the Company is
canceling the closing of the purchase and sale of such Accepted Note, or if the
Purchaser obligated to purchase any Accepted Note notifies the Company in
writing under the circumstances set forth in the last sentence of paragraph 2H
that the closing of the purchase and sale of such Accepted Note is to be
canceled, or if the closing of the purchase and sale of such Accepted Note is
not consummated on or prior to the last day of the Issuance Period (the date of
any such notification, or the last day of the Issuance Period, as the case may
be, being the "CANCELLATION DATE"), the Company will, upon demand by such
Purchaser pay such Purchaser in immediately available funds an amount (the
"CANCELLATION FEE") equal to the price increase described in the next sentence
(the "PRICE MOVEMENT") divided by 100 and multiplied by the principal amount of
such Accepted Note. The Price Movement (expressed in decimals) shall be
calculated by subtracting (a) the bid price at the time of the Acceptance on the
-
Acceptance Day for such Accepted Note of U.S. Treasury securities having a
maturity equal to or closest to the average life of such Accepted Note (as
determined by Prudential) as reported on the display designated as "Page 678" on
the Telerate Service (or such other display as may replace Page 678 on the
Telerate Service), from (b) the ask price at 10:00 A.M. (New York City local
-
time) on the Cancellation Date of such U.S. Treasury securities (as determined
by Prudential in (a) above) as reported on the display designated as "Page 678"
on the Telerate Service (or such other display as may replace Page 678 on the
Telerate Service). Each price shall be based on a U.S. Treasury security having
a par value of $100.00 and shall be rounded to the second decimal place. In no
case shall the Cancellation Fee be less than zero.
2I(4) STRUCTURING FEE. The Company paid Prudential a structuring fee
of $75,000 on October 18, 1991 for structuring the Facility.
2I(5) EXTENSION FEE. The Company paid Prudential the first $50,000
installment of the extension fee on June 4, 1993 for extending the Facility.
PARAGRAPH 3. CONDITIONS PRECEDENT.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to
purchase and pay for any Accepted Notes, and the respective obligations of
Prudential to cause the purchase of and payment for any Prudential Accepted
Notes, are subject to the satisfaction, on or before the Closing Day for such
Accepted Notes, of the following conditions:
3A. CERTAIN DOCUMENTS. Each Purchaser shall have received the
following, each dated the Closing Day unless otherwise indicated:
(i) The Notes to be purchased by such Purchaser.
(ii) A certificate of the Secretary or Assistant Secretary of
the Company certifying (a) the resolutions of the Board of Directors
of each of the Company and the Guarantors approving this Agreement,
the Notes and the Guaranties, respectively, and of all documents
evidencing other necessary corporate action and
-6-
governmental approvals, if any, with respect to this Agreement, the
Notes and the Guaranties, and (b) the names and true signatures of the
officers of the Company authorized to sign this Agreement and the
Notes and the other documents to be delivered hereunder.
(iii) Certified copies of the Certificate of Incorporation and
bylaws of the Company.
(iv) A favorable opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel of
the Company, reasonably satisfactory to such Purchaser and
substantially in the form of Exhibit D attached hereto and as to such
other matters as you may reasonably request. The Company hereby
directs such counsel to deliver such opinion, agrees that the issuance
and sale of any Accepted Notes will constitute a reconfirmation of
such direction, and understands and agrees that each Purchaser
receiving such an opinion will and is hereby authorized to rely on
such opinion.
(v) A certified copy of the NCNB Agreement and all amendments,
modifications, consents or waivers with respect thereto.
(vi) A certified copy of the 1993 Note Purchase Agreement and
the 1995 Note Purchase Agreement and all amendments, modifications,
consents or waivers with respect thereto.
(vii) A certified copy of the Receivables Purchase Agreement and
all amendments, modifications, consents or waivers with respect
thereto.
(viii) A certified copy of each guaranty or security agreement
guarantying or securing the obligations of the Company under the NCNB
Agreement and all amendments, modifications, consents or waivers with
respect thereto.
(ix) A copy of each Guaranty dated the date of issue thereof,
duly executed by each Guarantor, and a Consent of Guarantors to Amendment
and Restatement if requested by Prudential.
(x) A copy of the Intercreditor Agreement dated the date of
issue thereof, duly executed by each bank that is the beneficiary of a Bank
Guaranty.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations
and warranties contained in paragraph 8 shall be true on and as of such Closing
Day, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on such Closing Day no Event of Default or
Default and no Default or Event of Default would result from the issuance of the
Notes to be purchased on such Closing Day; and the Company shall have delivered
to such Purchaser an Officer's Certificate, dated such Closing Day, to both such
effects.
-7-
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and
payment for the Accepted Notes to be purchased by such Purchaser on the terms
and conditions herein provided (including the use of the proceeds of such Notes
by the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation G,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject such Purchaser to any tax, penalty, liability or other onerous condition
under or pursuant to any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other evidence as it may
reasonably request to establish compliance with this condition.
3D. LEGAL MATTERS. Counsel for such Purchaser, including any special
counsel for the Purchasers retained in connection with the purchase and sale of
such Accepted Notes, shall be satisfied as to all legal matters relating to such
purchase and sale, and such Purchaser shall have received from such counsel
favorable opinions as to such legal matters as it may reasonably request.
3E. PROCEEDINGS. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all documents
incident thereto shall be reasonably satisfactory in substance and form to such
Purchaser, and it shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
3F. AMENDMENT OF CREDIT AGREEMENTS. The NCNB Agreement shall not
require (or if so required, such conditions shall simultaneously terminate) (i)
the grant of a Lien on any property of the Company or any Subsidiary or (ii) the
delivery of any security agreement or the guaranty or agreement to provide
guaranties of the obligations of the Company under such agreements other than
any Bank Guaranty which is subject to the Intercreditor Agreement and for which
such Purchaser shall have received a Guaranty from the same Guarantor. In
addition, such agreements shall not require that any lenders party thereto, or
an agent or representative thereof, be named as beneficiary or loss payee on any
insurance policy and all insurance policies of the Company and its Subsidiaries
shall not name any such lender or agent as beneficiary or loss payee.
3G. FACILITY FEE PAYMENT. Prudential shall have received, within one
Business Day of such Closing Day, the applicable Facility Fee for Notes to be
issued on such Closing Day.
3H. CONSENT OF BANKS. The Company shall have received any consent
required by the NCNB Agreement and delivered a copy thereof to each Purchaser.
PARAGRAPH 4. PREPAYMENTS.
4. PREPAYMENTS. The Notes shall be subject to prepayment only with
respect to the required prepayments specified in paragraph 4A and the optional
prepayments permitted by paragraph 4B.
4A. REQUIRED PREPAYMENTS. Until the Notes of each Series shall be
paid in full,
-8-
the Company shall apply to the prepayment of the Notes of such Series, without
premium, the principal amounts specified, if any, in each Note of such Series
and such principal amounts of such Notes, together with interest thereon to the
prepayment dates specified in such Notes, shall become due on such prepayment
dates. The remaining principal amount of such Notes, together with interest
accrued thereon, shall become due on the maturity date of such Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes of
each Series shall be subject to prepayment on or after 90 days from the date of
issuance thereof, in whole at any time or from time to time in part (in
multiples of $1,000,000), at the option of the Company, at 100% of the principal
amount so prepaid plus interest thereon to the prepayment date and the Yield-
Maintenance Amount, if any, with respect to each such Note. If the Company and
the holder of any Note shall prior to the prepayment date designate in writing a
different amount, the amount so designated shall be payable on the prepayment
date in lieu of the Yield-Maintenance Amount with respect to such Note. Any
partial prepayment of any such Notes pursuant to this paragraph 4B shall be
applied in satisfaction of required payments of principal of such Notes in
inverse order of their scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder
of each Note to be prepaid pursuant to paragraph 4B irrevocable written notice
of such prepayment not less than 10 Business Days prior to the prepayment date,
specifying such prepayment date, specifying the aggregate principal amount of
the Notes of the same Series as such Note to be prepaid on such date,
identifying each Note held by such holder, and the principal amount of each such
Note, to be prepaid on such date and stating that such prepayment is to be made
pursuant to paragraph 4B. Notice of prepayment having been given as aforesaid,
the principal amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with the Yield-Maintenance
Amount, if any, herein provided, shall become due and payable on such prepayment
date.
4D. APPLICATION OF PREPAYMENTS. In the case of each partial
prepayment pursuant to paragraph 4A or 4B of all outstanding Notes of any
Series, the principal amount to be prepaid shall be allocated to all Notes of
such Series at the time outstanding (including, for the purpose of this
paragraph 4D only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates other
than by prepayment pursuant to paragraph 4A or 4B) in proportion to the
respective outstanding principal amounts thereof.
4E. RETIREMENT OF NOTES. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated installment or final maturities (other than by
prepayment pursuant to paragraph 4A or 4B or upon acceleration of such final
maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly
or indirectly, Notes held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the time
outstanding upon the same terms and conditions. Any Notes so prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
its Subsidiaries or
-9-
Affiliates shall not be deemed to be outstanding for any purpose under this
Agreement, except as provided in paragraph 4D.
PARAGRAPH 5. AFFIRMATIVE COVENANTS.
5. AFFIRMATIVE COVENANTS. So long as any Note shall remain unpaid,
the Company covenants that:
5A. FINANCIAL STATEMENTS. The Company will deliver to the holder of
each Note in duplicate:
(i) as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, a consolidating and consolidated
statement of operations and statement of cash flows of the Company and
its Subsidiaries for the period from the beginning of the current
fiscal year to the end of such quarterly period, and a consolidating
and consolidated balance sheet of the Company and its Subsidiaries as
at the end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and certified by an authorized
financial officer of the Company, subject to changes resulting from
year-end adjustments; provided, however, that delivery pursuant to
-------- -------
clause (iv) below of copies of the Quarterly Report on Form 10-Q of
the Company for such quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of
this clause (i) with respect to consolidated financial statements;
(ii) as soon as practicable and in any event within 90 days
after the end of each fiscal year, a consolidating and consolidated
statement of income and statement of cash flows of the Company and its
Subsidiaries for such year, and a consolidating and consolidated
balance sheet of the Company and its Subsidiaries as at the end of
such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit,
all in reasonable detail and reasonably satisfactory in scope to the
Required Holder(s) and, as to the consolidated statements, certified
to the Company by independent public accountants of recognized
standing selected by the Company whose certificate shall be in scope
and substance reasonably satisfactory to the Required Holder(s) and,
as to the consolidating statements, certified by an authorized
financial officer of the Company; provided, however, that delivery
-------- -------
pursuant to clause (iv) below of copies of the Annual Report on Form
10-K of the Company for such fiscal year filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of
this clause (ii) with respect to consolidated financial statements;
(iii) as soon as practicable, and in any event within 105 days
after the end of each fiscal year of MIGC, complete consolidated and
consolidating (if applicable) financial statements of each of MIGC,
MGTC and any other Subsidiary that owns
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or operates pipelines subject to state or federal rate regulation and
has annual revenues in excess of $5,000,000 together with all notes
thereto, prepared in reasonable detail in accordance with regulations
promulgated by the Federal Energy Regulatory Commission in the case of
MIGC and regulations promulgated by the Wyoming Public Service
Commission in the case of MGTC, together with an opinion regarding
MIGC, based on audits using generally accepted auditing standards, of
independent certified public accountants of recognized standing
stating that such consolidated financial statements have been so
prepared; such consolidated financial statements shall contain a
balance sheet as of the end of such fiscal year and statements of
operations and cash flows, and of changes in stockholders' equity for
such fiscal year, each setting forth in comparative form the
corresponding figures for the preceding fiscal year;
(iv) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, press releases, notices and
reports as it shall send to its public stockholders and copies of all
registration statements (without exhibits) and all reports which it
files with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and
Exchange Commission);
(v) prior to April 30 in each year, a projection of the
consolidated cash flows of the Company, its Subsidiaries and the joint
ventures in which the Company or its Subsidiaries has an investment
for the current fiscal year, in the form of Schedule 5A hereto;
(vi) as soon as delivered to such persons, all other reports,
statements and notices delivered to (a) the agent, or the other
lenders under the NCNB Agreement or (b) if the NCNB Agreement is no
longer in effect, the lenders under the Company's major bank credit
facility; and
(vii) as soon as practicable after receipt thereof, a copy of
each other report submitted to the Company by independent accountants
in connection with any annual, interim or special audit made by them
of the books of the Company at any time during which the Company is
not required to file periodic reports with the Securities and Exchange
Commission pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended;
(viii) with reasonable promptness, such other information as the
holder of any Note may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to the holder of each Note an Officer's
Certificate demonstrating (with computations in reasonable detail) compliance by
the Company and its Subsidiaries with the provisions of paragraphs 6A(1), 6A(2),
6A(3), 6A(4), ▇▇, ▇▇(▇), ▇▇(▇), ▇▇(▇), ▇▇(▇), ▇▇(▇), 6C(6)
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and 6C(7) and stating that there exists no Event of Default or Default, or, if
any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto. Together with each delivery of financial statements required by clause
(ii) above, the Company will deliver to each holder of any Notes a certificate
of such accountants stating that, in making the audit necessary to the
certification of such financial statements, they have obtained no knowledge of
any Event of Default or Default, or, if they have obtained knowledge of any
Event of Default or Default, specifying the nature and period of existence
thereof. Such accountants, however, shall not be liable to anyone by reason of
their failure to obtain knowledge of any Event of Default or Default which would
not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards.
The Company also covenants that forthwith upon the chief executive
officer, chief financial officer, Vice President -- Finance, Executive Vice
President -- General Counsel, Treasurer or President of the Company obtaining
knowledge of an Event of Default or Default, it will deliver to each holder of
any Notes an Officer's Certificate specifying the nature and period of existence
thereof and what action the Company proposes to take with respect thereto.
5B. INSPECTION OF PROPERTY. The Company will permit any Person
designated by the holder of any Note in writing, at such holder's expense, to
visit and inspect any of the properties of the Company and its Subsidiaries
while accompanied by personnel of the Company or a Subsidiary, to examine the
corporate books and financial records of the Company and its Subsidiaries and
make copies thereof or extracts therefrom and to discuss the affairs, finances
and accounts of any of such corporations with the principal officers of the
Company and its independent public accountants, all at such reasonable times and
as often as such holder may reasonably request; provided, that each Person so
--------
designated by any holder to visit and inspect any properties shall, by virtue of
such designation, be deemed to have agreed to comply with the Company's on-site
safety procedures that are applicable to such properties. If at the time of any
such inspection a Default or an Event of Default exists, the Company shall pay
all reasonable out of pocket costs incurred by each holder in connection with
such inspection.
5C. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that, if
it or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6C(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C), it
will make or cause to be made effective provision whereby the Notes will be
secured by such Lien equally and ratably with any and all other Debt thereby
secured so long as any such other Debt shall be so secured.
5D. AGREEMENT ASSUMING LIABILITY ON NOTES. The Company covenants
that, if at any time any Person should become liable (as co-obligor, endorser,
guarantor or surety), on any other obligation of the Company or any obligation
of any Subsidiary, (other than (i) obligations incurred in the ordinary course
of business evidencing guaranties of gas purchases, transportation fees and
construction contracts, (ii) surety bonds, appeal bonds and construction bonds
(including bonds necessary for right-of-way condemnation and bonds issuable upon
appeals of judgments or
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in relation to injunctions or temporary restraining orders (incurred in the
ordinary course of business, (iii) letter of credit reimbursement obligations
with respect to letters of credit issued in the ordinary course of business but
not for borrowed money, and (iv) endorsements of negotiable instruments for
collection in the ordinary course of business), the Company will, at the same
time, cause such Person to deliver to each holder of Notes an agreement as shall
be approved by the Required Holders of the Notes of each Series pursuant to
which such Person becomes similarly liable on the Notes.
5E. NOTICE OF MATERIAL EVENTS. The Company will promptly notify each
holder of the Notes of (i) any material adverse change in the Company's
business, property or assets, financial condition or results of operations or
the Company's consolidated financial condition, (ii) the acceleration of the
maturity of any indebtedness owed by the Company or any of its Subsidiaries or
any default by the Company or any of its Subsidiaries under any indenture,
mortgage, agreement, contract or other instrument to which any of them is a
party or by which any of them or any of their properties is bound, if such
acceleration or default would have a material adverse effect upon the Company's
consolidated business, property or assets, financial condition or results of
operations, (iii) any material adverse claim (or any claim of $5,000,000 or
more) asserted against the Company or any of its Subsidiaries or with respect to
the Company's or any Subsidiary's properties, (iv) the occurrence of any
Termination Event or of any event or condition known to the Company which might
adversely affect the enforceability of this Agreement or any Note and (v) the
filing of any suit or proceeding against the Company or any of its Subsidiaries
in which an adverse decision could have a material adverse effect upon the
Company's or any Subsidiary's business, property or assets, financial condition,
or results of operations. Upon the occurrence of any of the foregoing the
Company will, and will cause each such Subsidiary to, take all necessary or
appropriate steps to remedy promptly any such material adverse change, Default,
Event of Default or default, to protect against any such adverse claim, to
defend any such suit or proceeding, to remedy any such Termination Event or
event affecting enforceability, and to resolve all controversies on account of
any of the foregoing.
5F. MAINTENANCE OF PROPERTIES. The Company will, and will cause each
of its Subsidiaries to, maintain, preserve, protect and keep all material
property used or useful in the conduct of its business in good condition and in
compliance with all applicable laws, rules and regulations and will from time to
time make all repairs, renewals and replacements needed to enable the business
and operations carried on in connection therewith to be promptly and
advantageously conducted at all times.
5G. MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. The Company will,
and will cause each of its Subsidiaries to, maintain and preserve its corporate
existence and its rights and franchises in full force and effect and will
qualify to do business as a foreign corporation in all states or jurisdictions
where required by applicable law, except where the failure so to qualify will
not have any material adverse effect on the business, property or assets,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole.
5H. INSURANCE. The Company will, and will cause each of its
Subsidiaries and each of its Affiliates that is controlled by the Company or its
Subsidiaries to, maintain insurance
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with responsible and reputable insurance companies or associations in such
amounts covering such risks as is usually carried by companies of similar size
as the Company engaged in similar businesses and owning similar properties in
the same general areas in which the Company or such Subsidiary or Affiliates
operates.
5I. COMPLIANCE WITH AGREEMENTS AND LAW. The Company will, and will
cause each of its Subsidiaries and each of its Affiliates that is controlled by
the Company or its Subsidiaries to, perform all material obligations it is
required to perform under the terms of each indenture, mortgage, deed of trust,
security agreement, lease, franchise, agreement, contract or other instrument or
obligation to which it is a party or by which it or any of its properties is
bound. The Company will, and will cause each of its Subsidiaries and each of
its Affiliates that is controlled by the Company or its Subsidiaries to, conduct
its business and affairs in compliance with all laws, regulations, and orders
applicable thereto, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith by appropriate proceedings and for which adequate reserves have been
established in accordance with generally accepted accounting principles except
where noncompliance would not materially adversely affect the business, property
or assets, financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole.
5J. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company will, and will
cause each of its Subsidiaries and each of its Affiliates that are controlled by
the Company or its Subsidiaries to, comply in a timely fashion with, or operate
pursuant to valid waivers of the provisions of, all applicable federal, state
and local environmental or pollution-control laws, regulations, orders and
decrees governing, without limitation, the emission of wastewater effluent,
solid and hazardous waste and air pollution, and setting forth general
environmental conditions together with any other applicable requirements for
conducting, on a timely basis, periodic tests and monitoring for contamination
of ground water, surface water, air and land and for biological toxicity of the
aforesaid, and diligently comply with the applicable regulations (except to the
extent such regulations are waived by appropriate governmental authorities) of
the Environmental Protection Agency or other relevant federal, state or local
governmental authority except where noncompliance would not materially adversely
affect the business, property or assets, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole. The Company
shall not be deemed to have breached or violated the preceding sentence of this
paragraph 5J if the Company, any Subsidiary or any Affiliate of the Company is
challenging in good faith by appropriate proceedings diligently pursued the
application or enforcement of any such governmental requirements for which
adequate reserves have been established in accordance with generally accepted
accounting principles. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
COMPANY AGREES TO INDEMNIFY AND HOLD EACH HOLDER OF NOTES AND THEIR RESPECTIVE
OFFICERS, AGENTS AND EMPLOYEES HARMLESS FROM ANY LOSS, LIABILITY, CLAIM OR
EXPENSES THAT SUCH HOLDER MAY INCUR OR SUFFER AS A RESULT OF A BREACH BY THE
COMPANY, ITS SUBSIDIARIES OR AFFILIATES, AS THE CASE MAY BE, OF THIS COVENANT.
-14-
5K. INFORMATION REQUIRED BY RULE 144A. The Company will, upon the
request of the holder of any Note, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in order to
permit compliance with the information requirements of Rule 144A under the
Securities Act in connection with the resale of Notes, except at such times as
the Company is subject to and in compliance with the reporting requirements of
section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5K,
the term "qualified institutional buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
5L. ERISA. The Company will promptly pay and discharge, and will
cause its Subsidiaries promptly to pay and discharge, all obligations and
liabilities arising under ERISA of a character which if unpaid or unperformed
might result in the imposition of a lien against any of its property and will
promptly notify the holder of each Note of (i) the occurrence of any reportable
event (as defined in ERISA) which might result in the termination by the PBGC of
any Plan covering any officers or employees of the Company of any Subsidiary,
any benefits of which are, or are required to be, guaranteed by the PBGC, (ii)
receipt of any notice from the PBGC of its intention to seek termination of any
such Plan or appointment of a trustee therefor, and (iii) its intention to
terminate or withdraw from any Plan. The Company will not, and will not permit
any Subsidiary to, terminate any such Plan or withdraw therefrom unless it shall
be in compliance with all of the terms and conditions of this Agreement after
giving effect to any liability to the PBGC resulting from such termination or
withdrawal.
5M. GUARANTIES. The Company shall require each Subsidiary that
guarantees any obligations of the Company under the NCNB Agreement the 1993 Note
Purchase Agreement or the 1995 Note Purchase Agreement to immediately execute
and deliver to any holder of Notes a Guaranty. The Company will cause each such
Subsidiary to deliver to each holder of the Notes, simultaneously with its
delivery of such a Guaranty, written evidence satisfactory to the Required
Holder(s) and their counsel that such Subsidiary has taken all corporate or
partnership action necessary to duly approve and authorize its execution,
delivery and performance of such Guaranty and other documents which it is
required to execute.
PARAGRAPH 6. NEGATIVE COVENANTS.
6. NEGATIVE COVENANTS. So long as any Note shall remain unpaid, the
Company covenants that:
6A. FINANCIAL COVENANTS. The Company will not permit:
6A(1). CONSOLIDATED TANGIBLE NET WORTH. Consolidated Tangible Net
Worth at any time on or after June 30, 1995 to be less than the sum of (i)
$345,000,000 plus (ii) an amount equal to 50% of Consolidated Net Earnings
earned from June 30, 1995 (to the extent such amount is a positive number) plus
----
(iii) an amount equal to 75% of the net proceeds of any equity offerings after
June 30, 1995.
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6A(2). CURRENT RATIO. The ratio of Consolidated Current Assets to
Consolidated Current Liabilities to be less than 1.0 to 1.0 at any time. For
the purposes of determining compliance with this paragraph 6A(2), (x)
"Consolidated Current Liabilities" will be calculated without including any
-------
payments of principal of any Funded Debt of the Company which are required to be
repaid within one year from the time of calculation and (y) "Consolidated
Current Assets" shall include the amount of funds that are available to be
borrowed under the NCNB Agreement, where "available" means, as of the date of
the determination, the bank parties to the NCNB Agreement are committed to
advance such funds, no default exists under the NCNB Agreement and all
conditions to such banks advancing such funds would be satisfied. Prudential
acknowledges that the Company currently calculates the current ratio only as of
the end of each calendar month.
6A(3). DEBT MAINTENANCE. Adjusted Consolidated Debt at any time to
exceed (i) from August 31, 1994 through October 31, 1996, 60% of Consolidated
Net Tangible Assets and (ii) at any time after October 31, 1996, 55% of
Consolidated Net Tangible Assets. In any event, for purposes of determining
compliance with this paragraph 6A(3), Adjusted Consolidated Debt shall include
without limitation all indebtedness included in determining compliance with the
similar covenant in the NCNB Agreement.
6A(4). FIXED CHARGE COVERAGE RATIO. For each fiscal quarter of the
Company, the ratio of (i) the sum of (a) the Consolidated Net Earnings of the
Company for the four immediately preceding fiscal quarters of the Company plus
----
(b) the Company's consolidated interest expense and provision for income taxes,
depreciation and amortization for the four immediately preceding fiscal quarters
of the Company that were taken into account in determining such consolidated
earnings plus (c) for each calculation that includes the Company's fiscal
----
quarter ending June 30, 1995, that certain $2,000,000 restructuring charge taken
by the Company in its fiscal quarter ending June 30, 1995 as a result of the
Company's general and administrative reductions to (ii) the Company's
--
consolidated accrued interest expense for the four immediately preceding fiscal
quarters to be less than (x) 3.00 to 1.00 for the period commencing August 31,
1994 and ending October 31, 1996, (y) 3.25 to 1.00 for the period commencing
November 1, 1996 and ending October 31, 1997 and (z) 3.75 to 1.00 at any time
after October 31, 1997.
6B. DIVIDEND LIMITATION. The Company will not make any Restricted
Payment except out of Consolidated Net Earnings Available for Restricted
Payments and unless no Default or Event of Default exists before such Restricted
Payment is made and no Default or Event of Default would exist immediately after
such Restricted Payment is made.
6C. LIEN, DEBT, AND OTHER RESTRICTIONS. The Company will not and
will not permit any Subsidiary to:
6C(1). LIENS. Create, assume or suffer to exist any Lien upon any of
its properties or assets, whether now owned or hereafter acquired (whether or
not provision is made for the equal and ratable securing of the Notes in
accordance with the provisions of Paragraph 5C), except
------
(i) Liens for taxes not yet due or which are being actively
contested in good
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faith by appropriate proceedings,
(ii) other statutory Liens incidental to the conduct of its
business or the ownership of its property and assets (including
landlord liens) that are not incurred in connection with the borrowing
of money or the obtaining of advances or credit or guaranteeing the
obligations of a Person, and which do not in the aggregate materially
detract from the value of its property or assets or materially impair
the use thereof in the operation of its business,
(iii) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or a Wholly Owned
Subsidiary,
(iv) existing Liens on property of the Company described in
Schedule 6C(2) attached hereto and securing Debt permitted by clause
(iii) of Paragraph 6C(2),
(v) in the case of transactions that occur after the date
hereof, Liens existing on any real property of any corporation at the
time it becomes a Subsidiary, or existing prior to the time of
acquisition upon any property acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise,
whether or not assumed by the Company or such Subsidiary, or placed on
property at the time of acquisition by the Company or any Subsidiary
to secure all or a portion of (or to secure Debt incurred to pay all
or a portion of) the purchase price thereof, provided that (a) all of
--------
such property is not or shall not thereby become encumbered in any
amount in excess of the lesser of the cost thereof or Fair Market
Value thereof and (b) any such Lien shall not encumber any other
property of the Company or such Subsidiary,
(vi) Liens on deposit and other bank accounts of the Company
created by the right of a lender party to the NCNB Agreement to offset
obligations of the Company owing under such agreements, respectively,
against such accounts if, and only if, there is no agreement between
any such lender and the Company which requires the Company to maintain
any deposit or other funds in any account with such lender other than
as provided in (vii) below,
(vii) Liens on deposits of the Company under the NCNB Agreement
to secure the face amount of outstanding letters of credit issued
pursuant to the NCNB Agreement,
(viii) Liens on the Pledged Accounts Receivable securing sales
or transfers of accounts receivable pursuant to the Permitted
Securitization Program, and
(ix) other Liens on the property of the Company,
provided that the aggregate amount of Debt secured by Liens permitted by clauses
--------
(iv), (v), (viii)
-16-
(to the extent of the Over-Collateralization Amount) and (ix), together with the
amount of undrawn letters of credit subject to the obligation to provide
deposits referred to in clause (vii), whether or not such deposits have been
provided, does not exceed at any time an amount in excess of 5% of Consolidated
Tangible Net Worth.
6C(2). DEBT. Create, incur, assume or suffer to exist any Debt,
except
------
(i) Debt of the Company represented by the Notes,
(ii) Debt of the Company and any Subsidiary secured by Liens
permitted by the provisions of clause (v) of paragraph 6C(1) provided
--------
that the aggregate amount of such Debt together with all other Debt
secured by Liens permitted by paragraphs 6C(1)(iv), 6C(1)(ix) and the
amount of undrawn letters of credit permitted by 6C(1)(viii) does not
exceed at any time an amount equal to 5% of Consolidated Tangible Net
Worth,
(iii) Debt of the Company described in Schedule 6C(2)
attached hereto which shall not be renewed, extended or permitted to
remain outstanding after the stated maturities thereof,
(iv) Debt of any Subsidiary to the Company or any other
Wholly Owned Subsidiary, provided that such Debt shall not be
--------
subordinated to any other obligation of such Subsidiary,
(v) other Debt of the Company not prohibited by 6A(3), and
(vi) Debt of the Guarantors represented by the Bank
Guaranties and the Guaranties.
6C(3). LIMITATION ON INVESTMENTS AND NEW BUSINESSES. (i) Make any
expenditure or commitment or incur any obligation or enter into or engage in any
transaction except in the ordinary course of business (which shall be deemed to
include expenditures, commitments, obligations and transactions permitted by
clause (iii) or clause (iv) of this paragraph 6C(3)); (ii) engage directly or
indirectly in any business or conduct any operations except in connection with
or incidental to its present businesses and operations (which shall be deemed to
include electric power generation and marketing and expenditures, commitments,
obligations and transactions permitted by clause (iii) or clause (iv) of this
paragraph 6C(3)); (iii) make any acquisitions of, capital contributions to, or
other investments in, any Persons which exceed in the aggregate $500,000 other
than (a) capital contributions to and investments in any joint venture described
in Schedule 6C(3) or in the Wholly Owned Subsidiaries, (b) acquisitions of
equity in corporations or partnerships having as their primary business gas
processing, transmission and gathering, oil and gas production and storage or
gas marketing and related activities or electric power generation or marketing
which do not exceed in the aggregate 10% of Consolidated Net Tangible Assets and
(c) deposits with, investments in obligations of and time deposits in any
domestic bank or domestic
-18-
branches of foreign banks which, at the time such deposit or investment is made,
are rated A or better by Standard & Poor's Rating Group or ▇▇▇▇▇'▇ Investor
Service, Inc. or B or better by ▇▇▇▇▇▇▇▇ Bank Watch and investments maturing
within one year from the date of acquisition in direct obligations of or
obligations supported by, the full faith and credit of, the United States of
America or (iv) make any significant acquisitions or investments in any
properties other than gas processing, transmission and gathering facilities,
domestic oil and gas properties, gas storage facilities, gas inventory and
electric power generation facilities which exceeds $5,000,000; provided,
--------
however, that the loans referred to in clause (iv) of paragraph 6C(7) may be
-------
outstanding.
6C(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES. Sell or otherwise
dispose of, or part with control of, any shares of stock or Debt of any
Subsidiary, except to the Company or another Wholly Owned Subsidiary, and except
that all shares of stock and Debt of any Subsidiary at the time owned by or owed
to the Company and all Subsidiaries may be sold as an entirety for a cash
consideration which represents the fair value (as determined in good faith by
the Board of Directors of the Company) at the time of sale of the shares of
stock and Debt so sold, provided that (i) the assets of such Subsidiary together
--------
with (ii) the assets of all other Subsidiaries the stock or Debt of which was
sold or otherwise disposed of in the preceding 12-month period and (iii) the
assets of the Company and its Subsidiaries sold, leased, transferred or
otherwise disposed of pursuant to clause (v) of paragraph 6C(5) in the preceding
12-month period (in each transaction measured by the greater of book value or
Fair Market Value), do not represent more than 15% of Consolidated Net Tangible
Assets as reflected on the most recent annual or quarterly consolidated balance
sheet, and provided further that, at the time of such sale, such Subsidiary
-------- -------
shall not own, directly or indirectly, any shares of stock or Debt of, or any
other continuing investment in any other Subsidiary (unless all of the shares of
stock and Debt of such other Subsidiary owned, directly or indirectly, by the
Company and all Subsidiaries are simultaneously being sold as permitted by this
paragraph 6C(4)), or any shares of stock or Debt of the Company.
6C(5). MERGER AND SALE OF ASSETS. Merge or consolidate with or into
any other Person or sell, convey, lease, transfer or otherwise dispose of all or
any part of its assets, except that:
------
(i) (a) any Subsidiary may merge with the Company (provided,
--------
that the Company shall be the continuing or surviving corporation) and
(b) any Subsidiary may merge with a Wholly Owned Subsidiary (provided
--------
that the Wholly Owned Subsidiary shall be the continuing or surviving
corporation),
(ii) any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Company or to Wholly Owned
Subsidiary,
(iii) the Company may merge with any other corporation, provided
--------
that (a) the Company shall be the continuing or surviving corporation,
and (b) immediately after giving effect to such merger no Event of
Default or Default shall exist,
(iv) any non Wholly Owned Subsidiary may merge or consolidate
with any other corporation, provided, that immediately after giving
--------
effect to such merger or
-19-
consolidation (a) the continuing or surviving corporation of such
merger or consolidation shall constitute a Subsidiary, and (b) no
Event of Default or Default shall exist,
(v) the Company or any Subsidiary may sell, lease, transfer or
otherwise dispose of any of its assets to any Person, provided, that
--------
(a) such assets together with (b) all other assets of the Company and
its Subsidiaries sold, leased, transferred or otherwise disposed of
during the preceding 12-month period, and (c) the assets of all
Subsidiaries the stock or Debt of which has been sold or otherwise
disposed of during the preceding 12-month period pursuant to the first
proviso of paragraph 6C(4) (in each transaction measured by the
greater of book value or Fair Market Value), do not represent more
that 15% of Consolidated Net Tangible Assets as reflected on the most
recent annual or quarterly consolidated balance sheet,
(vi) the Company may merge into or consolidate with any solvent
corporation if (x) the surviving corporation is a corporation
organized under the laws of any State of the United States of America,
(y) such corporation shall expressly assume by an agreement
satisfactory in substance and form to the Required Holders of all
Series of Notes (which agreement may require the delivery in
connection with such assumption of such opinions of counsel as the
Required Holders may reasonably require), all of the obligations of
the Company under this Agreement and the Notes, including all
covenants herein and therein contained, and such successor or
acquiring corporation shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as a party
hereto (it being agreed that such assumption shall, upon the request
of the holder of any outstanding Note and at the expense of such
successor corporation, be evidenced by the exchange of such Note for
another Note executed by such successor corporation, with such changes
in phraseology and form as may be appropriate but in substance of like
terms as the Note surrendered for such exchange and of like unpaid
principal amount, and that each Note executed pursuant to paragraph
11D after such assumption shall be executed by and in the name of such
successor corporation) and (z) after giving effect to such merger or
consolidation no Event of Default or Default shall exist,
(vii) the Company and any Subsidiary may sell or otherwise
dispose of property (including inventory) in the ordinary course of
business, and
(viii) the Company may sell Pledged Accounts Receivables
pursuant to the Permitted Securitization Program in an aggregate
amount not to exceed $75,000,000.
6C(6). LEASE RENTALS. Except for oil, gas and mineral leases or
permits or similar agreements entered into in the ordinary course of business,
and except for leases for transportation equipment, including over-the-road
trucks and tankers, data processing and other office equipment used in the
ordinary course of business, enter into or permit to remain in effect, any
agreements to rent or lease (as lessee) any real or personal property for terms
(including options to renew or extend
-20-
any term, whether or not exercised) of more than three years if after giving
effect thereto the aggregate amount of all sums payable in any fiscal year by
the Company and all Subsidiaries under all such leases would exceed $4,000,000.
6C(7). LIMITATION ON CREDIT EXTENSIONS. Extend credit, make advances
or make loans other than (i) normal and prudent extensions of credit in the
ordinary course of business, which extensions shall not be for longer periods
than those extended by similar businesses operated in a normal and prudent
manner, (ii) loans from Wholly Owned Subsidiaries to the Company, and loans from
Wholly Owned Subsidiaries or the Company to any Subsidiary, in each case made in
the ordinary course of business and, in the case of loans from Wholly Owned
Subsidiaries that have not executed a Guaranty which are made to the Company or
a Subsidiary that has executed a Guaranty, subordinated to the principal of,
interest on and Yield-Maintenance Amount, if any, with respect to the Notes, and
(iii) loans made by the Company to its employees pursuant to the Stock Option
Agreements; provided that the aggregate amount of all such loans permitted by
--------
this clause (iii) outstanding at any time shall not exceed $10,000,000.
6C(8). CONTRACTS; TAKE-OR-PAY AGREEMENTS. Enter into any "take-or-
pay" contract or other contract which requires it to pay for oil, gas, other
hydrocarbons or other minerals prior to taking delivery thereof, provided that
--------
the Company may enter into such contracts so long as the aggregate maximum
direct and contingent liability of the Company under such contracts does not
exceed $500,000 at any one time, and provided further that the Company may enter
-------- -------
into contracts with gas producers requiring the Company to make payments if the
Company has not connected the producer's well to the Company's gathering system
within a specified period of time so long as the maximum direct or contingent
liability of the Company under such contract does not exceed $500,000. The
Company and its Subsidiaries may enter into: (a) Short Hedge Futures to sell
natural gas or liquid hydrocarbons or to offset a Long Hedge Future; and (b)
Long Hedge Futures to purchase natural gas or liquid hydrocarbons or to offset a
Short Hedge Future; provided, however, that at the time of entering into a Short
-------- -------
Hedge Future, the Company shall own and have available to it sufficient amounts
of natural gas or liquid hydrocarbons, as the case may be, or shall own pursuant
to firm contracts to deliver natural gas or liquid hydrocarbons, as the case may
be, pursuant to such Short Hedge Future; provided, further, that at the time of
-------- -------
entering into a Long Hedge Future, the Company shall have sufficient agreements
from Counterparties to purchase natural gas or liquid hydrocarbons, as the case
may be, from the Company so that the Company can resell natural gas or liquid
hydrocarbons, as the case may be, delivered pursuant to such Long Hedge Future.
6C(9). SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, or
discount (other than to the extent of finance and interest charges included
therein) or otherwise sell for less than face value thereof, any of its notes or
accounts receivable except (i) notes or accounts receivable the collection of
------
which is doubtful in accordance with generally accepted accounting principles
and (ii) pursuant to the Permitted Securitization Program; provided, however,
-------- -------
that the Company and its Subsidiaries may not have more than one Permitted
---
Securitization Program outstanding at any time.
6C(10). GUARANTIES. Enter into or be party to:
-21-
(i) any contract for the purchase of materials, supplies or
other property or services if such contract (or any related document)
requires that payment for such materials, supplies or other property
or services shall be made regardless of whether or not delivery of
such materials, supplies or other property or services is ever made or
tendered, or
(ii) any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides
that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial
leases then in general use or requires that the lessee purchase or
otherwise acquire securities or obligations of the lessor, or
(iii) any contract for the sale or use of materials, supplies or
other property, or the rendering of services, if such contract (or any
related document) requires that payment for such materials, supplies
or other property, or the use thereof, or payment for such services,
shall be subordinated to any indebtedness (of the purchaser or user of
such materials, supplies or other property or the Person entitled to
the benefit of such services) owed or to be owed to any Person, or
(iv) any other contract that is a guaranty, an endorsement or
another form of contingent liability in respect of the obligations,
stock or dividends of any Person or that, in economic effect, is
substantially equivalent to a guaranty (other than the guaranties
permitted by clause (vi) of paragraph 6C(2)); provided, that the
--------
foregoing provisions shall not apply to endorsements of negotiable
instruments for collection in the ordinary course of business;
provided, that, notwithstanding the foregoing, any contract of the type
--------
specified in any of the provisions of this paragraph 6C(10) shall be permitted
if the obligations of the Company thereunder constitute Debt of the type
described in clause (iv) of the definition thereof and such Debt were permitted
by the Debt limitations contained in paragraph 6A(3).
6C(11). TRANSACTIONS WITH AFFILIATES. Directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise deal with, in the ordinary course of business or
otherwise (i) any Affiliate, (ii) any Person owning, beneficially or of record,
directly or indirectly, either individually or together with all other Persons
to whom such Person is related by blood, adoption or marriage, stock of the
Company (of any class having ordinary voting power for the election of
directors) aggregating 5% or more of such voting power or (iii) any Person
related by blood, adoption or marriage to any Person described or coming within
the provisions of clause (i) or (ii) of this paragraph 6C(11), provided that the
Company may sell to, or purchase (within the limitations of paragraph 6B) from,
any such Person shares of the Company's stock and except for transactions that
are otherwise permitted by this Agreement and that are in the ordinary course of
the Company's or a Subsidiary's business, and are also upon fair and reasonable
terms no less favorable to the Company or such Subsidiary than it would obtain
in a comparable arm's-length transaction with a Person not an Affiliate.
-22-
6C(12). PANHANDLE JOINT VENTURE DEBT. Permit the Panhandle Joint
Venture to create, incur, assume or suffer to exist any Debt.
6D. ISSUANCE OF STOCK BY SUBSIDIARIES. The Company covenants that it
will not permit any Subsidiary to issue, sell or dispose of any shares of its
stock of any class except to the Company or a Wholly Owned Subsidiary, and
except to the extent that holders of minority interests may be entitled to
purchase stock by reason of preemptive rights.
6E. OTHER AGREEMENTS. Without the prior written consent of the
Required Holder(s) of each Series of Notes, the Company will not amend, modify
or waive (i) any provision of the Term Loan Agreement which would shorten the
maturity or average life of any loan thereunder, (ii) any provision of the
Revolving Loan Agreement which would shorten any commitment thereunder, or (iii)
any provision of the 1993 Note Purchase Agreement or the 1995 Note Purchase
Agreement which would shorten the maturity or average life of any note issued
thereunder.
PARAGRAPH 7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur for any
reason whatsoever and be continuing (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of or
Yield Maintenance Amount payable with respect to any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on any
Note for more than 10 Business Days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as primary
obligor or as guarantor or other surety) in any payment of principal of or
interest on any other obligation for money borrowed (or any Capitalized
Lease Obligation, any obligation under a conditional sale or other title
retention agreement, any obligation issued or assumed as full or partial
payment for property whether or not secured by a purchase money mortgage or
any obligation under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided with respect
thereto, or the Company or any Subsidiary fails to perform or observe any
other agreement, term or condition contained in any agreement under which
any such obligation is created (or if any other event thereunder or under
any such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders of
such obligation (or a trustee on behalf of such holder or holders) to
cause, such obligation to become due (or to be repurchased by the Company
or any Subsidiary) prior to any stated maturity, provided that the
--------
aggregate amount of all obligations as to which such a payment default
shall occur
-23-
and be continuing or such a failure or other event causing or
permitting acceleration (or resale to the Company or any Subsidiary)
shall occur and be continuing exceeds $10,000,000; or
(iv) any representation or warranty made by the Company herein,
by any Guarantor in a Guaranty or by the Company, any Guarantor or any
of their respective officers in any writing furnished in connection
with or pursuant to this Agreement shall be false in any material
respect on the date as of which made; or
(v) the Company fails to perform or observe any term, covenant
or agreement contained in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, covenant, term or condition contained herein and such
failure shall not be remedied within 30 days after the Chief Executive
Officer, President, Chief Financial Officer, Vice President --
Finance, Treasurer or the Executive Vice President -- General Counsel
of the Company obtains actual knowledge thereof; or
(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such
debts become due; or
(viii) any decree or order for relief in respect of the Company
or any Subsidiary is entered under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution
or liquidation or similar law, whether now or hereafter in effect
(herein called the "BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of
the Company or any Subsidiary, or of any substantial part of the
assets of the Company or any Subsidiary, or commences a voluntary case
under the Bankruptcy Law of the United States or any proceedings
(other than proceedings for the voluntary liquidation and dissolution
of a Subsidiary) relating to the Company or any Subsidiary under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and the
Company or such Subsidiary by any act indicates its approval thereof,
consent thereto or acquiescence therein, or an order, judgment or decree is
entered appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings, and
such order, judgment or decree remains unstayed and in effect for more than
30 days; or
-24-
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than
60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the
stock of a Subsidiary whose assets represent a substantial part, of
the consolidated assets of the Company and its Subsidiaries
(determined in accordance with generally accepted accounting
principles) or which requires the divestiture of assets, or stock of a
Subsidiary, which shall have contributed a substantial part of the
Consolidated Net Earnings of the Company and its Subsidiaries
(determined in accordance with generally accepted accounting
principles) for any of the three fiscal years then most recently
ended, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xiii) any judgment or order, or series of judgments or orders,
for the payment of money in an amount in excess of $5,000,000 is
rendered against the Company or any Subsidiary and either (i)
enforcement proceedings have been commenced by any creditor upon such
judgment or order or (ii) within 30 days after entry thereof, such
judgment is not discharged or execution thereof stayed pending appeal,
or within 30 days after the expiration of any such stay, such judgment
is not discharged; or
(xiv) (a) the Company or any other Person who is a member of the
Company's "control group" (as such term is defined under ERISA) fails
to make all or any portion of a required installment payment under 29
U.S.C. (S)1082(e) with respect to any Plan, (b) the aggregate unpaid
balance of such installment together with the unpaid balance of all
prior installments and other payments due under 29 U.S.C. (S)1082
(including any accrued interest on such amounts) exceeds $1,000,000,
and (c) such amounts remain unpaid for more than 30 days after the due
date of the installment referred to in clause (a); or
(xv) the Company or any of its Affiliates as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal
from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred a withdrawal liability in an annual amount
exceeding $1,000,000; or
(xvi) the Company or any Affiliate breaches or defaults in the
performance of any agreement or instrument creating or evidencing any
Permitted Securitization Program or breaches or defaults in the
performance of any prefunding facility associated therewith, and any
such breach or default continues beyond any applicable period of grace
provided therefor, or any early or accelerated amortization of any
-25-
obligations or rights commences to occur under any such facility
without a replacement facility (on terms consistent with those set
forth in paragraph 6C(9) being effective to provide for replacement
funding therefore;
then (a) if such event is an Event of Default specified in clause (viii), (ix)
-
or (x) of this paragraph 7A with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind (including, without limitation, notice of intent to
accelerate and notice of acceleration of maturity), all of which are hereby
waived by the Company, (b) if such event is an Event of Default specified in
-
clause (i) or (ii) of this paragraph 7A, any Significant Holder that holds a
Note other than the Company or any of its Subsidiaries or Affiliates) as to
which such an Event of Default shall have occurred may at its option during the
continuance of such Event of Default, by notice in writing to the Company,
declare such Note to be, and such Note shall thereupon be and become,
immediately due and payable together with interest accrued thereon and together
with the Yield-Maintenance Amount, if any, with respect to each such Note,
without presentment, demand, protest or notice of any kind (including, without
limitation, notice of intent to accelerate), all of which are hereby waived by
the Company, (c) if such event is any other Event of Default, the Required
-
Holder(s) of the Notes of any Series may at its or their option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes of such Series to be, and all of the Notes of such
Series shall thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if any,
with respect to each Note of such Series, without presentment, demand, protest
or notice of any kind (including, without limitation, notice of intent to
accelerate), all of which are hereby waived by the Company, and (d) if any Note
-
shall have been declared to be due and payable pursuant to clause (b) or (c)
above, any holder of any other Note may at any time thereafter, regardless of
whether any Event of Default shall at such time be continuing, by notice in
writing to the Company, declare all of the Notes held by such holder to be, and
all of the Notes held by such holder shall thereupon be and become, immediately
due and payable together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each such Note, without
presentment, demand, protest or notice of any kind (including, without
limitation, notice of intent to accelerate), all of which are hereby waived by
the Company. The Company acknowledges and the parties hereto agree, that the
holder of each Note has the right to maintain its investment in the Notes free
from repayment by the Company (except as herein specifically provided for) and
the provisions for payment of the Yield-Maintenance Amount by the Company in the
event that the Notes are prepaid or are accelerated as a result of an Event of
Default, are intended to provide compensation for the deprivation of such right
under such circumstances.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes of any Series are declared immediately due and payable and have not been
paid in full, the Required Holder(s) of such Series of Notes may, by notice in
writing to the Company, rescind and annul such declaration and its consequences
if (i) the Company has paid all overdue interest on the Notes, the principal of
and Yield Maintenance Amount, if any, payable with respect to any Notes which
have become due otherwise than by reason of such declaration, and interest on
such overdue interest and overdue principal and Yield-Maintenance Amount at the
rate specified in the Notes, (ii) all Events
-26-
of Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration have been cured or waived pursuant to
paragraph 11C, and (iii) no judgment or decree has been entered for the payment
of any monies due pursuant to the Notes or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or Default
or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
PARAGRAPH 8. REPRESENTATIONS, COVENANTS AND WARRANTIES.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware, each
Subsidiary is duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated, and the Company has and each
Subsidiary has the corporate power to own its respective property and to carry
on its respective business as now being conducted. The execution, delivery and
performance by the Company of this Agreement and the Notes are within the
Company's corporate powers and have been duly authorized by all necessary
corporate action.
8B. FINANCIAL STATEMENTS. The Company has furnished each Purchaser
of any Accepted Notes with the following financial statements, identified by a
principal financial officer of the Company: (i) a consolidated balance sheet of
-
the Company and its Subsidiaries as at December 31 in each of the three fiscal
years of the Company most recently completed prior to the date as of which this
representation is made or repeated to such Purchaser (other than fiscal years
completed within 90 days prior to such date for which audited financial
statements have not been released) and a consolidated statement of income and
statement of cash flows of the Company and its Subsidiaries for each such year,
all certified by the Company's then-current nationally recognized independent
auditing firm; and (ii) consolidated balance sheets of the Company and its
--
Subsidiaries
-27-
as at the end of the quarterly period (if any) most recently completed prior to
such date and after the end of such fiscal year (other than quarterly periods
completed within 45 days prior to such date for which financial statements have
not been released) and the comparable quarterly period in the preceding fiscal
year and consolidated statements of income and statements of cash flows for the
periods from the beginning of the fiscal years in which such quarterly periods
are included to the end of such quarterly periods, prepared by the Company. Such
financial statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to changes
resulting from audits and year-end adjustments), have been prepared in
accordance with generally accepted accounting principles consistently followed
(except as set forth in the notes thereto if consistent with generally accepted
accounting principles and generally accepted auditing standards) throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present the condition of the Company and its
Subsidiaries as at the dates thereof, and the statements of income and
statements of cash flows fairly present the results of the operations of the
Company and its Subsidiaries for the periods indicated. There has been no
material adverse change in the business, condition or operations (financial or
otherwise) of the Company and its Subsidiaries taken as a whole since the end of
the most recent fiscal year for which such audited financial statements have
been furnished.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or administrative
or governmental body which might result in any material adverse change in the
business, condition or operations of the Company and its Subsidiaries taken as a
whole. There is no action, suit, investigation or proceeding pending or
threatened against the Company or any of its Subsidiaries which purports to
affect the validity or enforceability of this Agreement or any Note.
8D. OUTSTANDING DEBT. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by paragraph 6C(2).
There exists no default under the provisions of any instrument evidencing such
Debt or of any agreement relating thereto.
8E. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries and
all of their respective properties and facilities have complied at all times and
in all respects with all federal, state, local and regional statutes, laws,
ordinances and judicial and administrative orders, judgments, rulings and
regulations relating to protection of the environment except, in any such case,
where failure to comply would not result in a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8F. TAXES. The Company has and each of its Subsidiaries has filed
all Federal, State and other income tax returns which, to the best knowledge of
the officers of the Company and its Subsidiaries, are required to be filed, and
each has paid all taxes as shown on such returns and on all assessments received
by it to the extent that such taxes have become due, except such taxes as are
being contested in good faith by appropriate proceedings and for which adequate
reserves
-28-
have been established in accordance with generally accepted accounting
principles.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and adversely
affects its business, property or assets, or financial condition. Neither the
execution nor delivery of this Agreement or the Notes, nor the offering,
issuance and sale of the Notes, nor fulfillment of nor compliance with the terms
and provisions hereof and of the Notes 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 Lien upon any of
the properties or assets of the Company or any of its Subsidiaries pursuant to,
the charter or by-laws of the Company or any of its Subsidiaries, 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 or any of its Subsidiaries is subject. Neither the Company nor any
of its Subsidiaries is a party to, or otherwise subject to any provision
contained in, any instrument evidencing indebtedness of the Company or such
Subsidiary, any agreement relating thereto or any other contract or agreement
(including its charter) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Debt of the Company of the type to be
evidenced by the Notes except as set forth in the agreements listed in Exhibit E
attached hereto.
8H. OFFERING OF NOTES. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than institutional investors, and
neither the Company nor any agent acting on its behalf has taken or will take
any action which would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8I. REGULATION G, ETC. The proceeds of the sale of the Notes will
be used to refinance existing indebtedness or for general corporate purposes.
None of the proceeds of the sale of any Notes will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock" as defined in Regulation G (12 CFR
Part 207) of the Board of Governors of the Federal Reserve System (herein called
"margin stock") or for the purpose of maintaining, reducing or retiring any
indebtedness which was originally incurred to purchase or carry any stock that
is then currently a margin stock or for any other purpose which might constitute
the purchase of such Notes a "purpose credit" within the meaning of such
Regulation G, unless the Company shall have delivered to the Purchaser which is
purchasing such Notes, on the Closing Day for such Notes, an opinion of counsel
satisfactory to such Purchaser stating that the purchase of such Notes does not
constitute a violation of such Regulation G. After applying the proceeds of the
sale of the Notes, not more than 25% of the value of the assets subject to the
terms of ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇(▇), 6C(4) or 6C(5) will be "margin stock." Neither
the Company nor any agent acting on its behalf has taken or will take any action
which might cause this Agreement or the Notes to violate Regulation G,
Regulation T or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
-29-
8J. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the PBGC
has been or is expected by the Company to be incurred with respect to any Plan
(other than a Multiemployer Plan) by the Company or any of its Subsidiaries
which is or would be materially adverse to the Company and its Subsidiaries
taken as a whole. Neither the Company nor any of its Subsidiaries has incurred
or presently expects to incur any withdrawal liability under Title IV of ERISA
with respect to any Multiemployer Plan which is or would be materially adverse
to the Company and its Subsidiaries taken as a whole. No Plan providing welfare
benefits to retired former employees of the Company or any of its Subsidiaries
has been established or is maintained for which the present value of future
benefits payable, in excess of irrevocably designated funds for such purpose, is
materially adverse to the financial condition of the Company and its
Subsidiaries taken as a whole. Either PTE 84-14 or PTE 90-1 applies to the
purchase of the Notes to be purchased by the Purchasers, and the execution and
delivery of this Agreement and the issuance and sale of the Notes will not
involve any transaction which is subject to the prohibitions of section 406 of
ERISA or in connection with which a penalty could be imposed under section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the Code.
The representation by the Company in the next preceding sentence is made in
reliance upon and subject to the accuracy of your representation in paragraph
9B.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes 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 or regulatory body (other than routine filings after the Closing
Day for any Notes with the Securities and Exchange Commission and/or state Blue
Sky authorities) in connection with the execution and delivery of this
Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment
of or compliance with the terms and provisions hereof or of the Notes.
8L. TITLE TO PROPERTIES. The Company has and each of its
Subsidiaries has good and defensible title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the most recent audited balance sheet referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business), subject
to no Lien of any kind except Liens permitted by paragraph 6C(1) except that (i)
with respect to easements and rights of way associated with the Company's gas
gathering systems: (a) the Company has such title as is customary and
appropriate in accordance with applicable industry standards and (b) the costs
of curing defects in such title, if any, would not exceed $10,000,000 in the
aggregate and (ii) no representation or warranty is made with respect to any gas
or mineral property or interest to which no proved oil or gas reserves are
properly attributed. All leases necessary in any material respect for the
conduct of the respective businesses of the Company and its Subsidiaries are
valid and subsisting and are in full force and effect.
8M. HOSTILE TENDER OFFERS. None of the proceeds of the sale of any
Notes will
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be used to finance a Hostile Tender Offer.
8N. DISCLOSURE. Neither this Agreement nor the Offering Materials
nor any other document, certificate or statement furnished to any Purchaser by
or on behalf of the Company in connection herewith contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading. There is no fact
peculiar to the Company or any of its Subsidiaries which materially adversely
affects or in the future may (so far as the Company can now foresee) materially
adversely affect the business, property or assets, or financial condition of the
Company and its Subsidiaries taken as a whole and which has not been set forth
in this Agreement or with respect to any Purchaser, in the Offering Materials
furnished to such Purchaser by or on behalf of the Company prior to the Request
for Purchase of the Accepted Notes to be purchased by such Purchaser. The
financial projections contained in the Offering Materials are reasonable based
on the assumptions stated therein and the best information available to the
officers of the Company.
8O. DELIVERY OF NCNB AGREEMENT. The Company has delivered to each
Purchaser prior to the date hereof a true, correct and complete copy of the NCNB
Agreement, including all amendments and waivers of any provision thereof.
8P. PUBLIC UTILITY HOLDING COMPANY ACT; FEDERAL POWER ACT. Neither
the Company nor any Subsidiary is a "holding company" or a "subsidiary company"
of a "holding company" or a "public utility company" as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended, or, except for
------
Western Power Services, Inc., a "public utility" as such term is defined in the
Federal Power Act, as amended.
PARAGRAPH 9. REPRESENTATIONS OF THE PURCHASERS.
9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents as
follows:
9A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes to
be purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of such Purchaser's property shall at all times be and remain within
its control.
9B. SOURCE OF FUNDS. Each Purchaser represents that at least one of
the following statements concerning each source of funds to be used by it to
purchase any Notes (respectively, the "SOURCE") is accurate as of the Closing
Day with respect to such Notes:
(i) The Source is not an "employee benefit plan" as defined in
Title I, Section 3(3) of ERISA;
(ii) The Source is a "governmental plan" as defined in Title I,
Section 3(32) of ERISA;
-31-
(iii) The Source is an insurance company, but is not a "separate
account" as defined in Title I, Section 3(17) of ERISA;
(iv) The Source is either (a) an insurance company pooled
-
separate account, and the purchase is exempt in accordance with Prohibited
Transaction Exemption (PTE) 90-1 (issued January 29, 1990), or (b) an
-
insurance company "guaranteed contract separate account" entitled to the
exemption granted by PTE 81-82 (issued September 18, 1981) and described in
Department of Labor Advisory Opinion F-2584A (issued September 21, 1983);
(v) The Source is an "investment fund" managed by a "qualified
professional asset manager" or "QPAM" (as defined in Part V of PTE 84-14,
issued March 13, 1984), and the purchase is exempt under PTE 84-14;
provided that no other party to the transactions described in this
Agreement and no "affiliate" of such other party (as defined in Section
V(c) of PTE 84-14) has at this time, and during the immediately preceding
one year, exercised the authority to appoint or terminate said QPAM as
manager of the assets of any plan identified to the Company in writing
pursuant to this clause (v) or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plans; or
(vi) The Source is a plan or a separate account comprised of
plans identified in writing by such Purchaser to the Company pursuant to
this clause (vi).
PARAGRAPH 10. DEFINITIONS.
10. DEFINITIONS. For the purpose of this Agreement, the terms
defined in the introductory sentence and in paragraphs 1 and 2 shall have the
respective meanings specified therein, and the following terms shall have the
meanings specified with respect thereto below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on a quarterly
basis) equal to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, the yield to maturity implied by (a) the yields reported, as of
-
10:00 A.M. (New York City local time)
-32-
on the Business Day next preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page 678" on the Telerate
Service (or such other display as may replace page 678 on the Telerate Service)
for actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date, or
if such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (b) the Treasury Constant Maturity
-
Series yields reported, for the latest day for which such yields shall have been
so reported as of the Business Day next preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
shall be determined, (i) if necessary, by (x) converting U.S. Treasury ▇▇▇▇
-
quotations to bond-equivalent yields in accordance with accepted financial
practice and (y) interpolating linearly between yields reported for various
-
maturities and, (ii) if interest on such Notes is paid quarterly, by converting
all such implied yields to a quarterly payment basis in accordance with accepted
financial practice.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum
- --
of the products obtained by multiplying (a) each Remaining Scheduled Payment of
-
such Called Principal (but not of interest thereon) by (b) the number of years
-
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4A or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
- --
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph 2F.
"ACCEPTANCE DAY" shall have the meaning specified in paragraph 2F.
-33-
"ACCEPTANCE WINDOW" shall have the meaning specified in paragraph 2F.
"ACCEPTED NOTE" shall have the meaning specified in paragraph 2F.
"ADJUSTED CONSOLIDATED DEBT" shall mean Consolidated Debt (excluding
Debt in the amount of the Receivables Investment relating to the Permitted
Securitization Program) plus Excess Working Capital Deficit.
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"AUTHORIZED OFFICER" shall mean (i) in the case of the Company, its
-
Chief Executive Officer, its Chief Financial Officer, its President or the
Executive Vice President-General Counsel of the Company or its Vice President-
Finance or Treasurer and (ii) in the case of Prudential, any officer of
--
Prudential designated as its "Authorized Officer" in the Purchaser Schedule or
any officer of Prudential designated as its "Authorized Officer" for the purpose
of this Agreement in a certificate executed by one of its Authorized Officers.
Any action taken under this Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of the Company and whom Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall be binding on the
Company even though such individual shall have ceased to be an Authorized
Officer of the Company, and any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of Prudential, and whom the Company in good
faith believes to be an Authorized Officer of Prudential at the time of such
action shall be binding on Prudential even though such individual shall have
ceased to be an Authorized Officer of Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified in
paragraph 2A.
"BANK GUARANTY" shall mean each guaranty of a Guarantor in favor of
the banks parties to the NCNB Agreement for which a similar guaranty shall have
been issued to each holder of Notes.
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or authorized to be
closed.
"CANCELLATION DATE" shall have the meaning specified in paragraph
2I(3).
-34-
"CANCELLATION FEE" shall have the meaning specified in paragraph
2I(3).
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
"CLOSING DAY" for any Accepted Note shall mean the Business Day
specified for the closing of the purchase and sale of such Note in the Request
for Purchase of such Note, provided that (i) if the Acceptance Day for such
-
Accepted Note is less than five Business Days after the Company shall have made
such Request for Purchase and the Company and the Purchaser which is obligated
to purchase such Note agree on an earlier Business Day for such closing, the
"CLOSING DAY" for such Accepted Note shall be such earlier Business Day, and
(ii) if the closing of the purchase and sale of such Accepted Note is
--
rescheduled pursuant to paragraph 2H, the Closing Day for such Accepted Note,
for all purposes of this Agreement except paragraph 2I(3), shall mean the
Rescheduled Closing Day with respect to such Closing.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" shall mean any material non-public
information regarding the Company and its Subsidiaries that is provided to any
holder of any Note, any Person who purchases a participation in a Note and any
offeree of a Note or participation therein pursuant to this Agreement other than
information (i) which was publicly known or otherwise known to such holder, such
Person or such offeree at the time of disclosure, (ii) which subsequently
becomes publicly known through no act or omission of such holder, such Person or
such offeree or (iii) which otherwise becomes known to such holder, such Person
or such offeree, other than through disclosure by the Company or any Subsidiary.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified in
paragraph 2F.
"CONSOLIDATED CURRENT ASSETS" shall mean the consolidated current
assets of the Company and its Subsidiaries, as determined in accordance with
generally accepted accounting principles.
"CONSOLIDATED CURRENT LIABILITIES" shall mean the consolidated current
liabilities (including, without limitation, the Debt in respect of the Permitted
Securitization Program) of the Company and its Subsidiaries, as determined in
accordance with generally accepted accounting principles.
"CONSOLIDATED DEBT" shall mean the consolidated Debt of the Company
and its Subsidiaries, determined in accordance with generally accepted
accounting principles.
"CONSOLIDATED NET EARNINGS" shall mean consolidated gross revenues of
the Company and its Subsidiaries including any gains (net of expenses and taxes
applicable thereto)
-35-
resulting from the sale, conversion or other disposition of capital assets
(i.e., assets other than current assets), less all operating and non-operating
---- ----
expenses of the Company and its Subsidiaries including all losses resulting from
the sale, conversion or other disposition of capital assets (i.e., assets other
----
than current assets) and all charges of a proper character (including current
and deferred taxes on income, provision for taxes on unremitted foreign earnings
that are included in gross revenues, and current additions to reserves), but not
including in gross revenues any gains resulting from the write-up of assets, any
equity of the Company or any Subsidiary in the unremitted earnings of any Person
that is not a Subsidiary, any earnings of any Person acquired by the Company or
any Subsidiary through purchase, merger or consolidation or otherwise for any
period prior to the time of acquisition, or any deferred credit representing the
excess of equity in any Subsidiary at the date of acquisition over the cost of
the investment in such Subsidiary, all determined in accordance with generally
accepted accounting principles.
"CONSOLIDATED NET EARNINGS AVAILABLE FOR RESTRICTED PAYMENTS" shall
mean an amount equal to (1) the sum of $50,000,000 plus (2) 50% (or minus 100%
----
in case of a deficit) of Consolidated Net Earnings for the period commencing on
July 1, 1995 and terminating at the end of the last fiscal quarter preceding the
date of any proposed Restricted Payment (taken as one accounting period),
provided, however, that with respect to the fiscal quarter ended December 31,
-------- -------
1995, solely for the purpose of determining the Consolidated Net Earnings
Available for Restricted Payments, there shall be added to Consolidated Net
Earnings the amount of $12,400,000, representing the non-cash loss recognized by
the Company as a result of the adoption of Statement of Financial Accounting
Standard No. 121, less (3) the sum of all Restricted Payments made or declared
----
after June 30, 1995, plus (4) the aggregate amount received by the Company after
----
June 30, 1995, as the net cash proceeds of the sale of any shares of its stock.
There shall not be included in Restricted Payments or in any computation of
Consolidated Net Earnings Available for Restricted Payments (x) dividends paid,
or distributions made, in stock of the Company; or (y) exchanges of stock of one
or more classes of the Company, except to the extent that cash or other value is
involved in such exchange. The term "STOCK" as used in this definition and in
the definition of "Restricted Payments" shall include warrants or options to
purchase stock.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean the consolidated assets
of the Company and its Subsidiaries, less, without duplication, (i) Consolidated
----
Current Liabilities minus Excess Working Capital Deficit, (ii) asset, liability,
contingency and other reserves of the Company and its Subsidiaries, including
reserves for depreciation and for deferred income taxes, (iii) all other
liabilities of the Company and its Subsidiaries, except liabilities for Funded
Debt of the types described in clauses (i), (ii) and (iii) of the definition of
Debt, and (iv) treasury stock, unamortized debt discount and expense, goodwill,
trademarks, brand names, patents, organizational expenses and any other
intangible assets of the Company and its Subsidiaries, and any write-up of the
value of any assets after June 30, 1991, all as determined in accordance with
generally accepted accounting principles; provided, however, that the term
-------- -------
"Consolidated Net Tangible Assets" shall include the book value of long-term gas
contracts with producers that the Company assumes in connection with
acquisitions and that are reflected on the books of the Company as assets.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean consolidated
stockholders' equity
-36-
of the Company and its Subsidiaries, less goodwill, trademarks, brand names,
patents, organizational expenses and any other intangible assets of the Company
and its Subsidiaries, all as determined in accordance with generally accepted
accounting principles; provided, however, that the term "Consolidated Tangible
-------- -------
Net Worth" shall include the book value of long-term gas contracts with
producers that the Company assumes in connection with acquisitions and that are
reflected on the books of the Company as assets.
"COUNTERPARTY" shall mean (i) any Person described in Schedule 6C(8),
(ii) any Person that is not an Affiliate of the Company and that has senior debt
securities rated at least A by Standard & Poor's Rating Group or ▇▇▇▇▇'▇
Investors Service, Inc. or whose obligations in respect of the agreements
described in the final proviso to paragraph 6C(8) or in the definition of Long
Hedge Future or Short Hedge Future, as the case may be, are fully guaranteed by
an affiliate of such Person whose senior debt securities are so rated, and (iii)
any other Person that is not an Affiliate of the Company and with whom the
Company has agreements of the nature described in the final proviso to paragraph
6C(8) or in the definition of Long Hedge Future or Short Hedge Future, so long
as (a) the aggregate amount of all such agreements with such Person outstanding
at any time shall not exceed $1,000,000 and (b) the Company has such agreements
outstanding with no more than nine other such Persons at any time.
"DEBT" shall mean, without duplication:
(i) any obligation that, under generally accepted accounting
principles, is shown on the balance sheet as a liability (including,
without limitation, any obligation for borrowed money, any notes
payable and drafts accepted representing extensions of credit, whether
or not representing obligations for borrowed money, and Capitalized
Lease Obligations but excluding accounts payable and accrued expenses
in the ordinary course of business, reserves for deferred income taxes
and other reserves to the extent that such reserves do not constitute
an obligation),
(ii) any obligation secured by a Lien on, or payable out of
the proceeds of production from, property, whether or not the
obligation secured thereby shall have been assumed by the owner of
such property,
(iii) liabilities in respect of unfunded vested benefits under
Plans and liabilities in respect of postretirement benefits that,
under generally accepted accounting principles in effect at the time
in question, are shown on the balance sheet as a liability, and
(iv) any obligation described in paragraph 6C(10) (Guaranties)
for which a maximum amount is quantifiable.
"DELAYED DELIVERY FEE" shall have the meaning specified in paragraph
2I(2).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as
-37-
amended.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.
"EXCESS WORKING CAPITAL DEFICIT" shall mean (i) if the Company's
Working Capital is greater than or equal to negative $10,000,000, zero, or (ii)
if the Company's Working Capital is less than negative $10,000,000, the product
of (A) the amount of such Working Capital plus $10,000,000 multiplied by (B)
---- -------------
negative one (for example, if Working Capital equals negative $15,000,000, the
Excess Working Capital Deficit would equal $5,000,000). For purposes of this
definition, "WORKING CAPITAL" means the remainder of the Company's Consolidated
Current Assets minus the Company's Consolidated Current Liabilities, excluding
-----
current maturities of Funded Debt.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXISTING NOTES" shall have the meaning specified in paragraph 1A.
"FACILITY" shall have the meaning specified in paragraph 2A.
"FACILITY FEE" shall have the meaning specified in paragraph 2I(1).
"FAIR MARKET VALUE" shall mean, at any time with respect to any
property of any kind or character, the sale value of such property that would be
realized in an arm's-length sale at such time between an informed and willing
buyer and an informed and willing seller, under no compulsion to buy or sell,
respectively.
"FUNDED DEBT" shall mean any Debt payable more than one year from the
date of creation thereof.
"GUARANTOR" shall mean each of Western Gas Resources Storage, Inc., a
Texas corporation; Western Gas Resources Texas, Inc., a Texas corporation;
Western Gas Resources-Oklahoma, Inc., a Delaware corporation; Mountain Gas
Resources, Inc., a Delaware corporation; MGTC, MIGC and each other Subsidiary of
the Company that issues a Guaranty to all of the holders of Notes.
"GUARANTY" shall mean each guaranty of a Guarantor in substantially
the form of Exhibit G hereto.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital stock
of any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership
-38-
of, or rights to acquire, any such shares or equity interests, if such shares,
equity interests, securities or rights are of a class which is publicly traded
on any securities exchange or in any over-the-counter market, other than
purchases of such shares, equity interests, securities or rights representing
less than 5% of the equity interests or beneficial ownership of such corporation
or other entity for portfolio investment purposes, and such offer or purchase
has not been duly approved by the board of directors of such corporation or the
equivalent governing body of such other entity prior to the date on which the
Company makes the Request for Purchase of such Note.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement
substantially in the form of Exhibit H hereto.
"ISSUANCE PERIOD" shall have the meaning specified in paragraph 2B.
"LIEN" shall mean any mortgage, pledge, priority, security interest,
encumbrance, deposit arrangement, lien (statutory or otherwise) or charge of any
kind (including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"LONG HEDGE FUTURE" shall mean an agreement, purchased on a
commodities exchange or entered into with a Counterparty, that obligates the
Company to purchase natural gas or liquid hydrocarbons, as the case may be, at a
pre-determined price at a pre-determined time.
"MGTC" shall mean MGTC, Inc., a Wyoming corporation.
"MIGC" shall mean MIGC, Inc., a Delaware corporation.
"MULTIEMPLOYER PLAN" shall mean any plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NCNB" shall mean NationsBank of Texas, N.A., and its successors and
assigns.
"NCNB AGREEMENT" shall mean (i) from the date hereof to August 31,
1993, the First Restated Loan Agreement, dated as of October 31, 1991, between
the Company and NCNB, as Agent and NCNB and Bankers Trust Company as Co-Managers
of the Acquisition Loan and Certain Banks as Lenders, and (ii) from and after
August 31, 1993, Term Loan Agreement and the Revolving Loan Agreement.
"NOTES" shall have the meaning specified in paragraph 1B.
"OFFERING MATERIALS" shall mean, at the time any representation is
made or deemed made with respect thereto under or pursuant to this Agreement by
the Company, the most recent
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Annual Report on Form 10-K of the Company filed with the Securities and Exchange
Commission prior to such time, the most recent Annual Report to stockholders
sent to stockholders of the Company prior to such time, all Quarterly Reports on
Form 10-Q of the Company filed with the Securities and Exchange Commission prior
to such time for quarterly periods completed after the completion of the fiscal
year covered by such Annual Report on Form 10-K, all quarterly reports to
stockholders sent to stockholders of the Company prior to such time for
quarterly periods completed after the completion of the fiscal year covered by
such annual report to stockholders, all proxy statements, notices and other
reports sent by the Company to its public stockholders prior to such time and
after the end of such fiscal year, all registration statements (without
exhibits) and all reports (including, without limitation, reports on Form 8-K)
filed by the Company with the Securities and Exchange Commission or any
securities exchange or other organization or association supervising trading in
the Company's securities prior to such time and after the end of such fiscal
year, and all press releases issued by the Company prior to such time and after
the end of such fiscal year.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.
"OVER-COLLATERALIZATION AMOUNT" shall have the meaning specified in
the definition of "Permitted Securitization Program."
"PANHANDLE JOINT VENTURE" shall mean the joint venture formed between
the Company and Panhandle Eastern Pipe Line Company.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor entity serving a similar function.
"PERMITTED SECURITIZATION PROGRAM" shall mean a transaction executed
pursuant to documentation that contemplates a commitment which is for a period
of not more than 364 days and which is not extendible at the option of the
Company or any of its Subsidiaries and pursuant to which each of the following
conditions is satisfied:
(a) the Company and the Subsidiaries sell, transfer or otherwise
dispose of, at not less than face value, on a revolving basis, an
undivided interest in a pool of the Company's and the Subsidiaries'
accounts receivable to a special purpose entity (the "SPECIAL PURPOSE
ENTITY"), in an amount not to exceed, at any time $75,000,000 and
grants a security interest of connection therewith with respect to
such accounts receivable which secures an amount not greater than 10%
of the aforesaid amount sold or transferred at such time for the
purpose of providing the purchaser with over-collateralization (the
"OVER-COLLATERALIZATION AMOUNT"); and, as a part of such transaction.
(b) the Company and the Subsidiaries grant a security interest
(the "SECURITY INTEREST") in all or a portion of their accounts
receivable (the "PLEDGED ACCOUNTS RECEIVABLE") to a the Special
Purpose Entity for the purpose of providing
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the Special Purpose Entity with a basis of recourse for its investment
(i.e., the aforesaid amount not to exceed $75,000,000) in the Pledged
Accounts Receivable (the "RECEIVABLES INVESTMENT"), provided that:
--------
(i) the maximum recourse to the Pledged Accounts
Receivable shall be equal to the purchase price of the
Receivables Investment plus 10%, in an aggregate amount not to
exceed Eighty-Two Million Five Hundred Thousand Dollars
($82,500,000) (the "RECOURSE AMOUNT").
(ii) the Security Interest shall apply to each Pledged
Accounts Receivable in an amount not to exceed the proportion
that the Recourse Amount bears to the face value of the Pledged
Accounts Receivable; and
(iii) the Company and the Subsidiaries shall be entitled to
share (with the Special Purpose Entity), on a pari passu and pro
rata basis (based upon the Special Purpose Entity's share
described in clause (ii)), all proceeds (if any) derived from
each Pledged Accounts Receivable.
"PERPETUAL PREFERRED STOCK" shall mean any class of preferred stock of
the Company which has no mandatory provision for partial or complete redemption
at any time.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"PLAN" shall mean an "employee pension benefit plan" (as defined in
section 3 of ERISA) that is or has been established or maintained, or to which
contributions are or have been made, by the Company or by any trade or business,
whether or not incorporated, that, together with the Company, is under common
control, as described in section 414(b) or (c) of the Code.
"PLEDGED ACCOUNTS RECEIVABLE" shall have the meaning specified in the
definition of "Permitted Securitization Program."
"PRICE MOVEMENT" shall have the meaning specified in paragraph 2I(3).
"PRUDENTIAL" shall mean The Prudential Insurance Company of America.
"PRUDENTIAL ACCEPTED NOTES" shall have the meaning specified in
paragraph 2F.
"PRUDENTIAL AFFILIATE" shall mean any corporation or other entity all
of the Voting Stock (or equivalent voting securities or interests) of which is
owned by Prudential either directly or through Prudential Affiliates.
"PTE 84-14" shall mean Prohibited Transaction Exemption 84-14 granted
by the
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Department of Labor pursuant to ERISA.
"PTE 90-1" shall mean Prohibited Transaction Exemption 90-1 granted by
the Department of Labor pursuant to ERISA.
"PURCHASERS" shall mean Prudential and each Prudential Affiliate that
purchases or agrees to purchase any Note.
"RECEIVABLE INVESTMENT" shall have the meaning specified in the
definition of "Permitted Securitization Program".
"RECEIVABLES PURCHASE AGREEMENT" shall mean that certain Receivables
Purchase Agreement dated as of February 28, 1995, among the Company, Receivables
Capital Corporation and Bank of America National Trust and Savings Association,
as the provisions thereof have heretofore been amended or waived or may be from
time to time amended or waived.
"RENEWAL FEE" shall have the meaning specified in paragraph 2B.
"REQUEST FOR PURCHASE" shall have the meaning specified in paragraph
2D.
"REQUIRED HOLDER(S)" shall mean, with respect to the Notes of any
Series, at any time, the holder or holders of at least 66 2/3% of the aggregate
principal amount of the Notes of such Series outstanding at such time.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in
paragraph 2H.
"RESTRICTED PAYMENT" shall mean (a) any dividend paid or declared by
the Company or any Subsidiary on any class of the Company's stock (other than a
dividend payable in shares of stock of the Company), or any other distribution
made by the Company or any Subsidiary on account of any class of the Company's
stock, or (b) any cash or other consideration applied, directly or indirectly,
by the Company or any Subsidiary to the redemption, purchase or other
acquisition of any shares of the Company's stock or (c) any payment of principle
of, or retirement, redemption, purchase or other acquisition of any subordinated
debt.
"REVOLVING LOAN AGREEMENT" shall mean the Loan Agreement (Revolver)
dated August 31, 1993 between the Company and NationsBank of Texas, N.A.
(formerly known as NCNB Texas National Bank), as the provisions thereof have
been or may be from time to time amended or waived in compliance with paragraph
6F.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES" shall have the meaning specified in paragraph 1B.
"SHORT HEDGE FUTURE" shall mean an agreement, purchased on a
commodities
-42-
exchange or entered into with a Counterparty, that obligates the Company to sell
natural gas or liquid hydrocarbons, as the case may be, at a pre-determined
price at a pre-determined time.
"SIGNIFICANT HOLDER" shall mean (i) each Purchaser, so long as such
Purchaser shall hold any Note, (ii) each affiliate of a Purchaser, so long as
such affiliate shall hold any Note, or (iii) any other holder of a Note that,
together with its affiliates, shall hold at least 5% of the aggregate principal
amount of the Notes from time to time outstanding.
"STOCK OPTION AGREEMENTS" shall mean, collectively those certain
Agreements to Provide Loan(s) to exercise key employees' Stock Options by and
among the Company and certain key employees.
"SUBSIDIARY" shall mean any corporation organized under the laws of
any state of the United States of America, Canada, or any province of Canada,
which conducts the major portion of its business in and makes the major portion
of its sales to Persons located in the United States of America or Canada, and
at least a majority of the combined voting power of all classes of Voting Stock
of which shall, at the time as of which any determination is being made, be
owned by the Company either directly or through Subsidiaries. A "WHOLLY OWNED
SUBSIDIARY" shall be a Subsidiary all of the stock of every class of which,
except directors' qualifying shares shall, at the time at which any
determination is being made, be owned by the Company either directly or through
wholly owned subsidiaries.
"TERMINATION DATE" shall have the meaning specified in paragraph 2B.
"TERMINATION EVENT" shall mean (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC
under such regulations), or (ii) the withdrawal of the Company or any of its
ERISA Affiliates from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of proceedings
to terminate a Plan by the PBGC, or (v) any other event or condition that might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
"TERM LOAN" shall mean the $50,000,000 of "Term Loans" outstanding
under the NCNB Agreement as of the date of this Agreement under the terms
existing as of the date of this Agreement.
"TERM LOAN AGREEMENT" shall mean the Third Restated Loan Agreement
(Term) dated August 31, 1993 between the Company and NationsBank of Texas, N.A.
(formerly known as NCNB Texas National Bank) as Agent and Certain Banks as
Lenders.
"TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.
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"VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"1993 NOTE PURCHASE AGREEMENT" shall mean, collectively, those certain
separate Note Purchase Agreements each dated as of April 1, 1993, between the
Company and each of the purchasers listed on Annex 1 thereto, respectively, as
the provisions thereof have heretofore been amended or waived or may be from
time to time amended or waived in compliance with paragraph 6F.
"1995 NOTE PURCHASE AGREEMENT" shall mean, the Note Purchase
Agreements dated as of November 29, 1995, between the Company and the Purchasers
listed on the signature page thereto, as the provisions thereof have heretofore
been amended or waived or may be from time to time amended or waived in
compliance with paragraph 6F.
10C. ACCOUNTING TERMS AND DETERMINATIONS. All references in this
Agreement to "generally accepted accounting principles" shall be deemed to refer
to generally accepted accounting principles in effect in the United States at
the time of application thereof, subject to the next sentence. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with the
audited consolidated financial statements of the Company and its Subsidiaries
delivered pursuant to clause (ii) of paragraph 5A or, if no such statements have
been delivered, the most recent audited financial statements referred to in
clause (i) of paragraph 8B.
PARAGRAPH 11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon, New York City time, on the date due) to the
account or accounts of such Purchaser, if any, as are specified in the Purchaser
Schedule attached hereto, or, in the case of any Purchaser not named in the
Purchaser Schedule or any Purchaser wishing to change the account specified for
it in the Purchaser Schedule such account or accounts in the United States as
such Purchaser may from time to time designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, it will make a
notation thereon (or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon has been paid.
The Company agrees to afford the benefits of this paragraph 11A to any
Transferee which shall have made the same agreement as the Purchasers have made
in this paragraph 11A.
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11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser and
any Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including (i) all
-
document production and duplication charges and the fees and expenses of any
special counsel engaged by the Purchasers or any Transferee in connection with
any subsequent proposed modification of, or proposed consent under, this
Agreement, whether or not such proposed modification shall be effected or
proposed consent granted, and (ii) the costs and expenses, including reasonable
--
attorneys' fees, incurred by any Purchaser or any Transferee in enforcing (or
determining whether or how to enforce) any rights under this Agreement or the
Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the
transactions contemplated hereby or by reason of any Purchaser's or any
Transferee's having acquired any Note (other than costs and expenses incurred in
acquiring or merely holding a Note or interest therein), including without
limitation costs and expenses incurred in any bankruptcy case. The obligations
of the Company under this paragraph 11B shall survive the transfer of any Note
or portion thereof or interest therein by any Purchaser or any Transferee and
the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes of each Series except that, (i) with the written consent of the holders of
-
all Notes of a particular Series, and if an Event of Default shall have occurred
and be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, (ii) without the written consent of the
--
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the provisions
of paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, (iii) with the
---
written consent of Prudential (and not without the written consent of
Prudential) the provisions of paragraph 2 may be amended or waived (except
insofar as any such amendment or waiver would affect any rights or obligations
with respect to the purchase and sale of Notes which shall have become Accepted
Notes prior to such amendment or waiver) and (iv) with the written consent of
--
all of the Purchasers which shall have become obligated to purchase Accepted
Notes of any Series (and not without the written consent of all such
Purchasers), any of the provisions of paragraphs 2 and 3 may be amended or
waived insofar as such amendment or waiver would affect only rights or
obligations with respect to the purchase and sale of the Accepted Notes of such
Series or the terms and provisions of such Accepted Notes. Each holder of any
Note at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
-45-
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term "THIS AGREEMENT"
and references thereto shall mean this Amended and Restated Master Shelf
Agreement as it may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.
The Notes are issuable as registered notes without coupons in denominations of
at least $100,000, except as may be necessary to reflect any principal amount
not evenly divisible by $100,000. The Company shall keep at its principal
office a register in which the Company shall provide for the registration of
Notes and of transfers of Notes. Upon surrender for registration of transfer of
any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees; provided that the Company shall not be required to register any
--------
transfer that was made in violation of the legend appearing on such Note. At
the option of the holder of any Note, such Note may be exchanged for other Notes
of like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making the
exchange is entitled to receive. Each installment of principal payable on each
installment date upon each new Note issued upon any such transfer or exchange
shall be in the same proportion to the unpaid principal amount of such new Note
as the installment of principal payable on such date on the Note surrendered for
registration of transfer or exchange bore to the unpaid principal amount of such
Note. No reference need be made in any such new Note to any installment or
installments of principal previously due and paid upon the Note surrendered for
registration of transfer or exchange. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of
any Note of the loss, theft, destruction or mutilation of such Note and, in the
case of any such loss, theft or destruction, upon receipt of such holder's
unsecured indemnity agreement, or in the case of any such mutilation upon
surrender and cancellation of such Note, the Company will make and deliver a new
Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on and any Yield-Maintenance
Amount payable with respect to such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and the Company shall not be affected
by notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in all or any part of such Note
to any Person on such terms and conditions as may be determined by such holder
in its sole and absolute discretion.
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11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. DISCLOSURE TO OTHER PERSONS; CONFIDENTIALITY. EXCEPT AS PROVIDED
IN THIS PARAGRAPH 11H, EACH HOLDER AND EACH PERSON WHO PURCHASES A PARTICIPATION
IN A NOTE OR ANY PART THEREOF AGREES THAT, PRIOR TO THE OCCURRENCE OF A DEFAULT,
IT WILL USE ITS BEST EFFORTS TO HOLD IN CONFIDENCE AND NOT TO DISCLOSE THE
CONFIDENTIAL INFORMATION. The Company acknowledges that the holder of any Note
may deliver copies of any financial statements and other documents delivered to
such holder, and disclose any other information disclosed to such holder, by or
on behalf of the Company or any Subsidiary in connection with or pursuant to
this Agreement to (i) such holder's directors, officers, employees, agents and
professional consultants, (ii) any other holder of any Note, (iii) any Person to
which such holder offers to sell such Note or any part thereof, (iv) any Person
to which such holder sells or offers to sell a participation in all or any part
of such Note, (v) any federal or state regulatory authority having jurisdiction
over such holder, (vi) the National Association of Insurance Commissioners or
any similar organization or (vii) any other Person to which such delivery or
disclosure may be necessary or appropriate (a) in compliance with any law, rule,
regulation or order applicable to such holder, (b) in response to any subpoena
or other legal process or informal investigative demand, (c) in connection with
any litigation to which such holder is a party or (d) in order to protect such
holder's investment in such Note; PROVIDED THAT PRIOR TO DISCLOSING CONFIDENTIAL
--------
INFORMATION TO ANY OFFEREE REFERRED TO IN CLAUSE (III) AND (IV) ABOVE, SUCH
HOLDER WILL USE ITS BEST EFFORTS TO HAVE SUCH OFFEREE DELIVER TO THE COMPANY A
CONFIDENTIALITY AGREEMENT SUBSTANTIALLY IN THE FORM OF EXHIBIT F HERETO.
11I. NOTICES. All written communications provided for hereunder
(other than communications provided for under paragraph 2) shall be sent by
first class mail or nationwide overnight delivery service (with charges prepaid)
and (i) if to any Person listed in the Purchaser Schedule attached hereto,
-
addressed to it at the address specified for such communications in the
Purchaser Schedule, or at such other address as it shall have specified in
writing to the Person sending such communication, and (ii) if to any Purchaser
--
or holder of any Note which is not a Person listed in the Purchaser Schedule,
addressed to it at such address as it shall have specified in writing to the
Person sending such communication or, if any such holder shall not have so
specified an address, then addressed to such holder in care of the last holder
of such Note which shall have
-47-
so specified an address to the Person sending such communication, and (iii) if
---
to the Company, addressed to it at ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President-General Counsel, Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇ or at such other address as the Company shall have specified to
the holder of each Note in writing; provided, however, that any such
-------- -------
communication to the Company may also, at the option of the Person sending such
communication, be delivered by any other means either to the Company at its
address specified above or to any Authorized Officer of the Company. Any
communication pursuant to paragraph 2 shall be made by the method specified for
such communication in paragraph 2, and shall be effective to create any rights
or obligations under this Agreement only if, in the case of a telephone
communication, an Authorized Officer of the party conveying the information and
of the party receiving the information are parties to the telephone call, and in
the case of a telecopier communication, the communication is signed by an
Authorized Officer of the party conveying the information, addressed to the
attention of an Authorized Officer of the party receiving the information, and
in fact received at the telecopier terminal the number of which is listed for
the party receiving the communication in the case of the Company, as provided
above, and in the case of any Purchaser, as provided in the Purchaser Schedule
or at such other telecopier terminal as the party receiving the information
shall have specified in writing to the party sending such information.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on any Note that is due on a date other than a Business Day shall be
made on the next succeeding Business Day. If the date for any payment is
extended to the next succeeding Business Day by reason of the preceding
sentence, the period of such extension shall be included in the computation of
the interest payable on such Business Day.
11K. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
11L. GOVERNING LAW. THIS AGREEMENT 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.
11M. SEVERABILITY. 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 unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11N. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs
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of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11O. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
11P. BINDING AGREEMENT. When this Agreement is executed and delivered
by the Company and Prudential, it shall become a binding agreement between the
Company and Prudential. This Agreement shall also inure to the benefit of each
other Purchaser which shall have executed and delivered a Confirmation of
Acceptance, and each such other Purchaser shall be bound by this Agreement to
the extent provided in such Confirmation of Acceptance.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement between the
Company and Prudential effective as of January 31, 1996.
Very truly yours,
WESTERN GAS RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Vice President-Finance
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By /s/ THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
-----------------------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By /s/ PRUCO LIFE INSURANCE COMPANY
--------------------------------
Vice President
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