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Western Gas Resources - Limited Waiver, Consent, Release
EXHIBIT 10.14
LIMITED WAIVER, CONSENT, RELEASE AND AMENDMENT NO. 3 TO
SECOND AMENDED AND RESTATED MASTER SHELF AGREEMENT
This LIMITED WAIVER, CONSENT, RELEASE AND AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED MASTER SHELF AGREEMENT (this "Amendment") is entered into as of June 1, 1999, by and among Western Gas Resources, Inc., a Delaware corporation (the "Company"), and The Prudential Insurance Company of America and Pruco Life Insurance Company (together, "Prudential").
PRELIMINARY STATEMENTS
1. The Company and Prudential entered into that certain Second Amended and Restated Master Shelf Agreement dated as of December 19, 1991 (effective January 31, 1996), as amended by Letter Amendment No. 1 dated November 21, 1997 and Letter Amendment No. 2 ("Letter Amendment No. 2") dated March 31, 1999 (as amended, the "Agreement"). Capitalized terms not otherwise defined herein shall have the meanings specified in the Agreement, as amended hereby.
2. In order to secure the Obligations (as defined in the hereinafter defined WGR Canada Guaranty), including the obligations of the Company under the Notes and the Agreement, the Company caused WGR Canada, Inc., a New Brunswick corporation (WGR Canada"), to execute and deliver to Prudential a Guaranty, dated as of May 30, 1997 in favor of Prudential together with all subsequent holders of the Obligations (the "WGR Canada Guaranty").
3. In order to secure the Secured Obligations (as defined in the Pledge Agreement), including the obligations of the Company under the Notes and the Agreement, the Company executed and delivered the Pledge Agreement pursuant to which the Company pledged and granted a security interest to Prudential in, among other things, 1,000 shares of common stock of WGR Canada (the "WGR Canada Pledged Stock").
4. The Company and WGR Canada have requested that Prudential (i) terminate the WGR Canada Guaranty and otherwise grant a general release of WGR Canada under the WGR Canada Guaranty and any other obligations and liabilities arising under all documents and agreements delivered pursuant to the WGR Canada Guaranty or in connection therewith and (ii) release Prudential's security interest in 35% of the total number of issued and outstanding shares of capital stock of WGR Canada under the Pledge Agreement (the "Releases").
5. The Company and Prudential desire to provide for (a) the limited waiver of certain provisions of the Agreement, (b) Prudential's consent and agreement that certain matters relating to the terms of subordinated debt to be offered by Company are to Prudential's satisfaction, and (c) the amendment of the Agreement as specified herein.
6. Prudential is willing to grant the Releases, subject to the condition that the lenders parties to the NCNB Agreement and the holders of the notes issued pursuant to the 1995 Note Purchase Agreement grant similar releases of
the guaranties provided by WGR Canada to such lenders parties to the NCNB Agreement, NCNB and such holders of the notes issued pursuant to the 1995 Note Purchase Agreement and the respective security interests of such lenders parties to the NCNB Agreement, NCNB and such holders of the notes issued pursuant to the 1995 Note Purchase Agreement in 350 shares of common stock of WGR Canada (the "Corresponding Releases").
7. The Company and Prudential wish to amend the Agreement in certain other respects.
8. Prudential is the holder of 100% of the outstanding principal amount of the Notes issued under the Agreement.
In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Waivers, Consents and Releases.
(a) Consent to Certain Subordinated Debt. Subject to the terms and
conditions set forth herein, and in reliance upon the representations
and warranties of the Company contained herein, pursuant to the
definition of the term "Subordinated Debt" and "Subordinated Debt
Guaranties" in paragraph 10B of the Agreement, Prudential hereby
consents and agrees that $155,000,000 of Debt of the Company proposed
to be issued by the Company on the terms provided in that certain
Indenture, draft dated June 3, 1999, among the Company, the Guarantors
and Chase Bank of Texas, N.A. (the "Draft Indenture") and the
guaranties by certain Subsidiaries of the Company of such Debt to be
entered into in connection with the offering of such Debt and on the
terms provided the Draft Indenture will be subordinate in right of
payment to the payment of the Notes and the Guaranties, respectively,
in a manner satisfactory to Prudential, and therefore will constitute
Subordinated Debt and Subordinated Debt Guaranties, provided that the
terms of the final indenture entered into relating to the offering of
such Debt conform in all material respects to the terms provided in the
Draft Indenture.
(b) Releases of WGR Canada and WGRS; Release of Existing MGTC Guaranty.
Prudential hereby releases and discharges, effective as of the
Effective Date, WGR Canada and its successors and assigns from all
obligations and liabilities under the WGR Canada Guaranty and all
documents and agreements delivered pursuant to the WGR Canada Guaranty
or in connection therewith and further hereby terminates the WGR Canada
Guaranty. In addition, Prudential hereby authorizes releases and
discharges 350 shares of common stock of WGR Canada from the liens and
security interests granted by the Company pursuant to the Pledge
Agreement, automatically and without further action by any party. The
Company agrees that it shall, from time to time, execute, acknowledge
and deliver to Prudential instruments, agreements, and other documents
as Prudential shall reasonably request in order to further evidence the
liens and security interests in the 650 shares of common
stock of WGR Canada remaining subject to tho Pledge Agreement,
including delivering to NCNB. as bailee on behalf of the holders of the
Notes, a new certificate and a new stock power evidencing 650 shares of
common stock of WGR Canada.
By its execution of this Amendment, Prudential confirms that,
effective as of the Amendment No. 3 Effective Date, it has released
WGRS from all obligations and liabilities under the Guaranty executed
by WGRS and all documents and agreements delivered pursuant thereto,
provided that each other holder of Senior Debt has also released WGRS
from all obligations and liabilities under all Existing Guaranties
executed by WGRS and all documents and agreements delivered pursuant
thereto.
Prudential hereby releases and discharges, effective as of the
Amendment No. 3 Effective Date MGTC from all obligations and
liabilities under the Existing Guaranty executed by MGTC and all
documents and agreements delivered pursuant thereto, provided that (a)
each other holder of Senior Debt also releases MGTC from all Guaranties
executed by MGTC and all documents and agreements delivered pursuant
thereto, and (b) MGTC delivers the conditional Guaranty described in
Section 17(e) of this Amendment.
(c) Waiver. Prudential hereby waives any Default or Event of Default
arising under either clause (xvii) or clause (xviii) of paragraph 7A of
the Agreement to the extent that any such Default or Event of Default
may be deemed to have arisen out of the releases provided for in this
Section 1 or, in the case of the existing MGTC Guaranty, due to the
failure of MGTC to obtain prior approval of the Wyoming Public Service
Commission with respect to the existing MGTC Guaranty.
(d) Certain Other Documents Satisfactory. Prudential hereby confirms
that the documents delivered pursuant to clauses (x), (xii), (xiii) and
(xiv) of Section IID of Letter Amendment No. 2 are satisfactory to
Prudential in form and substance.
SECTION 2. Amendments.
(a) Amendment to Paragraph SM. Guaranties. Paragraph 5M of the
Agreement is amended by deleting the text reading "the NCNB Agreement,
the Bridge Facility or the 1995 Note Purchase Agreement" and replacing
it with "any Debt" and adding immediately after the words "execute and
deliver a Guaranty" the words and punctuation ", or if such Subsidiary
or entity shall have previously executed and delivered a Guaranty which
has been subsequently released by the Required Holder(s), to execute
and deliver a new Guaranty,"
(b) Amendment to Paragraph 5N. Pledge of Subsidiary Stock. The last
sentence of paragraph 5N of the Agreement is amended and restated in
its entirety to read as follows:
"If, however, after any release described in the preceding
sentence the Company is downgraded below the Minimum Rating,
the Company shall immediately pledge, and cause its
Subsidiaries to pledge, all stock or other equity interests in
all Guarantors, and 65 % (or if the Company shall pledge any
higher percentage of the issued and outstanding capital stock
of WGR Canada to any other Person, then such higher
percentage) of the issued and outstanding capital stock of WGR
Canada, to the holders of the Notes under one or more Pledge
Agreements."
(c) Amendment to Paragraph 6C(5). Merger and Sale of Assets. Paragraph
6C(5) of the Agreement is amended by inserting the word "and" at the
end of clause (vi) thereof, deleting the comma and the word "and" at
the end of clause (vii) thereof, adding a period at the end of clause
(vii) thereof and deleting clause (viii) thereof.
(d) Amendment to Paragraph 6C(7). Limitation on Credit Extension.
Paragraph 6C(7) of the Agreement is amended by deleting the words "have
not executed a Guaranty" and replacing them with the words "are not
Guarantors" and by deleting the words "has executed a Guaranty" and
replacing them with the words "is a Guarantor".
(e) Amendment to Paragraph 6C(10). Guaranties. Paragraph 6C(10) of the
Agreement is hereby amended by inserting the phrase "or such
Subsidiary, as the case may be," after the word "Company" in the
proviso at the end of such paragraph.
(f) Amendment to Paragraph 6E(1). Modifications. Paragraph 6E(1) of the
Agreement is amended, effective of the Amendment No. 3 Effective Date,
in its entirety to read as follows:
"6E(1) Modifications. The Company will not amend or modify (i)
any term or provision of the NCNB Agreement or the 1995 Note
Purchase Agreement so as to change to an earlier date the date
on which any payment of principal is to be made thereunder,
(ii) any term or provision of the NCNB Agreement so as to
shorten the duration or increase the amount of any commitment
thereunder, or (iii) any term or provision of the 1995 Note
Purchase Agreement so as to increase the principal amount
outstanding thereunder or to change to an earlier date the
date on which any payment of principal is to be made
thereunder; provided, that the Company may increase the
interest rate or fees payable under or with respect to the
1995 Note Purchase Agreement or the NCNB Agreement if the
Company complies with the other provisions of
this Agreement, including, without limitation, paragraph
6E(3)."
(g) Waiver Under Paragraph 6E(3). To the extent that clause (v) of
Section 6.2(a) of the NCNB Agreement could be interpreted to require
the execution of an intercreditor agreement due to the issuance of the
Subordinated Debt described in Section 1(a) of this Amendment,
Prudential hereby waives any requirement under the final grammatical
paragraph of paragraph 6E(3) that the holders of such Subordinated Debt
(or the trustee under the indenture described in Section 1(a) of this
Amendment) enter into an intercreditor agreement with the holders of
the Notes.
(h) Amendment to Paragraph 7A. Acceleration. Paragraph 7A of the
Agreement is amended by (I) amending clause (iii) by deleting the
dollar amount "$10,000,000" and replacing it with the dollar amount
"$5,000,000" and (II) adding immediately after the word "Company" in
the clause reading "then (a) if such event is a Event of Default
specified in clause (viii), (ix) or (x) of this paragraph 7A with
respect to the Company" words and punctuation reading ", any Restricted
Subsidiary that is a Significant Subsidiary or a group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary".
(i) Amendment of Paragraph 10B. Other Terms. Paragraph 10B of the
Agreement is amended by (I) amending the following definitions:
(1) the definition of "Guarantor" is amended by deleting the
text and punctuation reading "WGR Canada, Inc., a New
Brunswick corporation;" and adding the words "after the
Amendment No. 3 Effective Date" to the end thereof; and
(2) the definition of "Restricted Payment" is amended by
adding immediately after the text and punctuation reading "any
payment of principal of," the following text and punctuation:
...
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