EXHIBIT 10.21
AMENDMENT NO. 6 TO NOTE PURCHASE AGREEMENT
AMENDMENT NO. 6 TO NOTE PURCHASE AGREEMENTS (this "AMENDMENT") dated as of
January 15, 1998, by and among Western Gas Resources, Inc., a Delaware
corporation (together with its successors and assigns, the "COMPANY"), each of
the Guarantors signatory hereto and each of the Purchasers of Notes listed on
Attachment 1 (collectively, the "EXISTING NOTEHOLDERS") who become signatories
to this Amendment (collectively, the "CONSENTING NOTEHOLDERS").
WITNESSETH:
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WHEREAS, the Company, the Guarantors and the Existing Noteholders have
entered into those separate Note Purchase Agreements, each dated as of April 1,
1993, (as amended and as in effect prior to the effectiveness of this Amendment,
collectively the "EXISTING NOTE AGREEMENT," and, as amended by this Amendment,
collectively the "AMENDED NOTE AGREEMENT") pursuant to which the Company sold
its 7.65% Senior Notes due April 30, 2003 (the "NOTES"), in the aggregate
principal amount of Fifty Million Dollars ($50,000,000);
WHEREAS, the Company, the Guarantors and the Required Holders desire to
amend and restate certain provisions of the Existing Note Agreement;
WHEREAS, following the effectiveness of this Amendment, Amendment No. 1 to
the Note Purchase Agreement dated as of August 31, 1993, Amendment No. 2 to the
Note Purchase Agreement dated as of August 31, 1994, Amendment No. 3 to the Note
Purchase Agreement dated as of March 22, 1995, Amendment No. 4 to the Note
Purchase Agreement dated as of July 14, 1995 and Amendment No. 5 to the Note
Purchase Agreement dated as of December 1, 1997, are superseded by the
amendments and restatements provided herein;
WHEREAS, in consideration for and as a condition precedent to this
Amendment, the Company has agreed to pay to the Existing Noteholders a fee (the
"AMENDMENT FEE") equal to 0.1% of the principal amount of the Notes outstanding
as of May 1, 1998; and
WHEREAS, the capitalized terms used herein and not defined herein shall
have the respective meanings ascribed to them in the Existing Note Agreement.
NOW THEREFORE, upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this Amendment set forth in Section 3 hereof,
and for good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. AMENDMENTS.
Upon the effectiveness of this Amendment, the Existing Note Agreement shall
be amended as set forth in this Section 1.
1.1 AMENDMENT TO SECTION 7 OF THE EXISTING NOTE AGREEMENT.
Section 7 of the Existing Note Agreement is hereby amended and restated in
its entirety to read as follows:
7. COMPANY BUSINESS COVENANTS
The Company covenants that so long as you shall have any obligation to
purchase any Notes hereunder or any of the Notes shall be outstanding:
7.1 PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each Subsidiary to, pay before they
become delinquent,
(a) all taxes, assessments and governmental charges or levies
imposed upon it or its Property, and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, landlords and other like Persons that, if
unpaid, might result in the creation of a Lien upon its Property,
provided, that items of the foregoing description need not be paid
(i) while being contested in good faith and by appropriate
proceedings as long as adequate book reserves (if required by
GAAP) have been established and maintained and exist with respect
thereto, and
(ii) so long as the title of the Company or the Subsidiary,
as the case may be, to, and its right to use, such Property, is
not materially adversely affected thereby.
7.2 MAINTENANCE OF PROPERTIES; INSURANCE; CORPORATE EXISTENCE, ETC.
The Company will, and will cause each Subsidiary to,
(A) PROPERTY -- maintain its Property in good condition, ordinary
wear and tear excepted, and make all renewals, replacements,
additions, betterments and improvements thereto deemed necessary in
the reasonable judgment of the management of the Company;
(B) INSURANCE -- maintain, with Lloyds of London, or financially
sound and reputable insurers accorded a rating by A.M. Best Company of
"A-" or better and a size rating of "X" or better (or a comparable
rating by any comparable successor rating agency), insurance with
respect to its Property and business against such casualties and
contingencies, of such types (including, without limitation, insurance
with respect to losses arising out of Property loss or damage, public
liability, business interruption, larceny, workers'
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compensation, embezzlement or other criminal misappropriation) and in
such amounts as is customary in the case of corporations of
established reputations engaged in the same or a similar business and
similarly situated;
(C) FINANCIAL RECORDS -- keep true books of records and accounts
in which full and correct entries shall be made of all its business
transactions and which will permit the provision of accurate and
complete financial statements in accordance with GAAP;
(D) CORPORATE EXISTENCE AND RIGHTS -- do or cause to be done all
things necessary
(i) to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and
franchises, subject to Section 7.4 hereof, except where the
failure to do so could not reasonably be expected to have a
Material Adverse Effect, and
(ii) to maintain each Restricted Subsidiary as a Restricted
Subsidiary, except as otherwise permitted by Section 7.4 or
Section 12.1 hereof; and
(E) COMPLIANCE WITH LAW -- not be in violation of any law,
ordinance or governmental rule or regulation to which it is subject
(including, without limitation, any Environmental Protection Law) and
not fail to obtain any license, certificate, permit, franchise or
other governmental authorization necessary to the ownership of its
Properties or to the conduct of its business if such violation or
failure to obtain could be reasonably expected to have a Material
Adverse Effect.
7.3 PAYMENT OF NOTES AND MAINTENANCE OF OFFICE.
The Company will punctually pay, or cause to be paid, the principal of
and interest (and Make-Whole Amount, if any) on, the Notes, as and when the
same shall become due according to the terms hereof and of the Notes, and
will maintain an office at the address of the Company set forth in Section
12.2 hereof where notices, presentations and demands in respect hereof or
the Notes may be made upon it. Such office will be maintained at such
address until such time as the Company shall notify the holders of the
Notes of any change of location of such office, which will in any event be
located within the United States of America.
7.4 MERGER; ACQUISITION.
(A) MERGER AND CONSOLIDATION. The Company will not, nor will it
permit any Restricted Subsidiary to, merge into, consolidate with, or
sell, lease, transfer or otherwise dispose of all or substantially all
of its Property to, any other Person or permit any other Person to
consolidate with or merge into it (except that a Restricted Subsidiary
may merge into, consolidate with, or sell,
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lease, transfer or otherwise dispose of all or substantially all of
its assets to, the Company or another Restricted Subsidiary); provided
that the foregoing restriction does not apply to:
I. A merger or consolidation in which the Company is the
surviving corporation, provided that immediately prior to and
immediately after the consummation of such transaction, and after
giving effect thereto, no Default or Event of Default exists or would
exist under any provision of this Agreement.
II. The merger or consolidation of the Company with, or the
sale, lease, transfer or other disposition by the Company of all or
substantially all of its Property to, another corporation, if:
(i) the corporation that results from such merger or
consolidation or that purchases, leases, or acquires all or
substantially all of such Property (the "SURVIVING CORPORATION")
is organized under the laws of the United States of America or
any jurisdiction thereof;
(ii) the due and punctual payment of the principal of and
Make-Whole Amount, if any, and interest on all of the Notes,
according to their tenor, and the due and punctual performance
and observance of all the covenants in the Notes and this
Agreement to be performed or observed by the Company, are
expressly assumed by the Surviving Corporation pursuant to
agreements and instruments reasonably acceptable to the Required
Holders, and the Company will cause to be delivered to each
holder of Notes an opinion of independent counsel to the effect
that such agreements and instruments are enforceable in
accordance with their terms;
(iii) after giving effect to the proposed merger or
consolidation the Surviving Corporation will be engaged in
substantially the same lines of business referred to in Section
2.1 hereof;
(iv) the Notes are not junior in right of payment or
performance to any other Debt of the Surviving Corporation; and
(v) immediately prior to, and immediately after the
consummation of, the transaction, and after giving effect
thereto, no Default or Event of Default exists or would exist
under any provision of this Agreement.
III. The merger or consolidation of a Restricted Subsidiary, if:
(i) such Restricted Subsidiary is the surviving corporation
and remains a Restricted Subsidiary, and
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(ii) immediately prior to, and immediately after the
consummation of, the proposed transaction, and after giving
effect thereto, no Default or Event of Default exists or would
exist under any provision of this Agreement.
(B) SALE OF ASSETS. The Company will not at any time, and will
not at any time permit any Restricted Subsidiary to, sell, lease,
transfer or otherwise dispose of assets, except (1) sales of inventory
and sales or other dispositions of obsolete or worn-out equipment or
delinquent receivables, in each case in the ordinary course of
business, (2) sales, leases, transfers or other dispositions to the
Company or a Wholly-Owned Restricted Subsidiary, (3) sales permitted
by Section 7.4(a) hereof, (4) in any year, sales or other dispositions
of Surplus Equipment having an aggregate book value of less than Two
Million Dollars ($2,000,000), (5) the Panhandle Transaction and (6)
sales of receivables pursuant to Section 7.15 hereof (all sales,
leases, transfers and other dispositions referred to in the foregoing
clauses (1) through (6) are hereinafter referred to as "Excluded
Transfers"); provided that the foregoing shall not apply to the sale
of an asset for a cash consideration to any Person other than an
Affiliate if all of the following conditions are met (collectively,
the "Initial Basket"):
(i) the book value of such asset and the aggregate book
value of each other asset sold (other than in Excluded Transfers)
during the period of three hundred sixty-five (365) consecutive
days immediately preceding the consummation of such sale does not
exceed fifteen percent (15%) of Consolidated Net Tangible
Capitalization measured as of the end of the fiscal quarter of
the Company immediately preceding such sale;
(ii) in the good faith opinion of the Board of Directors
(or management of the Company if the Board of Directors has
authorized management to make such determination, either
generally or in the specific instance), the sale is for Fair
Market Value and is in the best interests of the Company; and
(iii) immediately after the consummation of such sale, and
after giving effect thereto, no Default or Event of Default
exists or would exist under any provision of this Agreement;
provided further, that, in the event that the first exercisable option
to purchase certain assets (the "Option") from the Company or its
Restricted Subsidiaries as defined in and pursuant to that certain
Option and Asset Purchase Agreement dated November 14, 1997, by and
between Mountain Gas Resources, Inc. and the Company and RIS Resources
(USA) Inc. ("Option Agreement") is exercised pursuant to the terms of
the Option Agreement, then, from and after the effective date of the
sale of assets resulting from the exercise of the Option, the Initial
Basket shall not apply to the sale of an asset for a cash
consideration to
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any Person other than an Affiliate, which sale occurs on or before
December 31, 1998, if all of the following conditions are met
(collectively the "Revised Basket"):
(i) the book value of such asset and the aggregate book
value of each other asset sold (other than in Excluded Transfers)
does not exceed either of (x) twenty-five percent (25%) of
Consolidated Net Tangible Capitalization during the period of 730
consecutive days immediately preceding the consummation of such
sale, or (y) twenty percent (20%) of Consolidated Net Tangible
Capitalization during the period of 365 consecutive days
immediately preceding the consummation of such sale, measured, in
each case, as of the end of the fiscal quarter of the Company
immediately preceding such sale;
(ii) in the good faith opinion of the Board of Directors
(or management of the Company if the Board of Directors has
authorized management to make such determination, either
generally or in the specific instance), the sale is for Fair
Market Value and is in the best interests of the Company; and
(iii) immediately after the consummation of such sale, and
after giving effect thereto, no Default or Event of Default
exists or would exist under any provision of this Agreement.
The Revised Basket shall not apply to any sale of an asset
occurring on and after January 1, 1999 or to any sale of an asset at
any time in the event the Option is not exercised, in either of which
cases the Initial Basket shall apply.
For purposes of determining the book value of assets constituting
Restricted Subsidiary Stock being sold as provided in each clause (i)
above, such book value shall be deemed to be the net book value of the
Restricted Subsidiary which shall have issued such Restricted
Subsidiary Stock.
(C) DISPOSAL OF OWNERSHIP OF A SUBSIDIARY. The Company will not
at any time, and will not at any time permit any Restricted Subsidiary
to, sell or otherwise dispose of any shares of the stock (or any
options or warrants to purchase stock or other Securities exchangeable
for or convertible into stock) of a Restricted Subsidiary (said stock,
options, warrants and other Securities herein called "Restricted
Subsidiary Stock"), nor will any Restricted Subsidiary issue, sell or
otherwise dispose of any shares of its own Restricted Subsidiary
Stock, if the effect of the transaction would be to reduce the direct
or indirect proportionate interest of the Company or its other
Subsidiaries in the outstanding Restricted Subsidiary Stock of the
Restricted Subsidiary whose shares are the subject of the transaction,
provided that the foregoing restrictions do not apply to:
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(i) the issue of directors' qualifying shares; and
(ii) the sale for a cash consideration to a Person (other
than directly or indirectly to an Affiliate) of the entire
Investment (whether represented by stock, debt, claims or
otherwise) of the Company and its other Restricted Subsidiaries
in such Restricted Subsidiary, if all of the following conditions
are met:
(A) such sale satisfies the requirements of clause (i)
of Section 7.4(b) of this Agreement;
(B) in the good faith opinion of the Board of Directors
of the Company, the sale is for Fair Market Value and is in
the best interests of the Company;
(C) the Subsidiary being disposed of has no continuing
Investment in any other Subsidiary not being simultaneously
disposed of or in the Company; and
(D) immediately after the consummation of such sale,
and after giving effect thereto, no Default or Event of
Default would exist.
7.5 LIENS.
(A) NEGATIVE PLEDGE. The Company will not, nor will it permit
any Restricted Subsidiary to, cause or permit to exist or agree or
consent to cause or permit to exist in the future (upon the happening
of a contingency or otherwise) any of its Property, whether now owned
or hereafter acquired, to be subject to a Lien except:
(i) Liens securing taxes, assessments or governmental
charges or levies or the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like
Persons, provided that the payment thereof is not at the time
required by Section 7.1 hereof;
(ii) Liens incurred or deposits made in the ordinary course
of business
(A) in connection with worker's compensation,
unemployment insurance, social security and other like laws,
or
(B) to secure the performance of letters of credit,
bids, tenders, sales contracts, leases, statutory
obligations, surety and performance bonds (of a type other
than set forth in Section 7.5(a)(iii)) hereof) and other
similar obligations not incurred in connection with the
borrowing of money, the obtaining of
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advances, the payment of the deferred purchase price of
Property, or a Guaranty;
(iii) Liens on Natural Gas Inventory securing obligations
of the Company, provided that the aggregate amount of Debt
secured by such Liens shall not at any time exceed $35,000,000;
(iv) Liens on Property of a Restricted Subsidiary,
provided that such Liens secure only obligations owing to the
Company or a Wholly-Owned Restricted Subsidiary;
(v) Liens in the nature of reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other similar title exceptions or
encumbrances affecting real property, provided that such
exceptions and encumbrances do not in the aggregate materially
detract from the value of such Properties or materially interfere
with the use of such Property in the ordinary conduct of the
business of the Company and the Restricted Subsidiaries;
(vi) (A) Liens listed in Paragraph V of Annex 3 hereto,
and
(B) Liens securing renewals, extensions (as to time)
and refinancings of Debt secured by the Liens listed on
Annex 3 hereto, provided that the amount of Debt secured by
each of such Liens is not increased in excess of the amount
of Debt outstanding on the date of such renewal, extension
or refinancing, and none of such Liens is extended to
include any additional Property of the Company or any
Restricted Subsidiary;
(vii) Purchase Money Liens;
(viii) Liens on deposit and other bank accounts of the
Company created by the right of a lender under any of the
Company's bank agreements to offset obligations of the Company
owing under such agreement against such accounts, provided,
however, that such Liens shall be permitted hereunder if, and
only if, there is no agreement (other than of the type
contemplated by clause (ix) below) between such lender and the
Company which requires the Company to maintain funds in any
account with such lender;
(ix) Liens on deposits securing the face amount of
outstanding letters of credit issued pursuant to any of the Company's
bank agreements;
(x) Liens securing sales or transfers of receivables
permitted pursuant to Section 7.15 hereof; and
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(xi) other Liens;
provided that the aggregate amount of Debt of the Company secured by
Liens permitted by any one or more of clauses (vi), (vii) and (xi)
above, together with the face amount of undrawn letters of credit with
respect to which the Company is obligated to provide deposits referred
to in clause (ix) above (whether or not such deposits have been
provided) together with Permitted Restricted Subsidiary Debt shall not
at any time exceed an amount in excess of five percent (5.0%) of
Consolidated Tangible Net Worth.
(B) EQUAL AND RATABLE LIEN; EQUITABLE LIEN. In case any Property
shall be subjected to a Lien in violation of this Section 7.5, the
Company will forthwith make or cause to be made, to the fullest extent
permitted by applicable law, provision whereby the Notes will be
secured equally and ratably with all other obligations secured thereby
pursuant to such agreements and instruments as shall be approved by
the Required Holders, and the Company will cause to be delivered to
each holder of a Note an opinion of independent counsel to the effect
that such agreements and instruments are enforceable in accordance
with their terms, and in any such case the Notes shall have the
benefit, to the full extent that, and with such priority as, the
holders of Notes may be entitled under applicable law, of an equitable
Lien on such Property securing the Notes. Such violation of this
Section 7.5 will constitute an Event of Default hereunder, whether or
not any such provision is made pursuant to this Section 7.5(b).
(C) FINANCING STATEMENTS. The Company will not, and will not
permit any Restricted Subsidiary to, sign or file a financing
statement under the Uniform Commercial Code of any jurisdiction that
names the Company or such Restricted Subsidiary as debtor, or sign any
security agreement authorizing any secured party thereunder to file
any such financing statement, except, in any such case, a financing
statement filed or to be filed to perfect or protect a security
interest that the Company or such Restricted Subsidiary is entitled to
create, assume or incur, or permit to exist, under the foregoing
provisions of this Section 7.5 or to evidence for informational
purposes a lessor's interest in Property leased to the Company or any
such Restricted Subsidiary.
(D) LIENS OF SUBSIDIARIES. Each Person that becomes a Subsidiary
after the Closing Date will be deemed to have granted on the date such
Person becomes a Subsidiary all the Liens in existence on its Property
on such date.
7.6 MAINTENANCE OF CONSOLIDATED TANGIBLE NET WORTH.
Consolidated Tangible Net Worth as of the end of each and every fiscal
quarter shall be not less than the sum of
(a) Two Hundred Ten Million Dollars ($210,000,000), plus
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(b) fifty percent (50%) of Consolidated Adjusted Net Income for
each and every fiscal year of the Company, ending after December 31,
1992, in which Consolidated Adjusted Net Income is greater than zero.
7.7 LEVERAGE RATIO.
The Company shall not allow Consolidated Debt to exceed: (i) from
April 30, 1993 through August 30, 1993, sixty percent (60%) of Consolidated
Net Tangible Capitalization; (ii) from August 31, 1993 through March 31,
1994, sixty-five percent (65%) of Consolidated Net Tangible Capitalization;
and (iii) at any time after March 31, 1994, sixty percent (60%) of
Consolidated Net Tangible Capitalization.
7.8 RESTRICTED SUBSIDIARY DEBT.
Neither the Panhandle Joint Venture nor any Restricted Subsidiary will
incur or in any manner become liable in respect of any Debt, provided that
Permitted Restricted Subsidiary Debt may be incurred if, after giving
effect thereto and to any concurrent transactions, no Default or Event of
Default would exist and the aggregate amount of:
(a) Debt of the Company secured by Liens permitted by any one or
more of clauses (vi), (vii) and (xi) of Section 7.5(a) of this
Agreement,
(b) the face amount of undrawn letters of credit with respect to
which the Company is obligated to provide the deposits referred to in
Section 7.5(a)(ix) of this Agreement (whether or not such deposits
have been provided), and
(c) Permitted Restricted Subsidiary Debt,
would not exceed five percent (5%) of Consolidated Tangible Net Worth.
Nothing in this Section 7.8 shall be deemed to limit the ability of any
Restricted Subsidiary to (i) incur Debt in favor of the Company or a
Wholly-Owned Restricted Subsidiary or (ii) guaranty Debt of the Company
owed to a lender which has entered into an intercreditor agreement with the
holders of the Notes to the effect and substantially in the form of Exhibit
E hereto.
7.9 DISTRIBUTIONS; RESTRICTED INVESTMENTS.
The Company will not, nor will it permit any Restricted Subsidiary to,
declare or make or incur any liability to declare or make any Distribution
(other than Distributions payable solely to the Company or another
Restricted Subsidiary) or make any Restricted Investment unless,
immediately after giving effect to the proposed Distribution or Restricted
Investment,
(a) the aggregate amount of Distributions in respect of the
capital stock of the Company and the Restricted Subsidiaries (other
than Distributions payable to the Company or another Restricted
Subsidiary) and Restricted
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Investments made during the period commencing on October 1, 1992 and
ending on the date of such proposed Distribution or Restricted
Investment would not exceed the sum of:
(i) an amount equal to the net proceeds received by the
Company from the sale of its capital stock during the period
subsequent to September 30, 1992, plus,
(ii) fifty percent (50%) of the aggregate of Consolidated
Adjusted Net Income (or, if such Consolidated Adjusted Net Income
shall be a deficit for any fiscal year during such period, minus
one hundred percent (100%) of such deficit) earned on a
cumulative basis during the period commencing on October 1, 1992
and ending on the last day of the fiscal quarter of the Company
most recently ended prior to the declaration of such Distribution
or the making of such Restricted Investment, plus,
(iii) Ten Million Dollars ($10,000,000), and
(b) no Default or Event of Default would exist.
For purposes of this Section 7.9 the amount involved in any Distribution
made in Property shall be the greater of the Fair Market Value of such
Property (as determined in good faith by the Board of Directors) and the
net book value thereof on the books of the Company (determined in
accordance with GAAP) on the date on which such Distribution is made. The
Company will not declare any Distribution which (A) is payable more than
ninety (90) days after the date of declaration thereof or (B) would not be
permitted to be paid on the date of declaration thereof pursuant to this
Section 7.9.
7.10 GUARANTIES.
The Company will not and will not permit any Restricted Subsidiary to
enter into or be party to:
(a) 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
(b) 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
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(c) 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 the payment obligation to the Company
or a Restricted Subsidiary for such materials, supplies or other
property, or the use thereof, or the payment obligation to the Company
or a Restricted Subsidiary for such services, shall be subordinate in
right of payment to any obligation owed or to be owed to any Person,
or
(d) any Guaranty other than Guaranties by Restricted Subsidiaries
of the Debt of the Company permitted by Section 7.8 of this Agreement;
provided, that, notwithstanding the foregoing provisions of this
Section 7.10, the Company may enter into any such contract (i) if the
obligations of the Company thereunder are quantifiable as to maximum
amount, (ii) the obligations guarantied constitute indebtedness of the
primary obligor for borrowed money or payments under a Capital Lease
owed by the primary obligor, and (iii) after giving effect to such
contract no Default or Event of Default would exist.
7.11 FIXED CHARGE COVERAGE
As at the end of each fiscal quarter of the Company, Income Available
for Fixed Charges shall be at least three hundred twenty-five percent
(325%) of Fixed Charges for the period of four consecutive fiscal quarters
of the Company then most recently ended; provided however, that for the
period of four consecutive fiscal quarters ended on each of September 30,
1998 and December 31, 1998, Income Available For Fixed Charges shall be at
least three hundred percent (300%) of Fixed Charges.
7.12 ERISA.
(A) COMPLIANCE. The Company will, and will cause each ERISA
Affiliate to, at all times with respect to each Pension Plan, make
timely payment of contributions required to meet the minimum funding
standard set forth in ERISA or the IRC with respect thereto, and to
comply with all other applicable provisions of ERISA.
(B) RELATIONSHIP OF VESTED BENEFITS TO PENSION PLAN ASSETS. The
Company will not at any time permit the present value of all employee
benefits vested under each Pension Plan to exceed the assets of such
Pension Plan allocable to such vested benefits at such time, in each
case determined pursuant to Section 7.12(c) hereof.
(C) VALUATIONS. All assumptions and methods used to determine
the actuarial valuation of vested employee benefits under Pension
Plans and the present value of assets of Pension Plans will be
reasonable in the good faith judgment of the Company and will comply
with all requirements of law.
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(D) PROHIBITED ACTIONS. The Company will not, and will not
permit any ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as such term
is defined in section 406 of ERISA or section 4975 of the IRC)
that would result in the imposition of a material tax or penalty;
(ii) incur with respect to any Pension Plan any
"accumulated funding deficiency" (as such term is defined in
section 302 of ERISA), whether or not waived;
(iii) terminate any Pension Plan in a manner that could
result in
(A) the imposition of a Lien on the Property of the
Company or any Subsidiary pursuant to section 4068 of ERISA
or
(B) the creation of any liability under section 4062 of
ERISA;
(iv) fail to make any payment required by section 515 of
ERISA; or
(v) except as disclosed on Annex 3 hereto, be an
"employer" (as such term is defined in section 3 of ERISA)
required to contribute to any Multiemployer Plan or a
"substantial employer" (as such term is defined in section 4001
of ERISA) required to contribute to any Multiple Employer Pension
Plan.
7.13 LINE OF BUSINESS.
Neither the Company nor any Restricted Subsidiary will engage in any
business if, as a result thereof, the business of the Company and its
Restricted Subsidiaries, taken as a whole, would not be substantially the
same as on the date of this Agreement.
7.14 TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any Restricted Subsidiary
to, enter into any transaction, including, without limitation, the
purchase, sale or exchange of Property or the rendering of any service,
with any Affiliate, except in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the
Company or such Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
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7.15 SALE OR DISCOUNT OF RECEIVABLES.
Notwithstanding anything else contained in this Note Purchase
Agreement to the contrary, the Company shall be permitted to grant a
security interest in the accounts receivable of the Company and the
Subsidiaries in connection with a Permitted Securitization Program,
provided, however, that the Company and the Subsidiaries may not have more
than one Permitted Securitization Program outstanding at any time.
7.16 OFFERS TO ACQUIRE NOTES.
The Company will not, and will not permit any Restricted Subsidiary,
any Affiliate or any Person, acting on behalf of the Company to, directly
or indirectly, acquire or make any offer to acquire any Notes unless the
Company or such Restricted Subsidiary, Affiliate or other Person shall have
offered to acquire Notes, pro rata, from all holders of the Notes and upon
the same terms. In case the Company acquires any Notes, such Notes will
immediately thereafter be cancelled and no Notes will be issued in
substitution therefor.
7.17 PRIVATE OFFERING.
The Company will not, and will not permit any Person acting on its
behalf to, offer the Notes or any part thereof or any similar Securities
for issuance or sale to, or solicit any offer to acquire any of the same
from, any Person so as to bring the issuance and sale of the Notes within
the provisions of section 5 of the Securities Act.
7.18 NEW GUARANTORS.
The Company shall cause each corporation which becomes a Restricted
Subsidiary after the date of this Agreement (and which on a pro forma basis
accounts for more than ten percent (10%) of Consolidated Adjusted Tangible
Assets) to guaranty the payment and performance of the Notes pursuant to a
guaranty agreement (acceptable to the Required Holders) to the effect and
substantially in the form of Section 10 to this Agreement.
1.2 AMENDMENT TO SECTION 8.2 OF THE EXISTING NOTE AGREEMENT.
Section 8.2 of the Existing Note Agreement is hereby amended and restated
in its entirety to read as follows:
8.2 OFFICERS' CERTIFICATES.
Each set of financial statements delivered to each holder of Notes
pursuant to Section (a) or Section (b) hereof shall be accompanied by a
certificate of the President, the Vice President - Chief Financial Officer
or the Treasurer of the Company setting forth:
14
(A) COVENANT COMPLIANCE -- the information (including reasonably
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 7.4 through
Section 7.11 hereof, inclusive, during the period covered by the
income statement then being furnished (including with respect to each
such Section, where applicable, the calculations of the maximum or
minimum amounts, ratios or percentages, as the case may be,
permissible under the terms of such Sections, and the calculation of
the amounts, ratios or percentages then in existence); and
(B) EVENT OF DEFAULT -- a statement that the signers have
reviewed the relevant terms hereof and have made, or caused to be
made, under their supervision, a review of the transactions and
conditions of the Company and the Subsidiaries from the beginning of
the accounting period covered by the income statements being delivered
therewith to the date of the certificate and that such review has not
disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action the Company has taken or proposes
to take with respect thereto.
1.3 AMENDMENTS TO SECTION 11.1 OF THE EXISTING NOTE AGREEMENT.
Section 11.1 of the Existing Note Agreement is hereby amended and restated
in its entirety to read as follows:
11. INTERPRETATION OF THIS AGREEMENT
11.1 TERMS DEFINED.
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
ADJUSTED FUNDED DEBT -- means, at any time, with respect to any
Person, without duplication,
(a) its liabilities for borrowed money, other than Current Debt;
(b) liabilities secured by any Lien existing on Property owned by
such Person (whether or not such liabilities have been assumed) other
than Current Debt;
(c) its liabilities in respect of Capital Leases;
(d) its liabilities under Guaranties other than Guaranties of
Current Debt; and
15
(e) any other obligations (other than deferred taxes) that are
required to be shown as liabilities on its balance sheet and that are
payable or remain unpaid more than one (1) year from the creation
thereof;
at such time.
ADJUSTED TANGIBLE ASSETS -- in respect of any Person at any time means
all assets (including, without duplication, the capitalized value of any
leasehold interest under any Capital Lease and all Asset Agreements) of
such Person except:
(a) deferred assets, other than
(i) prepaid insurance,
(ii) prepaid taxes and
(iii) prepaid items the benefits of which will be realized
by such Person within three hundred and sixty-five (365) days of
such time;
(b) patents, copyrights, trademarks, trade names, franchises,
goodwill, experimental expense and other similar intangible assets;
(c) unamortized debt discount and expense; and
(d) assets located, and notes and receivables due from obligors
domiciled, outside the United States of America, Puerto Rico or
Canada.
AFFILIATE -- means, at any time, a Person (other than a Restricted
Subsidiary)
(a) that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
Control with, the Company,
(b) that beneficially owns or holds five percent (5%) or more of
any class of the Voting Stock of the Company, or
(c) five percent (5%) or more of the Voting Stock (or in the case
of a Person that is not a corporation, five percent (5%) or more of
the equity interest) of which is beneficially owned or held by the
Company or a Subsidiary,
at such time.
16
As used in this definition,
Control -- means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by
contract or otherwise.
AGREEMENT, THIS -- means this agreement, as it may be amended and
restated from time to time.
APPLICABLE H.15 -- means, at any time, United States Federal Reserve
Statistical Release H.15(519) or its successor publication most recently
published and available to the public at such time, or if no such successor
publication is available, then any other source of current information in
respect of interest rates on securities of the United States of America
that is generally available and, in the judgment of the Required Holders,
provides information reasonably comparable to the H.15(519) report.
ASSET AGREEMENTS -- of any Person means all oil and gas leases,
mineral leases and gas purchase contracts which have been assumed by such
Person in connection with any acquisition of any other Person and which
would be shown as assets on a consolidated balance sheet of such Person
prepared in accordance with GAAP.
BANKRUPTCY LAW -- means any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law, whether now or hereafter in effect, of any jurisdiction.
BOARD OF DIRECTORS -- means, at any time, the board of directors of
the Company or any committee thereof which, in the instance, shall have the
lawful power to exercise the power and authority of such board of
directors.
BUSINESS DAY -- means, at any time, a day other than a Saturday, a
Sunday or, in the case of any Note with respect to which the provisions of
Section 4.1 hereof are applicable, a day on which the bank designated (by
the holder of such Note) to receive (for such holder's account) payments on
such Note is required by law (other than a general banking moratorium or
holiday for a period exceeding four (4) consecutive days) to be closed.
CAPITAL LEASE -- means any lease with respect to which GAAP requires
the lessee to recognize the acquisition of an asset and the incurrence of a
liability.
CLOSING -- Section 1.2.
CLOSING DATE -- Section 1.2.
17
COMPANY -- has the meaning specified in the introductory sentence
hereof.
CONFIDENTIAL INFORMATION -- means any material non-public information
regarding the Company and its Subsidiaries that is provided to any holder
of any Note or any offeree of a Note pursuant to this Agreement, other than
information
(a) which was publicly known or otherwise known to such holder or
such offeree at the time of disclosure,
(b) which subsequently becomes publicly known through no act or
omission of such holder or such offeree or
(c) which otherwise becomes known to such holder or such offeree,
other than through disclosure by the Company or any Subsidiary.
CONSOLIDATED ADJUSTED FUNDED DEBT -- at any time, means the Adjusted
Funded Debt of the Company and its Restricted Subsidiaries at such time on
a consolidated basis.
CONSOLIDATED ADJUSTED NET INCOME -- for any fiscal period means net
earnings after income taxes of the Company and the Restricted Subsidiaries
determined on a consolidated basis, but excluding:
(a) any gain or loss arising from the sale of capital assets;
(b) any gain arising from any write-up of assets;
(c) earnings of any Restricted Subsidiary accrued prior to the
date it became a Restricted Subsidiary;
(d) earnings of any Person, substantially all the assets of which
have been acquired in any manner, realized by such other Person prior
to the date of such acquisition;
(e) net earnings of any Person (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary shall
have an ownership interest unless such net earnings shall have
actually been received by the Company or such Restricted Subsidiary in
the form of cash distributions;
(f) any portion of the net earnings of any Restricted Subsidiary
that for any reason is unavailable for payment of dividends to the
Company or any other Restricted Subsidiary;
18
(g) the earnings of any Person to which assets of the Company
shall have been sold, transferred or disposed of after the date of
such transaction;
(h) any gain arising from the acquisition of any Securities of
the Company or any Restricted Subsidiary; and
(i) any portion of the net earnings of the Company that cannot be
freely converted into United States dollars.
CONSOLIDATED ADJUSTED TANGIBLE ASSETS -- means at any time the net
book value (after deducting related depreciation, obsolescence,
amortization, valuation and other proper reserves) at which the Adjusted
Tangible Assets of the Company and the Restricted Subsidiaries would be
shown on a consolidated balance sheet of such Persons at such time, but
excluding any amount on account of write-ups of assets after December 31,
1992.
CONSOLIDATED DEBT -- means, at any time, the Debt of the Company and
its Restricted Subsidiaries on a consolidated basis at such time.
CONSOLIDATED NET TANGIBLE CAPITALIZATION -- means, at any time, (i)
Consolidated Adjusted Tangible Assets, less (ii) Restricted Investments,
less (iii) all items which would appear on the liability side of a balance
sheet (other than deferred liabilities, shareholders' equity, minority
interests in Subsidiaries and Adjusted Funded Debt) in each case as such
items would be shown on a consolidated balance sheet of the Company and its
Restricted Subsidiaries at such time.
CONSOLIDATED TANGIBLE NET WORTH -- means, at any time, Consolidated
Net Tangible Capitalization less (to the extent included in the computation
----
of Consolidated Net Tangible Capitalization) deferred liabilities and
Consolidated Adjusted Funded Debt at such time.
CURRENT DEBT -- means, at any time, with respect to any Person
(i) all liabilities for borrowed money and all liabilities
secured by any Lien existing on Property owned by such Person whether
or not such liabilities have been assumed, that, in either case are
payable on demand or within one (1) year from such time, except:
(a) any such liabilities which are renewable or extendible
at the option of such Person to a date more than one (1) year
from such time, and
(b) any such liabilities that, although payable within one
(1) year, constitute payments required to be made on
19
account of principal of indebtedness expressed to mature more
than one (1) year from such time, and
(ii) its liabilities under Guaranties of obligations described in
(i) above.
DEBT -- means, with respect to any Person, at any time, without
duplication, all Adjusted Funded Debt and Current Debt of such Person at
such time.
DEFAULT -- means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
DISTRIBUTION -- means, in respect of any corporation:
(a) dividends or other distributions in respect of the capital
stock, or any rights or warrants to purchase such stock, of such
corporation (except distributions in such stock, or rights or warrants
pertaining thereto); and
(b) the redemption or acquisition of such stock or of warrants,
rights or other options to purchase such stock (except when solely in
exchange for stock whether pursuant to a conversion right or
otherwise) unless made, contemporaneously, from the net proceeds of a
sale of such stock.
ENVIRONMENTAL PROTECTION LAW -- means any federal, state, county,
regional or local law, statute, or regulation (including, without
limitation, CERCLA, RCRA and XXXX) enacted in connection with or relating
to the protection or regulation of the environment, including, without
limitation, those laws, statutes, and regulations regulating the disposal,
removal, production, storing, refining, handling, transferring, processing,
or transporting of Hazardous Substances, and any regulations, issued or
promulgated in connection with such statutes by any Governmental Authority
and any orders, decrees or judgments issued by any court of competent
jurisdiction in connection with any of the foregoing.
As used in this definition:
CERCLA -- means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time
(by XXXX or otherwise), and all rules and regulations promulgated in
connection therewith;
20
RCRA -- means the Resource Conservation and Recovery Act of 1976,
as amended from time to time, and any rules and regulations issued in
connection therewith; and
XXXX -- means the Superfund Amendments and Reauthorization Act of
1986, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA AFFILIATE -- means any corporation or trade or business that
(i) is a member of the same controlled group of corporations
(within the meaning of section 414(b) of the IRC) as the Company, or
(ii) is under common control (within the meaning of section
414(c) of the IRC) with the Company.
EVENT OF DEFAULT -- Section 9.1.
EXCHANGE ACT -- shall mean the Securities Exchange Act of 1934, as
amended.
FAIR MARKET VALUE -- means, at any time with respect to any Property,
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.
FIXED CHARGES -- for any period shall mean, the sum of (i) all
interest on Debt paid or payable during such period (including the portion
of rent under Capital Leases which is allocable to interest), and (ii) all
debt discount and expense amortized or required to be amortized during such
period, in each case by the Company and its Restricted Subsidiaries on a
consolidated basis during such period.
FOREIGN PENSION PLAN -- means any plan, fund or other similar program
(a) established or maintained outside of the United States of
America by any one or more of the Company or the Subsidiaries
primarily for the benefit of the employees (substantially all of whom
are aliens not residing in the United States of America) of the
Company or such Subsidiaries which plan, fund or other similar program
provides for retirement income for such employees or results in a
deferral of income for such employees in contemplation of retirement
and
(b) not otherwise subject to ERISA.
21
GAAP -- means accounting principles as promulgated from time to time
in statements, opinions and pronouncements by the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board
and in such statements, opinions and pronouncements of such other entities
with respect to financial accounting of for-profit entities as shall be
accepted by a substantial segment of the accounting profession in the
United States.
GOVERNMENTAL AUTHORITY -- means
(a) the government of
(i) the United States of America and any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Restricted
Subsidiary conducts all or any part of its business, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
GUARANTORS -- means, individually and collectively, Western Gas
Resources Storage, Inc., a Texas corporation, Western Gas Resources-Texas,
Inc., a Texas corporation, Western Gas Resources-Oklahoma, a Delaware
corporation, MGTC, Inc., a Wyoming corporation, MIGC, Inc., a Delaware
corporation, Mountain Gas Resources, Inc., a Delaware corporation any other
Persons who may from time to time become guarantors pursuant to Section
7.18 of this Agreement.
GUARANTIED OBLIGATIONS -- Section 10.1(a).
GUARANTY -- means with respect to any Person (for the purposes of this
definition, the "Guarantor") any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person (the
"Primary Obligor") in any manner, whether directly or indirectly, including
(without limitation) obligations incurred as a partner or joint venturer,
or through an agreement, contingent or otherwise, by the Guarantor:
(a) to purchase such indebtedness or obligation or any Property
or assets constituting security therefor;
(b) to advance or supply funds
22
(i) for the purpose of payment of such indebtedness or
obligation, or
(ii) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary
Obligor or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease Property or to purchase Securities or other Property
or services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to
make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or
obligation of the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty, in connection with
any computation of indebtedness or other liability, it shall be assumed
that the indebtedness or other liabilities that are the subject of such
Guaranty are direct obligations of the issuer of such Guaranty.
HAZARDOUS SUBSTANCES -- means any and all pollutants, contaminants,
toxic or hazardous wastes or any other substances that might pose a hazard
to health or safety, the removal of which may be required or the
generation, manufacture, refining, production, processing, treatment,
storage, handling, transportation, transfer, use, disposal, release,
discharge, spillage, seepage, or filtration of which is or shall be
restricted, prohibited or penalized by any applicable law (including,
without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
INCOME AVAILABLE FOR FIXED CHARGES -- for any period shall mean,
Consolidated Adjusted Net Income for such period plus (to the extent
deducted in computing Consolidated Adjusted Net Income for such period)
income taxes, Fixed Charges, depreciation and amortization.
INSTITUTIONAL INVESTOR -- means the Purchasers, any affiliate of any
of the Purchasers, and any holder of Notes that is an "accredited investor"
as defined in section 2(15) of the Securities Act.
IRC -- means the Internal Revenue Code of 1986, together with all
rules and regulations promulgated pursuant thereto, as amended from time to
time.
IRS -- means the Internal Revenue Service and any successor agency.
LIEN -- means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including but
not
23
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes, and the filing of any financing statement
under the Uniform Commercial Code of any jurisdiction, or an agreement to
give any of the foregoing. The term "Lien" includes reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
real property and includes, with respect to stock, stockholder agreements,
voting trust agreements, buy-back agreements and all similar arrangements.
For the purposes hereof, the Company and each Subsidiary is deemed to be
the owner of any Property that it shall have acquired or holds subject to a
conditional sale agreement, Capital Lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other
Person for security purposes, and such retention or vesting is deemed a
Lien. The term "Lien" does not include negative pledge clauses in
agreements relating to the borrowing of money. For purposes of
clarification, the Option does not constitute a Lien.
MAKE-WHOLE AMOUNT -- means, at any time with respect to a principal
amount of Notes becoming due in whole or in part, and whether by
prepayment, acceleration or otherwise, the greater of
(a) Zero Dollars ($0), if the Make-Whole Discount Rate equals or
exceeds 7.65% per annum, or
(b) if the Make-Whole Discount Rate is less than 7.65% per annum,
then
(i) the sum of the present values of the then remaining
scheduled payments of principal and interest that would be
payable in respect of such principal amount but for such
prepayment or acceleration, minus
(ii) such principal amount and the amount of interest
accrued on such principal amount since the then most nearly
preceding scheduled interest payment date.
In determining such present values, a discount rate equal to the Make-Whole
Discount Rate divided by two (2), and a discount period of six (6) months
of thirty (30) days each, shall be used. As used in this definition,
Applicable H.15 -- means, at any time, United States Federal
Reserve Statistical Release H.15(519) or its successor publication
most recently published and available to the public at such time, or
if no such successor publication is available, then any other source
of current information in respect of interest rates on securities of
the United States of America that is generally available and, in the
judgment of the
24
Required Holders, provides information reasonably comparable to the
H.15(519) report.
Make-Whole Discount Rate -- means, at any time, with respect to a
principal amount of Debt being prepaid or accelerated:
(a) the per annum percentage rate (rounded to the nearest
three decimal places) equal to the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York
City time) on the date two Business Days prior to the date
of such prepayment or acceleration, as the case may be, (as
reported on the Telerate Service, the Bloomberg Financial
Markets System or any other nationally recognized trading
screen, reasonably selected by the Required Holders,
reporting on-line intraday trading in United States
government Securities) for actively traded U.S. Treasury
securities having a maturity equal to the Weighted Average
Life to Maturity of the principal amount of the Debt then
being prepaid or accelerated, or, if such yields shall not
be reported as of such time or the yields reported as of
such time shall not be ascertainable,
(ii) the annual yield to maturity at such time of the
United States Treasury obligation listed in the then most
recently available Applicable H.15 for the then most recent
available day in such Applicable H.15 with a Treasury
Constant Maturity (as such term is defined in such
Applicable H.15) equal to the Weighted Average Life to
Maturity of the principal amount of the Debt then being
prepaid or accelerated,
plus
(b) one-half of one percent (0.50%) per annum.
For purposes of clause (a)(i) and clause (a)(ii) of the preceding
sentence, if no United States Treasury obligation with a maturity
corresponding exactly to the Weighted Average Life of the Debt being
prepaid or accelerated is listed, yields for the two (2) published
maturities most closely corresponding to such scheduled maturity shall
be calculated pursuant to the immediately preceding sentence and the
Make-Whole Discount Rate shall be linearly interpolated from such
yields.
25
Remaining Dollar-Years -- means, at any time, with respect to a
principal amount of indebtedness being prepaid or accelerated, the
result obtained by
(a) multiplying
(i) an amount equal to the then remaining scheduled
payments of principal (including payment at maturity) that
would be payable in respect of the principal amount of the
indebtedness being so prepaid or accelerated but for such
prepayment or acceleration, by
(ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such time and the date
each such required principal payment would be due if such
prepayment or acceleration had not occurred, and
(b) calculating the sum of each of the products obtained in
the preceding subsection (a).
Weighted Average Life to Maturity -- means, at any time, with
respect to a principal amount of Debt being prepaid or accelerated,
the number of years obtained by dividing the Remaining Dollar-Years of
such principal amount, determined at such time, by such principal
amount.
MARGIN SECURITY -- means "margin stock" and "margin security" within
the meaning of Regulations U, T, and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II, as amended from time to
time.
MATERIAL ADVERSE EFFECT -- shall mean a material adverse effect on the
ability of the Company to perform its obligations under this Agreement or
the Notes, or a material adverse effect upon the business, properties,
prospects, profits or condition (financial or otherwise) of the Company and
the Restricted Subsidiaries, taken as a whole.
MULTIEMPLOYER PLAN -- means any multiemployer plan (as defined in
section 3(37) of ERISA) in respect of which the Company or any ERISA
Affiliate is an "employer" (as such term is defined in section 3 of ERISA).
MULTIPLE EMPLOYER PENSION PLAN -- means any employee benefit plan
within the meaning of section 3(3) of ERISA (other than a Multiemployer
Plan), subject to Title IV of ERISA, to which the Company or any ERISA
Affiliate and an employer (as such term is defined in section 3 of ERISA)
other than an ERISA Affiliate or the Company contribute.
26
NATURAL GAS INVENTORY -- means, at any time, the natural gas owned by
the Company and its Restricted Subsidiaries and held in storage at such
time.
NOTE -- Section 1.1.
NOTE PURCHASE AGREEMENT -- Section 1.2.
OPTION -- Section 7.4(b).
OPTION AGREEMENT -- Section 7.4(b).
OTHER PURCHASER -- Section 1.2.
PANHANDLE JOINT VENTURE -- shall mean the joint venture formed as a
result of the Panhandle Transaction.
PANHANDLE TRANSACTION -- shall mean the Company's initial investment
in a joint venture to be formed between the Company and Panhandle Eastern
Pipe Line Company or an affiliate thereof ("PEPL"), which will consist of:
(i) the contribution by the Company of its Xxxxxxx Gas Plant and related
Vega, Fisher, Longdale and Xxxxx gathering systems, which collectively have
a book value of $13,871,891 as of February 28, 1993; and (ii) the
construction by the Company of certain pipeline and compression facilities
for the joint venture and the modification of certain assets to be
contributed by PEPL, at an aggregate cost estimated at $9,000,000. PEPL
will contribute its Xxxxx/Waynoka, NE Xxxxxxx and Canton/Cedardale
gathering systems to the joint venture. The Company and PEPL will each
have a fifty percent (50.0%) ownership interest in the joint venture.
PBGC -- means the Pension Benefit Guaranty Corporation and any
successor corporation or governmental agency.
PENSION PLAN -- means, at any time, any "employee pension benefit
plan" (as such term is defined in section 3 of ERISA) maintained at such
time by the Company or any ERISA Affiliate for employees of the Company or
such ERISA Affiliate, excluding any Multiemployer Plan, but including,
without limitation any Multiple Employer Pension Plan.
PERMITTED RESTRICTED SUBSIDIARY DEBT -- means
(a) unsecured Debt of a Restricted Subsidiary other than (i) Debt
in favor of the Company or a Wholly-Owned Restricted Subsidiary or
(ii) any Guaranty of Debt of the Company owed to a lender which has
entered into an intercreditor agreement with the holders of the Notes
to the effect and substantially in the form of Exhibit E hereto, and
27
(b) Debt of a Restricted Subsidiary secured by a lien permitted
by any one or more of clauses (vi)B, (vii), (ix) and (xi) of Section
7.5(a) of this Agreement.
PERMITTED SECURITIZATION PROGRAM -- means a transaction or series of
transactions pursuant to which:
(a) The Company and 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, in an amount not to
exceed, at any time Seventy-Five Million Dollars ($75,000,000), plus
ten percent (10%) of the amount sold or transferred at such time for
the purpose of providing the purchaser with over-collateralization;
and
(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 special purpose
entity (the "Special Purpose Entity") for the purpose of providing the
Special Purpose Entity with a basis of recourse for its investment 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 ten percent (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
Account Receivable in an amount not to exceed the proportion that
the Recourse Amount bears to the aggregate 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 purchaser's share described in clause
(ii)), all proceeds (if any) derived from each Pledged Accounts
Receivable.
PERSON -- means an individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political
subdivision thereof.
PLACEMENT MEMORANDUM -- Section 2.1.
PROPERTY -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
28
PURCHASE MONEY LIEN -- means
(a) a Lien held by any Person (whether or not the seller of such
assets) on tangible Property (or a group of related items of Property
the substantial portion of which are tangible) acquired or constructed
by the Company or any Subsidiary, which Lien secures all or a portion
of the related purchase price or construction costs of such Property,
provided that such Purchase Money Lien
(i) encumbers only Property acquired after the Closing
Date and acquired with the proceeds of the Debt secured thereby,
and
(ii) attaches to such Property within six months of the
date such property is first acquired, and
(iii) does not encumber any other Property, and
(iv) does not secure an amount of Debt greater than the
cost or Fair Market Value (whichever is less) of the encumbered
Property; and
(b) any Lien existing on real Property of any corporation at the
time it becomes a Subsidiary, or any Lien on Property acquired by the
Company or a Subsidiary which was in existence prior to the time such
Property was so acquired, provided that
(i) no such Lien shall extend to or cover any Property
other than the Property subject to such Lien at the time of any
such transaction, and
(ii) such Lien was not created in contemplation of any such
transaction.
PURCHASER -- means the Persons listed as purchasers of Notes on Annex
1 hereto.
REQUIRED HOLDERS -- means, at any time, the holders of at least sixty-
six and two-thirds percent (66 2/3%) in principal amount of the Notes at
the time outstanding (exclusive of Notes then owned by any one or more of
the Company, any Restricted Subsidiary, any Affiliate and any officer or
director of any thereof).
RESPONSIBLE OFFICER -- shall mean the chief executive officer, chief
financial officer, president, general counsel or treasurer of the Company.
29
RESTRICTED INVESTMENTS -- means at any time all investments, made in
cash or by delivery of Property or otherwise, by the Company and the
Restricted Subsidiaries (x) in any Person, whether by acquisition of stock,
indebtedness or other obligation or Security, or by loan, Guaranty, advance
or capital contribution, or otherwise, or (y) in any Property (items (x)
and (y) herein called "Investments"), except the following:
(a) Investments in one or more Restricted Subsidiaries or any
corporation that becomes a Restricted Subsidiary concurrently with
such Investment;
(b) Investments in Property used or to be used in the ordinary
course of business of the Company and the Restricted Subsidiaries as
referred to in Section 2.1 of this Agreement;
(c) Investments in current assets arising from the sale of goods
and services in the ordinary course of business of the Company and the
Restricted Subsidiaries;
(d) Investments in direct obligations of the United States of
America, or any agency thereof or obligations guaranteed by the United
States of America, provided that such obligations mature within three
(3) years from the date of acquisition thereof;
(e) Investments in certificates of deposit and/or bankers'
acceptances, in each case maturing within three hundred sixty-five
(365) days from the date of acquisition and issued by a bank or trust
company organized under the laws of the United States of America,
Canada, Japan or a nation which is a member of the European Economic
Community, which bank at the time of the acquisition such Investment
shall be rated B or better by IBCA or B or better by Xxxxxxxx Bank
Watch;
(f) Investments in commercial paper rated A-1 by Standard &
Poor's Corporation or P-1 by Xxxxx'x Investors Service, Inc. and
maturing not more than two hundred seventy (270) days from the date of
acquisition thereof;
(g) Investments in readily marketable and tax-exempt direct
obligations of any State of the United States of America or a
Governmental Authority located in the United States of America having
at all times a credit rating of at least Aa by Xxxxx'x Investors
Service, Inc. or AA or SP-2 by Standard and Poor's Corporation, in
each case due within three years from the making of such Investment;
(h) Investments in money market investment programs which are
classified as current assets in accordance with GAAP and which are
30
administered by a financial institution having capital, surplus and
undivided profits of at least One Hundred Million Dollars
($100,000,000), provided that each such program invests solely in
Investments of the types described in clause (d), clause (e), clause
(f), and clause (g) above and has assets in excess of One Hundred
Million Dollars ($100,000,000);
(i) Investments in money market or auction rate preferred stock
rated A or better by Standard and Poor's Corporation or a or better by
Xxxxx'x Investors Service;
(j) Investments in the equity of corporations or partnerships
which have as their principal business (i) gas gathering, processing
and transmission, (ii) oil and gas production and storage, or (iii)
gas marketing and related activities, provided that the aggregate
amount of Investments made pursuant to this clause (j) (other than
investments allowed by clause (a) above) shall not at any time exceed
ten percent (10%) of Consolidated Net Tangible Capitalization;
(k) Loans to officers and other key employees of the Company or a
Restricted Subsidiary to enable such individuals to exercise options
to purchase capital stock of the Company; and
(l) the Panhandle Transaction.
Investments shall be valued at cost less any net return of capital through
the sale or liquidation thereof or other return of capital thereon.
RESTRICTED SUBSIDIARY -- means a corporation,
(a) organized under the laws of the United States, Puerto Rico or
Canada or a jurisdiction thereof,
(b) that conducts substantially all of its business and has
substantially all of its Property within the United States, Puerto
Rico and Canada, and
(c) at least eighty percent (80%) (by number of votes) of each
class of Voting Stock of which and one hundred percent (100%) of all
other equity Securities and all other Securities convertible into,
exchangeable for, or representing the right to purchase, Voting Stock,
of which are legally and beneficially owned by the Company and its
Wholly-Owned Restricted Subsidiaries.
RESTRICTED SUBSIDIARY STOCK -- Section 7.4(c).
SECURITIES ACT -- means the Securities Act of 1933, as amended.
31
SECURITY -- means "security" as defined by section 2(1) of the
Securities Act.
SUBSIDIARY -- means, at any time, a corporation of which the Company
owns, directly or indirectly, more than fifty percent (50%) (by number of
votes) of each class of Voting Stock at such time.
SURPLUS EQUIPMENT -- means equipment of the Company or a Restricted
Subsidiary which equipment is (i) similar to other equipment of the Company
or such Restricted Subsidiary and (ii) not used or useful in the ongoing
operation of the Company and its Restricted Subsidiaries.
SURVIVING CORPORATION -- Section 7.4(a).
UNCONDITIONAL GUARANTY -- Section 10.1(a).
UNRESTRICTED SUBSIDIARY -- means any Subsidiary which (a) as of the
Closing Date is not a Restricted Subsidiary, (b) after the Closing Date is
designated as an Unrestricted Subsidiary pursuant to Section 12.1 hereof,
or (c) otherwise does not satisfy the criteria for a Restricted Subsidiary
set forth in the definition of "Restricted Subsidiary."
VOTING STOCK -- means capital stock of any class or classes of a
corpora tion the holders of which are ordinarily, in the absence of
contingencies, entitled to elect corporate directors (or Persons performing
similar functions).
WHOLLY-OWNED RESTRICTED SUBSIDIARY -- means, at any time, any
Restricted Subsidiary one hundred percent (100%) of all of the equity
Securities (except directors' qualifying shares) and voting Securities of
which are owned by any one or more of the Company and the Company's other
wholly-owned Subsidiaries at such time.
2. WARRANTIES AND REPRESENTATIONS.
To induce the Existing Noteholders to enter into this Amendment, the
Company and the Guarantors represent and warrant as follows:
2.1 DUE AUTHORIZATION, EXECUTION AND DELIVERY; OBLIGATIONS ENFORCEABLE.
This Amendment has been duly authorized by all necessary corporate action
on the part of the Company and each Guarantor, has been executed and delivered
by a duly authorized officer of the Company and each Guarantor, and constitutes
a legal, valid and binding obligation of each such corporation, enforceable
against each such corporation in accordance with its terms.
2.2 NO EVENTS OF DEFAULT.
32
Immediately prior to, and immediately after giving effect to, this
Amendment, no Default or Event of Default will exist.
2.3 OTHER CREDITORS.
Since January 1, 1998, other than the Amendment Fee paid to the Existing
Noteholders, the Company has not paid or agreed to pay to any creditor of the
Company any fee or other compensation in consideration for amending any term of
any indebtedness of the Company.
3. EFFECTIVENESS.
The provisions of Section 1 of this Amendment shall become effective and
binding upon the Company, the Guarantors and the Existing Noteholders as of
January 15, 1998 when all of the conditions set forth in this Section 3 are
satisfied.
3.1 EXECUTION AND DELIVERY.
The Company and the holders of at least sixty-six and two-thirds percent
(66 2/3%) of the outstanding principal amount of the Notes shall have executed
and delivered to Xxxx & Xxxxxx, special counsel to the Existing Noteholders, a
counterpart of this Amendment.
3.2 PAYMENT OF AMENDMENT FEE AND EXPENSES.
The Company shall have paid the Amendment Fee to each of the Existing
Noteholders and shall have paid all costs, expenses and charges (including,
without limitation, all fees and out-of-pocket expenses of Xxxx & Xxxxxx,
special counsel to the Existing Noteholders) incurred on or prior to the date
hereof, directly or indirectly, by each Existing Noteholder in connection with
the preparation, review and implementation of this Amendment.
4. MISCELLANEOUS.
4.1 EFFECT OF AMENDMENT.
Upon the effectiveness of this Amendment, each reference in the Existing
Note Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
like import, and each such reference in the Notes, shall mean and be a reference
to the Existing Note Agreement as amended hereby.
4.2 DUPLICATE ORIGINALS; EXECUTION IN COUNTERPART.
Two or more duplicate originals of this Amendment may be signed by the
parties hereto, each of which shall be an original but all of which together
shall constitute one and the same instrument. This Amendment may be executed in
one or more counterparts and shall be effective when at least one counterpart
shall have been executed by the Company and the holders of at least sixty-six
and two-thirds percent (66 2/3%) of the outstanding principal
33
amount of the Notes, and each set of counterparts which, collectively, shows
execution by the Company and such Noteholders shall constitute one duplicate
original.
4.3 LIMITATION OF AMENDMENT.
Except as expressly provided herein,
(a) no terms or provisions of the Existing Note Agreement are modified
or changed by this Amendment, and
(b) the terms and provisions of the Existing Note Agreement shall
continue in full force and effect.
The Company and each of the Guarantors hereby acknowledges, confirms, reaffirms
and ratifies all of its obligations and duties under the Amended Note Agreement
and the Notes.
4.4 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT.
[Remainder of page intentionally blank. Next page is signature page.]
34
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their authorized officers as of the date first above written.
WESTERN GAS RESOURCES, INC.
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President - Finance
XXXXX OIL & GAS COMPANY, INC.
MGTC, INC.
MIGC, INC.
MOUNTAIN GAS RESOURCES, INC.
PINNACLE GAS TREATING, INC.
WESTERN POWER SERVICES, INC.
WESTERN GAS RESOURCES-
OKLAHOMA, INC.
WESTERN GAS RESOURCES
STORAGE, INC.
WESTERN GAS RESOURCES-TEXAS, INC.
WGR CANADA, INC.
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President - Finance
ACCEPTED:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY*
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY*
CENTURY INDEMNITY COMPANY*
LIFE INSURANCE COMPANY OF NORTH AMERICA*
By: Cigna Investments, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
* This entity is either the registered owner of one or more of the securities
pertaining hereto or is a beneficial owner of one or more of such securities
owned by and registered in the name of a nominee for that entity.
35
ATTACHMENT 1
Guarantors
----------
Xxxxx Oil & Gas Company, Inc.
MGTC, Inc.
MIGC, Inc.
Mountain Gas Resources, Inc.
Pinnacle Gas Treating, Inc.
Western Power Services, Inc.
Western Gas Resources-Oklahoma, Inc.
Western Gas Resources Storage, Inc.
Western Gas Resources-Texas, Inc.
WGR Canada, Inc.
Existing Noteholders
--------------------
Connecticut General Life Insurance Company
Century Indemnity Company
CIGNA Property and Casualty Company
Life Insurance Company of North America
The Canada Life Assurance Company
Canada Life Insurance Company of America
Canada Life Insurance Company of New York
The Franklin Life Insurance Company
Royal Maccabees Life Insurance Company
Attachment 1-1
