EXHIBIT 10.24
LETTER AMENDMENT NO. 1 TO
SECOND AMENDMENT AND RESTATED MASTER SHELF AGREEMENT
November 21, 1997
The Prudential Insurance Company of America
Pruco Life Insurance Company
c/o Prudential Capital Group
0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
We refer to the Second Amended and Restated Master Shelf Agreement dated
as of December 19, 1991 (effective as of January 31, 1996) (the "AGREEMENT") by
and among the undersigned, Western Gas Resources, Inc. (the "COMPANY"), The
Prudential Insurance Company of America ("PRUDENTIAL") and Pruco Life Insurance
Company ("PRUCO"). Unless otherwise defined herein, the terms defined in the
Agreement shall be used herein as therein defined.
The Company and Mountain Gas Resources, Inc., a wholly-owned Subsidiary of
the Company, have entered into an Option and Asset Purchase Agreement dated
November 14, 1997 with RIS (the "OPTION AGREEMENT"). The Option Agreement grants
RIS an option to purchase a portion (up to 50%) of the Company's interests in
Xxxxxxx/Lincoln Road Complex (such portion of such assets being the "Option
Assets"). The unadjusted option price of the Option Assets is approximately
$110,000,000.
The Company has requested that you amend paragraphs 6C(4) and 6C(5)(v)
relating to, among other things, sales of assets by the Company or any
Subsidiary. You have indicated your willingness to so amend the Agreement.
Accordingly, it is hereby agreed by the parties hereto as follows:
1. AMENDMENTS TO THE AGREEMENT. The Agreement is, effective the date first
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above written, hereby amended as follows:
A. PARAGRAPH 6C(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES. Paragraph
6C(4) is hereby deleted in its entirety and replaced, in lieu thereof, with the
following:
The Prudential Insurance Company of America
Pruco Life Insurance Company
November 21, 1997
Page 2
"6C(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES. (i) 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
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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
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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.
(ii) Notwithstanding anything else contained in this paragraph
6C(4), in the event that the Option (as hereinafter defined) is
exercised, then during the 12-month period following the end of the
calendar month in which the Option is exercised the Company shall be
permitted to sell or otherwise dispose of, or part with control of,
any shares of stock or Debt of any Subsidiary, provided that all
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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
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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 24-month period and (iii) the
assets of the Company and its Subsidiaries sold, leased, transferred
of pursuant to clause (v) of paragraph 6C(5) in the preceding 24-month
period (in each transaction measured by the greater of book value or
Fair Market Value), do not represent more than 25% of Consolidated Net
Tangible Assets as reflected on the most recent annual or
The Prudential Insurance Company of America
Pruco Life Insurance Company
November 21, 1997
Page 3
quarterly consolidated balance sheet, and provided further that, at
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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."
B. PARAGRAPH 6C(5). MERGER AND SALE OF ASSETS. Clause (v) of paragraph
6C(5) is hereby deleted in its entirety and replaced, in lieu thereof, with the
following:
"(v) the Company or any Subsidiary may sell, lease, transfer or
otherwise dispose of any of its assets to any Person, provided, that
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(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)(i) (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; provided
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further, that, in the event that the first option to purchase certain
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assets (the "OPTION") from the Company or its 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 (the "OPTION AGREEMENT") is exercised, then
for any sales, leases, transfers or other dispositions (including any
sale pursuant to the Option Agreement) of any of the assets of Company
or any Subsidiary during the 12-month period following the end of the
calendar month in which the option is exercised, 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
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(b) all other assets of the Company and its Subsidiaries sold, leased,
transferred or otherwise disposed of during the preceding 24-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 24-
month period pursuant to paragraph 6C(4)(iii) (in each transaction
measured by the greater of book value or Fair Market Value), does not
represent more than 25% of Consolidated Net Tangible Assets as
reflected on the most recent annual or quarterly consolidated balance
sheet."
The Prudential Insurance Company of America
Pruco Life Insurance Company
November 21, 1997
Page 4
II. WAIVERS UNDER THE AGREEMENT. To the extent that granting the option to RIS
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pursuant to the Option Agreement would be granting a "Lien" on property of the
Company and its Subsidiaries in violation of paragraph 6C(1) of the Agreement,
the Company has requested that you waive such violation. Prudential and Pruco
agree to waive any such violation of paragraph 6C(1) to the extent that granting
the option to purchase properties to RIS pursuant to the Option Agreement
constitutes a "Lien" provided the option granted to RIS expires, or the option
of RIS is exercised, on or before (a) July 1, 1998 with respect to at least
one-half of the Option Assets and (b) if the purchase pursuant to the preceding
clause, (a) is not for the entire amount of the Option Assets, July 1, 1999 for
the remaining one-half of the Option Assets.
III. MISCELLANEOUS; EFFECTIVENESS.
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A. On and after the effective date of this letter amendment, each
reference in the Agreement to "this Agreement," "hereunder," "hereof," or words
of like import referring to the Agreement, and each reference in the Notes to
"the Agreement," "thereunder," "thereof," or words of like import referring to
the Agreement, shall mean the Agreement as emended by this Letter Amendment No.
1. The Agreement, as amended by this letter agreement, is and shall continue to
be in full force and effect and is hereby in all respects ratified and
confirmed. The execution, delivery and effectiveness of this letter amendment
shall note except as expressly provided herein, operate as a waiver of any
right, power or remedy under the Agreement nor constitute a waiver of any
provision of the Agreement.
B. This Letter Amendment No. 1 may be executed in any number of
counterparts, and by any combination of the parties hereto in separate
counterparts, each of which counterpart shall be an original and all of which
taken together shall constitute one and the same letter amendment.
C. If you agree to the terms and provisions hereof, please evidence your
agreement by executing and returning at least a counterpart of this Letter
Amendment No. 1 to the Company at its address at 00000 X. Xxxxx Xxxxxx, Xxxxxx,
XX 00000, Attention: Vice President-Finance.
The Prudential Insurance Company of America
Pruco Life Insurance Company
November 21, 1997
Page 5
D. This Letter Amendment No. 1 shall become effective as of the date
first above written when and if (i) counterparts of this letter amendment shall
have been executed by us and you, (ii) the consent attached hereto shall have
been executed by each Guarantor, and (iii) Xxxxx Oil & Gas Company, Inc. shall
have delivered to you a Guaranty.
Very truly yours,
WESTERN GAS RESOURCES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President-Finance
Agreed as of the date first above written:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxx Xxxx
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Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxx
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Vice President
CONSENT TO AMENDMENT
Each of the undersigned is a Guarantor ("GUARANTOR" and, collectively,
"GUARANTORS") under separate guaranties (each being a "GUARANTY") in favor of
The Prudential Insurance Company of America ("PRUDENTIAL"), for itself and on
behalf of affiliates of Prudential with respect to the obligations of Western
Gas Resources, Inc. (the "COMPANY") under that certain Second Amended and
Restated Master Shelf Agreement dated as of December 19, 1991 (effective as of
January 31, 1996) (the "AGREEMENT"). The terms used herein have the meaning
specified in each Guaranty unless otherwise defined herein. Prudential, Pruco
Life Insurance Company and the Company are entering into that certain Letter
Amendment No. 1 dated as of November 21, 1997 to the Agreement to which this
consent is attached ("LETTER AMENDMENT NO. 1"). Each of the undersigned hereby
consents to Letter Amendment No. 1 and each hereby confirms and agrees that its
Guaranty is, and shall continue to be, in full force and effect and is hereby
confirmed and ratified in all respects except that, upon the effectiveness of,
and on and after the date of this consent, all references in the Guaranty of the
undersigned to the "Shelf Agreement," "thereunder," "thereof," or words of like
import referring to the Shelf Agreement shall mean the Agreement as amended by
the Letter Amendment No. 1.
Dated as of November 21, 1997.
XXXXX OIL & GAS COMPANY, INC.
MGTC, INC.
MIGC, INC.
MOUNTAIN GAS RESOURCES, INC.
PINNACLE GAS TREATING, INC.
WESTERN GAS RESOURCES STORAGE, INC.
WESTERN GAS RESOURCES - TEXAS, INC.
WESTERN GAS RESOURCES OKLAHOMA, INC.
WESTERN POWER SERVICES, INC.
WGR CANADA, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, as Vice President-
Finance of each of the above-named companies.
