EXHIBIT 10.8
[EXECUTION COPY]
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FIRST AMENDMENT
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of May 26, 2000
among
MARKWEST HYDROCARBON, INC.,
as the Borrower,
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
BANK OF AMERICA, N.A.,
as the Administrative and Syndication Agent for the Lenders
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FIRST AMENDMENT
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of May 26, 2000 (this "AMENDMENT"), is among MARKWEST HYDROCARBON, INC., a
Delaware corporation (the "BORROWER"), the various commercial lending
institutions as are or may become parties hereto (the "LENDERS"), and BANK OF
AMERICA, N.A., as the Administrative Agent and Syndication Agent for the Lenders
(in such capacity, "AGENT").
W I T N E S S E T H:
1. Borrower, Lenders and Agent have heretofore entered into that certain
Second Amended and Restated Credit Agreement, dated as of September 29, 1999
(the "CREDIT AGREEMENT").
2. The parties to the Credit Agreement intend to amend the Credit
Agreement to add additional Lenders as parties to the Credit Agreement and to
otherwise amend the Credit Agreement as follows:
II. AMENDMENTS TO CREDIT AGREEMENT.
A. SECTION 1.1 of the Credit Agreement is hereby amended by adding the
following definitions of "First Amendment", "Frac Spread", "Keep Whole Contract"
and "Siloam Plant" in appropriate alphabetical order:
" "FIRST AMENDMENT" means that certain First Amendment to Second Amended
and Restated Credit Agreement, dated as of May 26, 2000, among the
Borrower, the Lenders, and the Agent."
" "FRAC SPREAD" means the sum of (i) the sales price per gallon received by
the Borrower and its Subsidiaries with respect to the sale of natural gas
liquids produced at the Siloam Plant pursuant to Keep Whole Contracts LESS
(ii) the cost per gallon of natural gas paid by the Borrower and its
Subsidiaries with respect to the sale of natural gas liquids produced at
the Siloam Plant pursuant to Keep Whole Contracts."
" "KEEP WHOLE CONTRACT" means any contract which requires Borrower to
replace the energy content for natural gas liquids extracted from gas
received by Borrower from producers with natural gas."
" "SILOAM PLANT" means the fractionation plant covered by the Siloam
Mortgage."
B. The definitions of "Conversion Date", "Lenders", "Reducing Loan
Commitment Amount", "Reducing Loan Commitment Termination Date", "Revolving Loan
Commitment Amount", "Revolving Loan Commitment Termination Date", and "Stated
Maturity Date" appearing in SECTION 1.1 of the Credit Agreement are hereby
amended in their entirety to the followings:
" "CONVERSION DATE" means the date the initial Reducing Loan is made
pursuant to the terms hereof which shall be December 31, 2002 if a
Commitment Termination Event has not previously occurred."
" "LENDERS" means each financial institution listed on the signature pages
of the First Amendment, and each other financial institution that becomes a
party to this Agreement."
" "REDUCING LOAN COMMITMENT AMOUNT" means an amount equal to the lesser of
(i) $65,000,000 or (ii) the aggregate amount of Revolving Loans outstanding
on the Conversion Date, as such amount may be reduced from time to time
pursuant to SECTION 2.2."
" "REDUCING LOAN COMMITMENT TERMINATION DATE" means the earliest of (a)
December 31, 2006; (b) the date on which the Reducing Loan Commitment
Amount is terminated in full or reduced to zero pursuant to SECTION 2.2;
and (c) the date on which any Commitment Termination Event occurs. Upon the
occurrence of any event described in CLAUSE (b) or (c), the Revolving Loan
Commitments shall terminate automatically and without any further action."
" "REVOLVING LOAN COMMITMENT AMOUNT" means, on any date, $65,000,000, as
such amount may be reduced from time to time pursuant to SECTION 2.2."
" "REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earliest of (a)
December 31, 2002; (b) the date on which the Revolving Loan Commitment
Amount is terminated in full or reduced to zero pursuant to SECTION 2.2;
and (c) the date on which any Commitment Termination Event occurs. Upon the
occurrence of any event described in CLAUSE (b) or (c), the Revolving Loan
Commitments shall terminate automatically and without any further action."
" "STATED MATURITY DATE"means (a) in the case of any Revolving Loan,
December 31, 2002, (b) in the case of any Letter of Credit, December 31,
2006 and (c) in the case of any Reducing Loan, December 31, 2006."
C. SECTION 3.1.4 of the Credit Agreement is hereby amended in its
entirety to the following:
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" SECTION 3.1.4. MANDATORY AS TO MANDATORY PREPAYMENT RATIO. In the event
that the Borrower's Mandatory Prepayment Ratio is at any time greater than
(i) for the period from May 26, 2000 through December 31, 2000, 4.00 to
1.0, (ii) for the period from January 1, 2001 through December 31, 2001,
3.50 to 1.0, and (iii) on or after January 1, 2002, 3.00 to 1.0, the
Borrower shall be required to make a mandatory prepayment with respect to
outstanding Loans in an amount equal to the amount necessary for the
Borrower to return to compliance with the required Mandatory Prepayment
Ratio (the "MPR AMOUNT"). Borrower shall have the option to make such
mandatory prepayment of the MPR Amount either (a) immediately on the date
of the Borrower's failure to comply with the Mandatory Prepayment Ratio or
(b) in up to six (6) equal monthly installments with the first such
mandatory prepayment being due immediately on the date of such non-
compliance and, assuming that the Borrower remains out of compliance with
the Mandatory Prepayment Ratio, each subsequent payment shall be due and
payable to the Agent on the monthly anniversary of the Borrower's failure
to comply with the Mandatory Prepayment Ratio."
D. SECTION 7.1.8 of the Credit Agreement is hereby amended in its
entirety to the following:
" SECTION 7.1.8 COMPLIANCE WITH HEDGING POLICY. (a) Borrower shall at all
times comply with, and perform any and all obligations and actions set
forth in, the terms and provisions of the Hedging Policy.
(b) At all times during the 2000 calendar year, Borrower shall have
entered into Hedging Agreements (the "FRAC SPREAD HEDGING AGREEMENTS") for
the period from May 2000 through December 2000 satisfactory to the Agent,
which together with actual results for the period from January 2000 through
April 2000, result in Borrower having an expected average Frac Spread of at
least $0.20 per gallon for the 2000 calendar year with respect to at least
sixty percent (60%) of natural gas liquids volumes fractionated at the
Siloam Plant pursuant to Keep Whole Contracts. Any certificate delivered by
the Borrower pursuant to SECTION 7.1.1(c) and relating to the 2000 calendar
year shall contain a representation by the Borrower that Borrower is in
compliance with this SECTION 7.1.8 in all respects."
E. The Credit Agreement is hereby amended by replacing EXHIBIT X to the
Credit Agreement with EXHIBIT X to this First Amendment.
F. After giving effect to, and as of the date of, this Amendment, the
applicable "Percentage" for (i) Bank of America, N.A. shall be 38.46153846%,
(ii) U.S. Bank, National Association shall be 38.46153846%, and (iii) KeyBank
National Association shall be 23.07692308%.
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III. EFFECTIVENESS. This Amendment shall become effective as of the date
hereof when Agent shall have received:
A. Counterparts hereof duly executed by Borrower, the Lenders and Agent
(or, in the case of any party as to which an executed counterpart
shall not have been received, telegraphic, telex, or other written
confirmation from such party of execution of a counterpart hereof by
such party);
B. Notes of even date herewith payable to the order of each Lender duly
executed by Borrower in the original principal amount of each Lender's
Commitment;
C. The fees set forth in that certain Fee Letter of even date herewith
between Borrower and Agent;
D. A mortgagee title policy insuring the properties covered by the Kenova
Mortgage, in form and substance and from title companies satisfactory
to the Agent; and
E. Satisfactory evidence that Borrower is in compliance with SECTION
7.1.8(b) of the Credit Agreement.
Upon effectiveness of this Amendment, each Lender or Agent signatory to this
Amendment shall for all purposes be a Lender or an Agent, respectively, party to
the Credit Agreement as amended by this Amendment and any other Loan Documents
executed by the Lenders or the Agents, respectively, and shall have the rights
and obligations of a Lender or an Agent, respectively, under the Loan Documents
to the same extent as if they were originally parties to the Credit Agreement,
and no further consent or action by the Borrower, the Lenders or the Agent or
any other agent shall be required and the Banks shall have the Commitments set
forth in SECTION II.E of this Amendment.
IV. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce Lenders and
Agent to enter into this Amendment, Borrower hereby reaffirms, as of the date
hereof, its representations and warranties in their entirety contained in
ARTICLE VI of the Credit Agreement and in all other documents executed pursuant
thereto (except to the extent such representations and warranties relate solely
to an earlier date) and additionally represents and warrants as follows:
(i) Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation and
has all requisite authority, permits and approvals, and is in good standing
to conduct its business in each jurisdiction in which its business is
conducted.
(ii) Borrower has the corporate power and authority and legal right to
execute and deliver this Amendment and to perform its obligations
hereunder. The execution and delivery by Borrower of this Amendment and the
performance of its obligations hereunder have been duly authorized by
proper corporate proceedings, and this Amendment and the
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Credit Agreement, as amended hereby, constitute the legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally.
(iii) No Default or Event of Default has occurred and is continuing as
of the date hereof.
(iv) There has been no material adverse change (a) in the financial
condition, operations, assets, businesses, properties or prospects of
Borrower and its Subsidiaries from September 29, 1999, except as otherwise
disclosed in compliance with Section 7.1.1 of the Credit Agreement, (b)
affecting the rights and remedies of Lenders under and in connection with
this Amendment and the Credit Agreement, as amended by this Amendment, or
(c) in the ability of Borrower to perform its obligations under this
Amendment or the Credit Agreement, as amended by this Amendment.
(v) There is no pending or, to the knowledge of Borrower, threatened
litigation, action, proceeding, or labor controversy affecting Borrower or
any of its Subsidiaries, or any of their respective properties, businesses,
assets or revenues, which may materially adversely affect the financial
condition, operations, assets, business, properties or prospects of
Borrower or any Subsidiary or which purports to affect the legality,
validity or enforceability of this Amendment, Credit Agreement, the Notes
or any other Loan Document, except as disclosed in ITEM 6.7 ("Litigation")
of the Disclosure Schedule to the Credit Agreement and as supplemented in
the Borrower's monthly financial report delivered pursuant to Section
7.1.1(a) of the Credit Agreement.
(vi) Borrower has not amended its Hedging Policy dated as of January,
2000, which is attached as EXHIBIT X to the Credit Agreement and to this
Amendment, and such Hedging Policy is in full force and effect as of the
date of this First Amendment.
V. DEFINED TERMS. Except as amended hereby, terms used herein when
defined in the Credit Agreement shall have the same meanings herein unless the
context otherwise requires.
VI. REAFFIRMATION OF CREDIT AGREEMENT. This Amendment shall be deemed to
be an amendment to the Credit Agreement, and the Credit Agreement, as amended
hereby, is hereby ratified, approved and confirmed in each and every respect.
All references to the Credit Agreement herein and in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to the
Credit Agreement as amended hereby.
VII. GOVERNING LAW. THIS AMENDMENT, THE CREDIT AGREEMENT, THE NOTES AND
EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. All obligations of the
Borrower and rights of Lenders and Agent and
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any other holders of the Notes expressed herein shall be in addition to and not
in limitation of those provided by applicable law.
VIII. SEVERABILITY OF PROVISIONS. Any provision in this Amendment that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of this Amendment are declared to be severable.
IX. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Amendment by signing any such
counterpart.
X. HEADINGS. Article and section headings in this Amendment are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of this Amendment.
XI. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
XII. NOTICE. THIS WRITTEN AMENDMENT TOGETHER WITH THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
MARKWEST HYDROCARBON, INC.
By:
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Name: Gerry Tywoniuk
Title: Vice President of Finance
S-1
BANK OF AMERICA, N.A., as Administrative
Agent, Syndication Agent and a Lender
By:
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Name:
Title:
S-2
U.S. BANK, NATIONAL ASSOCIATION, as a Lender
By:
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Name:
Title:
S-3
KEYBANK NATIONAL ASSOCIATION, as a Lender
By:
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Name:
Title:
S-4
EXHIBIT X
HEDGING POLICY
[to be attached]
Exhibit X - Page 1