Exhibit 10.1
AMENDED AND RESTATED
LOAN AGREEMENT
Among
MARKWEST HYDROCARBON, INC.
and
NORWEST BANK COLORADO, NATIONAL ASSOCIATION,
individually and as Agent,
and
FIRST AMERICAN NATIONAL BANK,
N M ROTHSCHILD AND SONS LIMITED
and
THE FIRST NATIONAL BANK OF CHICAGO
October 8, 1996
TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS........................................................................................................... 1
SECTION 2. THE LOANS.............................................................................................................11
(a) The Revolver Loan...................................................................................................11
(b) The Loan Date.......................................................................................................15
(c) Computation and Payment of Interest; Late Payment Rate..............................................................15
(d) Payments by Borrower................................................................................................15
(e) Payments to Lenders.................................................................................................16
(f) Mandatory Payments..................................................................................................16
(g) Fees................................................................................................................16
(h) Adjustments.........................................................................................................17
(i) Increased Capital...................................................................................................17
SECTION 3. CONDITIONS TO EFFECTIVENESS; CONDITIONS OF LENDING....................................................................17
(a) Conditions to Effectiveness.........................................................................................17
(b) Initial Advance.....................................................................................................20
(c) Subsequent Advances.................................................................................................22
SECTION 4. TAXES, YIELD PROTECTION AND ILLEGALITY................................................................................23
(a) Taxes...............................................................................................................23
(b) Illegality..........................................................................................................24
(c) Increased Costs and Reduction of Return.............................................................................25
(d) Funding Losses......................................................................................................26
(e) Inability to Determine Rates........................................................................................26
(f) Certificate of Lender...............................................................................................27
(g) Survival............................................................................................................27
SECTION 5. BORROWING BASE........................................................................................................27
(a) Initial Borrowing Base..............................................................................................27
(b) Information.........................................................................................................27
(c) Subsequent Determinations of Borrowing Base.........................................................................27
(d) Notification of Borrowing Base......................................................................................28
SECTION 6. BORROWING BASE DEFICIENCY.............................................................................................28
(a) Repay Excess Debt...................................................................................................28
(b) Installment Payments................................................................................................28
SECTION 7. SECURITY..............................................................................................................29
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SECTION 8. REPRESENTATIONS AND WARRANTIES........................................................................................29
(a) Existence...........................................................................................................29
(b) Non-Contravention...................................................................................................29
(c) Third Party Authorization...........................................................................................30
(d) Authorization; Binding Effect.......................................................................................30
(e) Litigation..........................................................................................................30
(f) Taxes...............................................................................................................30
(g) Liens...............................................................................................................31
(h) Names and Places of Business........................................................................................31
(i) Use of Proceeds.....................................................................................................31
(j) Other Obligations...................................................................................................31
(k) Full Disclosure.....................................................................................................31
(l) Margin Stock........................................................................................................31
(m) ERISA...............................................................................................................32
(n) Security Documents..................................................................................................32
(o) Compliance with Laws................................................................................................32
(p) Financial Condition.................................................................................................32
(q) Environmental Matters...............................................................................................32
(r) Investment Company Act..............................................................................................33
(s) Public Utility Holding Company Act..................................................................................33
(t) Title to Properties; First Priority Security Interest..............................................................33
(u) Subsidiaries of Borrower and of Related Persons....................................................................33
(v) Location of Inventory...............................................................................................33
Reorganization...............................................................................................................33
SECTION 9. AFFIRMATIVE COVENANTS.................................................................................................35
(a) Payment and Performance of Loans....................................................................................35
(b) Financial Statements................................................................................................35
(c) Preservation of Existence, Etc. ....................................................................................37
(d) Maintenance of Property.............................................................................................37
(e) Payment of Other Obligations........................................................................................37
(f) Insurance...........................................................................................................38
(g) Inspection of Property, Books and Records; Confidentiality Agreement................................................38
(h) Notices.............................................................................................................39
(i) Compliance with Laws................................................................................................40
(j) Further Assurances..................................................................................................40
(k) Current Ratio.......................................................................................................40
(l) Funded Debt to Total Capitalization.................................................................................41
(m) Tangible Net Worth..................................................................................................41
(n) Fixed Charge Coverage Ratio.........................................................................................41
ii
(o) Environmental Matters...............................................................................................41
(p) Additional Title Requirements.......................................................................................41
(q) Capital Expenditure Review..........................................................................................42
(r) ....................................................................................................................42
SECTION 10. NEGATIVE COVENANTS...................................................................................................42
(a) Debt................................................................................................................42
(b) Liens...............................................................................................................43
(c) Guaranty Obligations................................................................................................43
(d) Loans and Advances..................................................................................................44
(e) Limitation on Investments and New Businesses........................................................................44
(f) Mergers and Consolidations..........................................................................................44
(g) Location of Inventory...............................................................................................45
(h) Burdensome Undertakings.............................................................................................45
(i) Change in Location of Business......................................................................................45
(j) Restricted Distributions............................................................................................45
(k) Disposition of Assets...............................................................................................46
(l) ERISA...............................................................................................................46
(m) Use of Proceeds.....................................................................................................46
(n) Transactions with Affiliates........................................................................................46
(o) Contracts; Take-or-Pay Agreements...................................................................................46
(p) Amendments to Organizational Documents..............................................................................47
SECTION 11. EVENTS OF DEFAULT....................................................................................................47
(a) Non-Payment.........................................................................................................47
(b) Certain Defaults....................................................................................................47
(c) Other Defaults......................................................................................................47
(d) Representation or Warranty..........................................................................................48
(e) Security Documents..................................................................................................48
(f) Judgments...........................................................................................................48
(g) Insolvency..........................................................................................................48
(h) Bankruptcy, Etc.....................................................................................................48
(i) Cross-Default.......................................................................................................49
(j) ERISA...............................................................................................................49
(k) Loan Documents......................................................................................................49
(l) Material Adverse Change.............................................................................................49
(m) Change in Control...................................................................................................49
(n) Columbia Contracts..................................................................................................50
(o) Regulatory Change...................................................................................................50
SECTION 12. REMEDIES............................................................................................................50
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(a) Automatic Acceleration of Loan.......................................................................................50
(b) Optional Acceleration of Loan........................................................................................50
(c) Setoff...............................................................................................................51
SECTION 13. THE AGENT............................................................................................................51
(a) Appointment..........................................................................................................51
(b) Delegation of Duties.................................................................................................51
(c) Exculpatory Provisions...............................................................................................51
(d) Reliance by Agent....................................................................................................52
(e) Notice of Default....................................................................................................52
(f) Non-Reliance on Agent and Other Lenders..............................................................................52
(g) Indemnification......................................................................................................53
(h) Agent and Lenders in Their Individual Capacity.......................................................................53
(i) Successor Agent......................................................................................................54
(j) Agent's Fee..........................................................................................................54
(k) Borrower Entitled to Rely on Agent...................................................................................54
SECTION 14. MISCELLANEOUS........................................................................................................54
(a) No Waiver; Cumulative Remedies.......................................................................................54
(b) Notices..............................................................................................................54
(c) Counterpart Execution................................................................................................56
(d) Governing Law; Entire Agreement......................................................................................56
(e) Amendments and Waivers...............................................................................................56
(f) Costs, Expenses and Indemnity........................................................................................57
(g) Inconsistent Provisions; Severability................................................................................58
(h) Incorporation of Exhibits and Schedules..............................................................................58
(i) Amendment of Defined Instruments.....................................................................................58
(j) References and Titles................................................................................................58
(k) Calculations and Determinations......................................................................................59
(l) Usury................................................................................................................59
(m) Waiver of Right to Trial by Jury.....................................................................................59
(n) Successors and Assigns...............................................................................................59
(o) Term of Agreement....................................................................................................59
(p) Jurisdiction.........................................................................................................60
iv
LIST OF EXHIBITS
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Exhibit Title
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A Revolver Note
B Request for Advance
C Borrower's Counsel Opinion
D Litigation
E Subsidiaries of Borrower
F Location of Borrower's Inventory
G Compliance Certificate
H Loans and Advances to Officers and Employees
I Notice of Conversion/Continuation
v
AMENDED AND RESTATED
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LOAN AGREEMENT
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THIS LOAN AGREEMENT (this "Agreement"), dated as of October 8, 1996, is
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among MARKWEST HYDROCARBON, INC., a Delaware corporation ("Borrower"), the
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successor to MarkWest Hydrocarbon Partners, Ltd., a Colorado limited partnership
(the "Partnership"), NORWEST BANK COLORADO, NATIONAL ASSOCIATION (successor to
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Norwest Bank Denver, National Association), a national banking association
("Norwest"), FIRST AMERICAN NATIONAL BANK, a national banking association
- ---------
("First American"), N M ROTHSCHILD AND SONS LIMITED, a company organized under
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the laws of England ("Rothschild") and THE FIRST NATIONAL BANK OF CHICAGO, a
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national banking association ("First Chicago") (Norwest, First American,
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Rothschild and First Chicago are referred to individually as a "Lender" and
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collectively as the "Lenders"), and NORWEST, AS AGENT FOR THE BANKS (in such
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capacity, the "Agent").
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Borrower desires to borrow from the Lenders to provide funds for the
purposes set forth below, and the Lenders are willing to lend such funds to
Borrower to accomplish those purposes, subject to the terms and conditions
contained or referred to herein. Accordingly, in consideration of the mutual
agreements, provisions and covenants contained herein, the parties agree as
follows:
SECTION 1. DEFINITIONS. As used herein, each of the following capitalized
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terms shall have the meaning given it in this Section 1:
"Advance" shall mean a Revolver Advance.
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"Affiliate" shall mean as to any Person, each other Person which, directly
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or indirectly (through one or more intermediaries or otherwise), is in control
of, is controlled by, or is under common control with, such Person.
"Amendment to Security Agreement" shall refer to the Amendment to Security
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Agreement dated as of May 31, 1996, executed by the Partnership and Agent in
connection with an amendment dated as of May 31, 1996 to the Existing Revolver
Agreement, covering Borrower's interest in the Church Hill Facility, Hawkins
County, Tennessee and all leasehold rights, equipment, inventory, accounts,
contracts, contract rights, documents, instruments, general intangibles, and all
other personal property and proceeds related thereto.
"Applicable Margin" shall mean:
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(a) for Base Rate Loans: (i) 0.25 percentage points if Borrower's total
Debt is less than or equal to 40 percent of Borrower's Total Capitalization or
(ii) 0.50 percentage points if Borrower's total Debt is greater than 40 percent
of Borrower's Total Capitalization; and
(b) for LIBOR Rate Loans: (i) 2.0 percentage points if Borrower's total
debt is less than or equal to 40 percent or (ii) 2.25 percentage points if
Borrower's total debt is greater than 40 percent.
"Base Rate" shall mean an annual rate of interest which equals the floating
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commercial loan rate of Agent announced from time to time as its "prime rate,"
which rate is used as a reference point for pricing certain loans, which may not
be the lowest interest rate charged by Agent, adjusted in each case as of the
banking day in which a change in the "prime rate" occurs.
"Base Rate Loan" shall mean a Revolver Loan that bears interest based on
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the Base Rate.
"Borrowing Base" shall mean, at the particular time in question, either the
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amount provided for in Section 5(a) or the amount determined by the Lenders in
accordance with the provisions of Section 5(c); provided however, that in no
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event shall the Borrowing Base exceed the Maximum Principal Amount.
"Borrowing Base Deficiency" shall have the meaning set forth in Section 6.
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"Business Day" shall mean a day other than Saturdays or Sundays on which
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commercial banks are open for business with the public in Chicago, Denver,
London and Memphis.
"Capital Adequacy Regulation" means any guideline, request or directive of
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any central bank or other governmental authority, or any other law, rule, or
regulation, whether or not having the force of law, in each case regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Code" means the Internal Revenue Code of 1986, as amended, together with
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the regulations promulgated thereunder.
"Collateral" shall mean all tangible or intangible, real or personal
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property subject to any of the Security Documents.
"Columbia Contracts" shall mean (a) Natural Gas Liquids Purchase Agreement
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dated as of April 26, 1988 between Columbia Gas Transmission Corporation
("Columbia") and the Partnership as amended November 4, 1988, July 31, 1989,
December 24, 1990 and January 28, 1991 (Siloam); (b) the Natural Gas Liquids
Purchase Agreement dated as of December 24, 1990, between Columbia and Borrower
as amended January 28, 1991 (Boldman); and (c) the Contract
2
for Construction and Lease of Boldman Plant dated December 24, 1990 between
Columbia and the Partnership; (d) Letter Agreement dated March 9, 1995 between
Columbia and the Partnership; and (e) the following agreements relating to the
Kenova Processing Plant: (i) Agreement to Design and Construct New Facilities
(the "Construction Agreement"), (ii) Purchase and Demolition Agreement-
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Construction Premises (the "Demolition Agreement"), (iii) Purchase and
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Demolition Agreement-Remaining Premises (the "Purchase Agreement"), and (iv)
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Processing Agreement-Kenova Processing Plant (the "Processing Agreement"), all
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dated March 15, 1995 between Columbia and the Partnership, together with any and
all amendments now existing or hereafter created to any of the foregoing to the
extent such amendments are otherwise permitted hereunder, and together with any
gas processing contracts between the Partnership and any shippers on Columbia's
system covering processing of such shippers' gas at the Kenova Processing Plant.
All of the Columbia Contracts have been assigned to and assumed by Borrower
pursuant to the Reorganization.
"Consolidated" refers to the consolidation of any Person, in accordance
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with GAAP, with its properly consolidated Subsidiaries. Reference herein to
Borrower's financial statements, financial position, financial condition,
liabilities, etc. refer to the consolidated financial statements, position,
condition, liabilities, etc. of Borrower and its properly consolidated
Subsidiaries.
"Consolidating", when reference is made herein to Borrower's financial
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statements, financial condition, liabilities, etc., shall mean a presentation of
such information in accordance with GAAP that sets forth separately the
financial statements, etc. for each of Borrower and its properly consolidated
Subsidiaries.
"Controlled Group" means the Borrower and all Persons under common control
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or treated as a single employer with the Borrower pursuant to Section 414(b),
(c), (n) or (o) of the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
"Conversion Date" means any date on which Borrower converts a Base Rate
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Loan to a LIBOR Rate Loan, or a LIBOR Rate Loan to a Base Rate Loan.
"Current Ratio" shall mean the ratio of Borrower's current assets to
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current liabilities, both determined in accordance with GAAP.
"Debt" shall mean as to any Person, at a particular date, the sum (without
----
duplication) of (a) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services, (b) all obligations of such
Person in respect of surety bonds, letters of credit, bankers' acceptances, or
similar obligations issued or created for the account of such Person, (c) all
capitalized lease obligations of such Person, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement, (e) open
lines of credit to finance futures
3
contracts, commodities and/or options contracts, (f) all indebtedness referred
to in clauses (a) through (e) above secured by a lien, encumbrance or security
interest on or in property owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness, and (g) all
guaranties in respect of indebtedness or obligations of other Persons of the
kinds referred to in clauses (a) through (f) above.
"Determination Date" has the meaning given it in Section 4(c)(ii).
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"Distribution Advance" shall mean the $10,000,000 advance under the
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Existing Revolver Loan used to fund the Partnership Distribution (as defined in
Section 3(a)(viii).
"Employee Option Agreement" shall mean the 1996 Stock Incentive Plan of
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Borrower, as the same may be amended by Borrower from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA Plan" shall mean any pension benefit plan subject to Section 302 of
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ERISA or Title IV of ERISA maintained by Borrower or any member of a controlled
group (as defined in Section 4001 (a)(14) of ERISA).
"Eurocurrency Liabilities" has the meaning specified in Regulation D of the
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Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Reserve Percentage" shall mean, for any Interest Period, the
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reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for Lenders with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on LIBOR Rate Loans is determined) having a
term equal to such Interest Period.
"Evaluation Date" shall mean the date of this Agreement and June 30 and
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December 31 of each year, commencing December 31, 1996.
"Event of Default" shall have the meaning set forth in Section 11.
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"Existing Loan Agreements" shall mean Existing Revolver Agreement and that
------------------------
certain Working Capital Loan Agreement dated as of November 20, 1992, among the
Partnership, Agent
4
and Norwest and First American, as lenders, and all amendments thereto executed
prior to the date hereof by the Partnership, Agent and any of the Lenders.
"Existing Revolver Agreement" shall mean that certain Loan Agreement dated
---------------------------
as of November 30, 1992, among the Partnership, Agent and the Lenders, as
amended by a First Amendment to Loan Agreement dated as of September 14, 1993, a
Second Amendment to Loan Agreement dated as of March 23, 1994, a Third Amendment
to Loan Agreement dated as of September 8, 1995, and a Fourth Amendment to Loan
Agreement dated as of May 31, 1996.
"First Mortgage Amendments" shall refer to the amendments dated as of
-------------------------
September 14, 1993, to each of the mortgages and deeds of trust executed by the
Partnership in connection with an amendment to the Existing Revolver Agreement
dated as of September 14, 1993, and described as follows: (i) First Amendment
to Arkansas Leasehold Deed of Trust with Security Agreement, Assignment of Rents
and Leases and Financing Statement (Revolving Credit); (ii) First Amendment to
Mortgage, Security Agreement, Assignment of Profits and Proceeds and Financing
Statement relating to Siloam; (iii) First Amendment to Mortgage, Security
Agreement, Assignment of Profits and Proceeds and Financing Statement (Boldman);
and (iv) First Amendment to A Credit Line Deed of Trust with Security Agreement,
Assignment of Profits and Proceeds and Financing Statement relating to West
Virginia property.
"Fiscal Quarter" shall mean a three-month period ending on the last day of
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each March, June, September and December of any year.
"Fiscal Year" shall mean a twelve-month period ending on December 31 of any
-----------
year.
"Fixed Charge Coverage Ratio" shall mean for the 12 most recent consecutive
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months, the ratio for such period of (a) the sum of net income (or net loss)
plus interest expense and non-cash charges included in determining net income
(or net loss), all as determined in accordance with GAAP, to (b) the sum of
interest expense included in calculating (a).
"Fourth Mortgage Amendments" shall refer to the amendments dated as of the
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date hereof, executed by the Borrower in connection with this Agreement, to each
of the mortgages and deeds of trust executed by the Partnership in connection
with the Existing Loan Agreements and described as follows: (i) Fourth
Amendment to Arkansas Leasehold Deed of Trust with Security Agreement,
Assignment of Rents and Leases and Financing Statement (Revolving Credit); (ii)
Fourth Amendment to Mortgage, Security Agreement, Assignment of Profits and
Proceeds and Financing Statement relating to Siloam; (iii) Fourth Amendment to
Mortgage, Security Agreement, Assignment of Profits and Proceeds and Financing
Statement (Boldman); and (iv) Fourth Amendment to A Credit Line Deed of Trust
with Security Agreement, Assignment of Profits and Proceeds and Financing
Statement relating to West Virginia Property,
5
covering Borrower's Kenova Processing Plant, all personal property, inventory
and equipment related thereto, and all processing contracts related thereto.
"Funded Debt" shall mean the aggregate amount of Debt for borrowed money
-----------
with a maturity in excess of one year (including guarantees of such Debt) and
capitalized leases, minus the outstanding principal balance, if any, under the
Working Capital Facility.
"GAAP" shall mean generally accepted accounting principles and practices as
----
consistently applied (except as otherwise required due to changes in GAAP) by
Borrower and certified to by the firm of independent certified public
accountants regularly employed as Borrower's auditors, such principles and
practices at all times being consistent with requirements of the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants in effect from time to time, as applicable to the nature of the
business conducted by Borrower; provided however, if any change in any
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accounting principle or practice is required by the Financial Accounting
Standards Board (or any such successor), all financial covenants provided for
herein may be prepared in accordance with such change only after notice of such
change is given to the Agent, and the Lenders agree to such change insofar as it
affects the financial covenants.
"Initial Financial Statements" shall mean the audited financial
----------------------------
statements of the Partnership for the Fiscal Year ending December 31, 1995, and
the unaudited quarterly financial statements (consisting of a current balance
sheet and profit and loss statement) for the Partnership as of June 30, 1996.
"Interest Payment Date" means, with respect to any LIBOR Rate Loan, the
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last day of each Interest Period applicable to such Loan and, with respect to
Base Rate Loans, the last Business Day of each Fiscal Quarter; provided that, if
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any Interest Period for a LIBOR Rate Loan exceeds three months, the date which
falls three months after the beginning of such Interest Period shall also be an
Interest Payment Date.
"Interest Period" means, with respect to any LIBOR Rate Loan, the period
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commencing on the Business Day the Loan is disbursed or continued or on the
Conversion Date on which the Loan is converted to the LIBOR Rate Loan and ending
on the date one, two, three or six months thereafter, as selected by Borrower in
its Request for Advance or Notice of Conversion/Continuation; provided that:
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(a) if any Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period shall
end on the immediately preceding Business Day;
6
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period may be selected by Borrower which would extend
beyond the last day of the Revolver Commitment Period.
"Late Payment Rate" shall have the meaning set forth in Section 2(c)(ii).
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"LIBOR Rate" shall mean, for any Interest Period, an interest rate per
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annum (rounded up to the nearest one-sixteenth of one percent) equal to the rate
per annum obtained by dividing (i) the rate per annum at which deposits in U.S.
dollars are offered by funding sources acceptable to Agent to leading banks in
the London interbank market at 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period in an amount substantially equal to the
amounts of the applicable LIBOR Rate Loan and for a period equal to such
Interest Period by (ii) a percentage equal to 100 percent minus the Eurodollar
Reserve Percentage for such Interest Period. The LIBOR Rate for each Interest
Period shall be determined by Agent two Business Days before the first day of
such Interest Period.
"Loans" shall mean the Revolver Loans.
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"Loan Date" shall have the meaning set forth in Section 2(b).
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"Loan Documents" means this Agreement, the Notes, the Security Documents
--------------
and all other documents executed and delivered by or on behalf of Borrower to
the Agent or the Lenders in connection herewith or therewith.
"Loan Share" means with respect to each of Norwest, First American,
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Rothschild and First Chicago, twenty-five percent.
"Maximum Principal Amount" shall be $40,000,000.
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"Mortgages" shall mean one or more mortgages, deeds of trust, collateral
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mortgages, acts of collateral mortgage, security agreements and assignments of
proceeds dated as of November 20, 1992, in favor of the Agent on behalf of the
Lenders, covering certain properties of Borrower and related interests as
described therein, including, without limitation, (a) Borrower's leasehold
interest in the West Memphis Terminal facility it operates in West Memphis,
Arkansas, (b) Borrower's Siloam fractionating facility in Greenup County,
Kentucky, (c) a 38 mile long natural gas liquids pipeline which commences at the
point called the Kenova Extraction Plant in Wayne County, West Virginia, runs
through Boyd and Greenup Counties,
7
Kentucky and connects to Borrower's Siloam facility described in (b) above, (d)
Borrower's interest in the truck loading facility at the Cobb Extraction Plant
in Kanawha County, West Virginia, and (e) Borrower's interest in the natural gas
liquids extraction plant known as the Boldman Extraction Plant and the related
truck loading facility, both of which are located in Pike County, Kentucky as
amended by the First, Second, Third and Fourth Mortgage Amendments.
"Note" shall mean a Revolver Note; all of which together shall be
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collectively referred as the "Notes."
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"Notice of Conversion/Continuation" means a notice given by Borrower to
---------------------------------
Agent pursuant to Section 2(a)(ii) in substantially the form of Exhibit I.
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"Obligations" means all Debt from time to time owing by Borrower to the
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Lenders under or pursuant to any of the Loan Documents, including without
limitation the Revolver Loan.
"Ordinary Course of Business" shall mean, in respect of any transaction,
---------------------------
the ordinary course of such Person's business, substantially as conducted by
such Person prior to or as of the date hereof, and undertaken by such Person in
good faith and not for purposes of evading any covenant or restriction in any
Loan Document.
"Partnership" shall mean MarkWest Hydrocarbon Partners, Ltd., a Colorado
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limited partnership.
"Person" shall mean an individual, partnership, corporation, association,
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business trust, joint stock company, trust or trustee thereof, unincorporated
association, joint venture, governmental unit or any agency or subdivision
thereof, or any other legally recognizable entity.
"Pledge Agreement" shall mean the General Security Agreement and Pledge (MW
----------------
Michigan Stock) dated as of the date hereof from the Borrower to Agent for the
benefit of Lenders, in form acceptable to Agent, granting a first priority
security interest in 100 percent of the issued and outstanding capitol stock of
MW Michigan, Inc. to secure the Obligations.
"Related Person" shall mean any of Borrower and each Subsidiary of
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Borrower, except for Restricted Subsidiaries.
"Reorganization" shall mean the reorganization and initial public offering
--------------
pursuant to which the Partnership has been dissolved and all of the assets and
liabilities of the Partnership have been assigned to and assumed by Borrower, as
more fully described in the Registration Statement, Form S-1, filed by Borrower
with the Securities and Exchange Commission.
8
"Request for Advance" shall mean a request for Advance meeting the
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requirements of Section 2(a)(i) hereof.
"Required Lenders" shall mean at any time Lenders, the Loan Shares of which
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aggregate 100 percent.
"Responsible Person" shall mean any officer of the Borrower or any other
------------------
Person employed by either a Related Person or the Borrower and who should be
aware of the terms of this Agreement.
"Restricted Subsidiaries" shall mean the following Subsidiaries of
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Borrower: MarkWest Resources, Inc., a Colorado corporation.
"Revolver Advances" has the meaning given it in Section 2(a).
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"Revolver Commitment" means the amount of the Borrowing Base then in
-------------------
effect; provided that in no event shall the Revolver Commitment exceed the
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Maximum Principal Amount at any time from the date hereof through and including
the last day of the Revolver Commitment Period, and thereafter, the amount of
the Revolver Commitment shall be reduced in accordance with the scheduled
amortization set forth in Section 2(a)(ii).
"Revolver Commitment Period" shall mean the period from the date of this
--------------------------
Agreement to and including June 30, 1998, or such earlier date as designated by
Borrower (upon thirty days prior notice to Agent) on which the Revolver Notes
become due and payable or such earlier date on which the Revolver Notes become
due and payable under the terms hereof, by acceleration or otherwise.
"Revolver Loan" shall mean the loan to Borrower by the Lenders provided for
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in Section 2(b) hereof, the maximum principal amount of which shall never exceed
the Revolver Commitment.
"Revolver Note" shall mean a Substitute Revolver Note dated as of the date
-------------
hereof, substantially in the form of Exhibits A-1, A-2, A-3 and A-4 attached
hereto, made by Borrower and payable to the order of Norwest, First American,
Rothschild or First Chicago, as appropriate, with appropriate insertions, issued
in connection with the assumption by Borrower of the Partnership's obligations
pursuant to the Reorganization and the assignment by Norwest, First American and
Rothschild to First Chicago of a portion of their interests in the Loan, in
substitution and replacement of the Replacement Revolver Notes, as amended,
issued in connection with the Third Amendment to Loan Agreement dated as of
September 8, 1995, together with any and all renewals, extensions, amendments
and changes of, or substitutions for said note; collectively, the "Revolver
--------
Notes."
- -----
9
"Second Amendment to Security Agreement" shall refer to the Second
--------------------------------------
Amendment to Security Agreement dated as of the date hereof, executed by
Borrower and Agent in connection with this Agreement.
"Second Mortgage Amendments" shall refer to the amendments dated as of
--------------------------
September 8, 1995, to each of the mortgages and deeds of trust executed by the
Partnership in connection with an amendment to the Existing Revolver Agreement
dated as of September 8, 1995, and described as follows: (i) Second Amendment
to Arkansas Leasehold Deed of Trust with Security Agreement, Assignment of Rents
and Leases and Financing Statement (Revolving Credit); (ii) Second Amendment to
Mortgage, Security Agreement, Assignment of Profits and Proceeds and Financing
Statement relating to Siloam; (iii) Second Amendment to Mortgage, Security
Agreement, Assignment of Profits and Proceeds and Financing Statement (Boldman);
and (iv) Second Amendment to A Credit Line Deed of Trust with Security
Agreement, Assignment of Profits and Proceeds and Financing Statement relating
to West Virginia property.
"Security Agreement" shall mean that certain Security Agreement dated as of
------------------
November 20, 1992, by the Partnership in favor of the Agent covering and
relating to Borrower's inventory, receivables, contract rights, Cash Collateral
Instruments, proceeds and certain other personal property, as amended by the
Amendment to Security Agreement and the Second Amendment to Security Agreement.
"Security Documents" means the Mortgages, the Security Agreement, the
------------------
Pledge Agreement, and all other security agreements, deeds of trust, mortgages,
chattel mortgages, assignments, pledges, guaranties, financing statements,
continuation statements, extension agreements and other agreements or
instruments now or hereafter delivered by Borrower to the Agent on behalf of the
Lenders or to the Lenders in connection with this Agreement or any transaction
contemplated hereby to secure or guarantee the payment of any part of the
Obligations or the performance of any other duties and obligations of Borrower
under the Loan Documents, whenever made or delivered, and shall also include all
of the "Security Documents" as defined in the Working Capital Facility.
"Stockholders' Equity" shall mean the stockholders' equity in the Borrower,
--------------------
determined in accordance with GAAP.
"Subsidiary" means, with respect to any Person, any corporation,
----------
association, partnership, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty-one percent or more by such Person.
"Tangible Net Worth" shall mean the Stockholders' Equity of Borrower less
------------------
intangible assets.
10
"Third Mortgage Amendments" shall refer to the amendments dated as of May
-------------------------
31, 1996, to each of the mortgages and deeds of trust executed by the
Partnership in connection with an amendment to the Existing Revolver Agreement
dated as of May 31, 1996, and described as follows: (i) Third Amendment to
Arkansas Leasehold Deed of Trust with Security Agreement, Assignment of Rents
and Leases and Financing Statement (Revolving Credit); (ii) Third Amendment to
Mortgage, Security Agreement, Assignment of Profits and Proceeds and Financing
Statement relating to Siloam; (iii) Third Amendment to Mortgage, Security
Agreement, Assignment of Profits and Proceeds and Financing Statement (Boldman);
and (iv) Third Amendment to A Credit Line Deed of Trust with Security Agreement,
Assignment of Profits and Proceeds and Financing Statement relating to West
Virginia property, covering Borrower's Kenova Processing Plant, all personal
property, inventory and equipment related thereto, and all processing contracts
related thereto.
"Total Capitalization" means the sum of Funded Debt plus Stockholders'
--------------------
Equity.
"Unmatured Event of Default" shall mean any event that with the passage of
--------------------------
time or giving of notice, or both, would constitute an Event of Default under
Section 11.
"Working Capital Facility" shall mean the loan provided for pursuant to
------------------------
that certain Amended and Restated Working Capital Loan Agreement of even date
herewith between Borrower, the Lenders and the Agent in the maximum principal
amount of $7,500,000 and which loan is secured by various "Security Documents"
(as such term is defined therein).
SECTION 2. THE LOANS.
---------
(a) The Revolver Loan. Subject to the terms and conditions of this
-----------------
Agreement, each Lender agrees to make advances to Borrower (such advances are
called the "Revolver Advances") from time to time during the Revolver Commitment
-----------------
Period, in an aggregate principal amount not to exceed its Loan Share of the
Revolver Commitment. Revolver Advances shall be evidenced by the Revolver
Notes. So long as an Event of Default or an Unmatured Event of Default has not
occurred, during the Revolver Commitment Period, Borrower may borrow, repay and
reborrow under the Revolver Notes in accordance with this Section 2.
(i) Request for Advance Under the Revolver Loan.
-------------------------------------------
(A) Each Request for Advance under the Revolver Loan shall be
irrevocable and shall be in the form of Exhibit B on or before 11:00 a.m.
---------
Denver, Colorado time (x) three Business Days immediately preceding the day
such Revolver Advance is requested to be made in case of LIBOR Rate Loans,
and (y) on the Business
11
Day immediately preceding the day such Revolver Advance is requested to be
made in case of Base Rate Loans.
(B) Each request for Advance shall specify:
(1) the amount of the requested Advance, which shall be
in an aggregate minimum principal amount of $100,000 or an integral
multiple thereof for both LIBOR Rate Loans and Base Rate Loans, or such
lesser amount equal to the unadvanced portion of the Revolver Loan;
(2) the requested date of the Revolver Advance, which
shall be a Business Day;
(3) whether the Revolver Advance is to be comprised of
LIBOR Rate Loans or Base Rate Loans; and
(4) the duration of the Interest Period applicable to
LIBOR Rate Loans included in such notice. If the Request for Advance shall
fail to specify the duration of the Interest Period for any LIBOR Rate
Loan, such Interest Period shall be three months.
(C) After giving effect to any LIBOR Rate Loan, there shall
not be more than six different Interest Periods in effect.
(D) Upon receipt of a Request for Advance, Agent shall
promptly notify each Lender thereof. Not later than 11:00 a.m. Denver time
on the date requested, each Lender shall make available to Agent the amount
of such Lender's Loan Share of the amount specified in the Request for
Advance in immediately available funds; provided, however, that Lenders
------------------
shall not be obligated to make any Revolver Advance to Borrower that would
result in the aggregate unpaid principal balance outstanding under the
Revolver Notes exceeding the Revolver Commitment. If all conditions
precedent to such Revolver Advance have been met, Agent will on the date
requested make such Revolver Advance available to Borrower in immediately
available funds at Agent's office in Denver, Colorado.
(E) All Revolver Advances requested by Borrower shall be made
pro rata by each Lender in proportion to such Lender's Loan Share.
(ii) Conversion and Continuation Elections.
-------------------------------------
12
(A) Upon irrevocable written notice to the Agent, Borrower may:
(1) elect to convert on any Business Day any Base Rate Loan (or
any part thereof) in an amount not less than $100,000 or an integral
multiple thereof into a LIBOR Rate Loan or;
(2) elect to convert on any Interest Payment Date any LIBOR Rate
Loan maturing on such Interest Payment Date (or any part thereof) in an
amount not less than $100,000 or an integral multiple thereof into a Base
Rate Loan; or
(3) elect to renew on any Interest Payment Date any LIBOR Rate
Loan maturing on such Interest Payment Date (or any part thereof) in an
amount not less than $100,000 or an integral multiple thereof;
(B) Borrower shall deliver a Notice of Conversion/Continuation
to be received by Agent not later than 2:00 p.m. Denver, Colorado time at
least (x) three Business Days in advance of the Conversion Date or
continuation date, if a Loan is to be converted into or continued as a
LIBOR Rate Loan; and (y) the Business Day immediately preceding the
Conversion Date, if the Loan is to be converted into a Base Rate Loan;
specifying:
(1) the proposed Conversion Date or continuation date, which
shall be a Business Day;
(2) the aggregate amount of the Revolver Loan(s) to be converted
or renewed;
(3) the nature of the proposed conversion or continuation; and
(4) the duration of the requested Interest Period, if applicable.
(C) If upon the expiration of any Interest Period applicable to
any LIBOR Rate Loan, Borrower has failed to select timely a new Interest
Period to be applicable to such LIBOR Rate Loan, or if any Unmatured Event
of Default or Event of Default shall then exist, Borrower shall be deemed
to have elected to convert such LIBOR Rate Loan into a Base Rate Loan
effective as of the expiration date of such current Interest Period.
13
(D) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any
LIBOR Rate Loans, there shall not be more than six different Interest
Periods in effect.
(iii) Scheduled Amortization of the Revolver Loan. On the last
-------------------------------------------
day of the Revolver Commitment Period, the commitment of the Lenders to
make Revolver Advances shall terminate and the aggregate principal balance
outstanding on such date under the Revolver Loan shall be due and payable
in sixteen equal quarterly payments (the amount of such principal payments
to be determined by dividing the amount of the outstanding principal
balance of the Revolver Loan on the last day of the Revolver Commitment
Period by sixteen) payable on the last day of each Fiscal Quarter,
commencing September 30, 1998, with the final payment due on or before June
30, 2002, together with interest on the Revolver Loan, calculated and
payable as set forth in Section 2 (d).
(iv) Optional Payments. Borrower may make optional payments on
-----------------
the outstanding principal balance of the Base Rate Loan without penalty or
premium, at any time, and from time to time, in integral multiples of
$100,000 or such lesser amount equal to the then outstanding principal
balance, together with accrued and unpaid interest on the principal amount
so paid. LIBOR Rate Loans may not be prepaid, except if it is necessary so
that Borrower can be in compliance with Section 2(f). Borrower shall give
Agent one Business Day's notice in advance of any optional payment on the
Base Rate Loan, and three Business Day's notice in advance of any
prepayment on the LIBOR Rate Loan required pursuant to Section 2(f). Such
notices shall specify which Revolver Loans (or portion thereof) are to be
prepaid and the date of prepayment. Such notices shall not be revocable by
Borrower. Upon the termination of the Revolver Commitment Period, all
prepayments of principal thereafter received under this Subsection shall
first be applied to the payment of principal indebtedness due on any Base
Rate Loan then outstanding and then to LIBOR Rate Loans with the shortest
Interest Periods remaining.
(v) Distribution Advance. Notwithstanding any other provisions in
--------------------
this Section 2, the Distribution Advance shall be repaid together with all
interest due thereon within thirty days after the Loan Date.
(b) The Loan Date. The initial Revolver Advances shall be made on a
--------------
date and at a time (the "Loan Date") selected by Borrower, but in no event
----------
earlier than the time all conditions of lending described in Section 3(a) and
3(b) below have been satisfied or waived by the Lenders.
14
(c) Computation and Payment of Interest; Late Payment Rate.
-------------------------------------------------------
(i) Each Revolver Loan shall bear interest on the outstanding
principal amount thereof from the date when made at a rate per annum equal
to the LIBOR Rate or the Base Rate, as specified in the applicable Request
for Advance or Notice of Conversion/Continuation, plus the Applicable
----
Margin. After termination of the Revolver Commitment Period, the Revolver
Loan shall bear interest on the outstanding principal amount thereof at the
Base Rate plus the Applicable Margin for Base Rate Loans, and interest
shall be payable on the Interest Payment Date for Base Rate Loans.
(ii) Interest on the Loans shall accrue daily and shall be
computed on the basis of a year of 365 or 366 days, as appropriate, for
Base Rate Loans, and a year of 360 days for LIBOR Rate Loans. Interest on
the Loans shall be payable in arrears on the Interest Payment Date.
(iii) Notwithstanding anything to the contrary contained in this
Agreement, overdue principal, and (to the extent permitted under applicable
law) overdue interest, whether caused by acceleration of maturity or
otherwise, shall bear interest at a fluctuating rate, adjustable the day of
any change in such rate, equal to three percentage points above the Base
Rate (the "Late Payment Rate"), until paid, and shall be due and payable
-----------------
immediately.
(d) Payments by Borrower. All payments of principal and interest
---------------------
hereunder shall be made at the Agent's offices at 1740 Broadway, Denver,
Colorado 80274-8699 (or at such other place as the Agent shall have designated
to Borrower in writing at least one Business Day prior to the due date or
prepayment date, as the case may be) by 12:00 noon Denver time on the date due
or the date of prepayment (as the case may be) in immediately available funds
free and clear of any and all taxes and without set-off or counterclaim or
deduction of any kind. If any payment to be made by Borrower hereunder or under
the Notes shall become due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in computing any interest and fees in respect of such payment,
unless the result of such extension would be to carry any Interest Period
relating to a LIBOR Rate Loan into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day.
(e) Payments to Lenders. Each payment by Borrower to the Agent on
--------------------
account of principal of and interest on the Loans or otherwise hereunder shall
be distributed the same day in like funds as received from Borrower by Agent pro
rata according to the Loan Share of each Lender in like funds; provided that in
-------- ----
the event Agent receives less than the aggregate amount due to all Lenders on
any day, Agent shall distribute ratably to each Lender in the case of any
15
payment, the portion of the aggregate amount received by Agent on such day
multiplied by the Loan Share of such Lender.
(f) Mandatory Payments. If at any time, or from time to time, a
-------------------
Borrowing Base Deficiency exists, Borrower shall, within thirty Business Days
after the Agent, on behalf of Lenders, gives written notice of such fact to
Borrower pursuant to Section 6 hereof, make one or more mandatory prepayments to
Agent for distribution to the Lenders in the principal amount determined in
accordance with Section 6(a) or (b). If the Borrower elects, pursuant to
Section 6(b), to repay the Borrowing Base Deficiency in six equal monthly
installments, then the payments shall be due and payable exactly one calendar
month apart, with the first one due and payable as set forth above in this
Section 2(f). Each prepayment of principal shall be accompanied by the amount
of accrued and unpaid interest on, and fees related to, the principal amount so
prepaid. Any such prepayment of principal under this Section 2 shall be applied
pro rata in accordance with each Lender's Loan Share, first to any Base Rate
Loans then outstanding and then to LIBOR Rate Loans with the shortest Interest
Periods remaining.
(g) Fees.
-----
(i) During the Revolver Commitment Period, Borrower shall pay to
the Lenders an unused commitment fee on the average daily difference
between the Revolver Commitment and the aggregate outstanding principal
amount under the Revolver Notes, at an annual rate of one-half of one
percent (0.5%), payable quarterly in arrears, with the first such payment
due December 31, 1996 (for the period from the date hereof through December
31, 1996) and ending on the last day of the Revolver Commitment Period.
(ii) Borrower shall pay to the Lenders on the Loan Date a one-
time commitment fee of one-quarter of one percent (0.25%) of the Maximum
Principal Amount.
(h) Adjustments. If any Lender (a "benefitted Lender") shall at any
------------ -----------------
time receive any payment of all or part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 12(c), or otherwise), in a greater proportion than its Loan Share, such
benefitted Lender shall purchase for cash from the other Lenders such portion of
such other Lenders' Loans, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with the other Lenders; provided however, that if
-------- -------
all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Borrower agrees that
16
any Lender so purchasing a portion of another Lender's Loans may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
(i) Increased Capital. If either (A) the introduction of or any
------------------
change in or in the interpretation of any law or regulation after the date
hereof (and excluding any new laws or changes presently known to Agent even if
they have not yet become effective) or (B) compliance by any Lender with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by any Lender or any corporation
controlling any Lender and such Lender determines that the amount of such
capital is increased by or based upon the existence of the Revolver Commitment
and other commitments of this type then, upon demand by such Lender, Borrower
shall immediately pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender in light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the issuance or maintenance of the
Revolver Commitment. Such Lender claiming compensation under this Section 2(i)
shall provide Borrower with a certificate setting forth in reasonable detail the
amount payable to such Lender, the reason for the additional compensation and
the calculation of the additional compensation.
SECTION 3. CONDITIONS TO EFFECTIVENESS; CONDITIONS OF LENDING.
--------------------------------------------------
(a) Conditions to Effectiveness. This Agreement shall become
----------------------------
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 14(e)):
(i) The Reorganization shall have occurred;
(ii) Borrower shall have executed and delivered to Agent an
Assumption Agreement (the "Assumption Agreement") containing an express
--------------------
assumption by Borrower of the Partnership's obligations under the Existing
Loan Agreements, the Security Documents executed prior to the date hereof
and all other agreements and instruments executed in connection with the
Existing Loan Agreements;
(iii) Prior to and at the consummation of the Reorganization
Borrower shall not have granted, and there shall not exist against Borrower
or its assets any judgment, lien, encumbrance, burden or claim of any kind
that would attach to the assets of the Partnership that are assigned to the
Company in connection with the Reorganization except liens and encumbrances
existing as a result of the Existing Loan Agreements, and except those
liens and encumbrances permitted by Section 10(b) hereof;
17
(iv) Prior to consummation of the Reorganization, Borrower shall
have executed and delivered to Agent UCC financing statements (the "Company
-------
Financing Statements") covering all of the assets of the Partnership that
--------------------
are assigned to Borrower and that are covered by financing statements
executed by the Partnership in connection with the Existing Loan
Agreements, and the Company Financing Statements shall have been properly
filed in all appropriate jurisdictions designated by Agent;
(v) Results of UCC lien searches as to Borrower for the States
of Arkansas, Colorado, Kansas, Kentucky, Tennessee and West Virginia and
for the following counties: Crittenden County, Arkansas; Boyd, Greenup and
Pike Counties, Kentucky; Hawkins County, Tennessee; and Wayne and Kanawha
Counties, West Virginia, shall have been received by, and shall be
satisfactory to, Agent, and Agent shall be satisfied in its sole discretion
and shall have received an opinion of counsel for Borrower that upon
consummation of the Reorganization the Lenders will have a perfected first
priority lien and security interest in the assets assigned to Borrower by
the Partnership;
(vi) Prior to consummation of the Reorganization, Borrower shall
have obtained all necessary consents, permissions and approvals by third
parties or governmental authorities in connection with the transfer of the
assets of the Partnership to Borrower and the transfer of all governmental
permits and licenses held by the Partnership in connection with the
operation of its business, except to the extent that the failure to obtain
any such consent, permission or approval would not have a material adverse
effect on the business, assets or financial condition of Borrower, and
Borrower shall have obtained all necessary waivers of preferential and
similar rights of third parties to purchase any portion of such assets;
(vii) No event or other circumstance shall have occurred or
exist that would cause the financial condition of Borrower upon
consummation of the Reorganization to be materially and adversely different
from the pro forma financial statements for Borrower set forth in the
Registration Statement;
(viii) Except for the Partnership Distribution (as defined in
the Modification Agreement referenced below) and the other elements of the
Reorganization that would violate the terms of the Existing Loan Agreements
but for the consent set forth in Section 1 of the Modification Agreement
dated as of July 31, 1996 among the Partnership, Borrower, Agent and the
Lenders (the "Modification Agreement"), no Event of Default or Unmatured
Event of Default under the Existing Loan Agreements shall have occurred or
be continuing, all representations and warranties contained in Section 7 of
the Existing Revolver Agreement shall be true in all material respects
(except those affected by the occurrence of the Reorganization), and
Borrower and the Partnership shall have
18
satisfied in all material respects their covenants and obligations under
the Modification Agreement;
(ix) No order shall have been entered by any court or
governmental agency having jurisdiction over the parties or the subject
matter of this Agreement that restrains or prohibits the Reorganization or
the other transactions contemplated by this Agreement and which remains in
effect at the time of the Reorganization and the other transactions
contemplated hereby;
(x) The Lenders shall be satisfied in their sole discretion that
net proceeds form Borrower's public offering will be sufficient to repay
the Distribution Advance within thirty days after the Loan Date; and
(xi) Lenders shall have received an opinion of Dorsey & Whitney,
LLP, counsel for Borrower, addressed to Lenders and Agent, in form and
substance satisfactory to Agent, concerning the following matters:
(A) The Reorganization, the conveyance of all of the
Partnership's assets to Borrower, the execution and delivery of the
Assumption Agreement, and all other actions necessary to consummate
the Reorganization have been duly authorized by all necessary
corporate, partner and shareholder actions required on behalf of
Borrower and the Partnership, and the Assumption Agreement and all
other documents executed in connection with the Reorganization
constitute the legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency or similar laws
of general application relating to the enforcement of creditors'
rights;
(B) Borrower has obtained all necessary consents, permissions and
approvals by third parties or governmental authorities in connection
with the transfer of the assets of the Partnership to Borrower and the
transfer of all governmental permits and licenses held by the
Partnership in connection with the operation of its business, except
to the extent that the failure to obtain any such consent, permission
or approval would not have a material adverse effect on the business,
assets or financial condition of Borrower;
(C) No order has been entered by any court or governmental agency
having jurisdiction over the parties or the subject matter of this
Agreement or the Modification Agreement that restrains or prohibits
the Reorganization or the other transactions contemplated by the
Modification Agreement and which remains in
19
effect at the time of the Reorganization and the other transactions
contemplated hereby.
From and after the Loan Date: (x) the Existing Revolver Agreement will be
automatically amended and restated to read as this Agreement reads, without
further action by any party, (y) Loans under (and as defined in) the Existing
Revolver Agreement outstanding on the Loan Date shall continue under this
Agreement, and (z) the rights and obligations of the parties hereto shall be
governed by the provisions hereof, and the rights and obligations of the parties
to the Existing Revolver Agreement with respect to the period prior to the Loan
Date shall continue to be governed by the provisions thereof as in effect prior
to the Loan Date, except that fees accrued under the Existing Revolver Agreement
to the Loan Date shall be paid on the Loan Date.
(b) Initial Advance.
----------------
(i) Assuming the conditions for the effectiveness of this
Agreement set forth in Section 3(a) are satisfied, the initial Advance
hereunder shall be deemed to be the Advances made under the Existing
Revolver Agreement to the Partnership that are outstanding and assumed by
Borrower pursuant to the Reorganization. In addition to the conditions in
Section 3(a), the Lenders shall have no obligation to make the initial
Advance under the Loans unless the Agent shall have received all of the
following, at the Agent's office in Denver, Colorado, duly executed and
delivered and in form and substance satisfactory to the Agent and its
counsel:
(A) This Agreement, executed by Borrower, the Agent and the
Lenders;
(B) The Notes;
(C) Counterparts of the Fourth Mortgage Amendments and the
Second Amendment to Security Agreement, duly executed and acknowledged by
Borrower, together with the appropriate financing statements, amendments to
financing statements and continuation statements for existing financing
statements, as may be necessary or advisable under applicable law in order
to perfect and maintain, to the full extent permitted by applicable law,
the first priority liens and security interests created thereby;
(D) The Pledge Agreement;
(E) Evidence that Agent has been named as mortgagee/loss
payee under all policies of casualty insurance, and as an additional
insured under all policies of liability insurance, as required by Section
9(f).
20
(F) A certificate, dated the Loan Date and executed by the
president or a vice president of the Borrower, stating the substance of
Subsections 3(b)(ii)(A), (C) and (D);
(G) A certificate, dated the Loan Date and executed by the
Secretary or assistant Secretary of the Borrower, which shall contain the
names and signature of the officers of the Borrower authorized to execute
the Loan Documents on behalf of the Borrower, and which shall certify to
the correctness and completeness of the following exhibits attached
thereto: copies of the articles of incorporation and bylaws of the
Borrower and all amendments thereto, and copies of the resolutions duly
adopted by the Board of Directors of the Borrower authorizing the execution
of the Loan Documents and the consummation of the transactions contemplated
herein and therein;
(H) Certificates from the Delaware Secretary of State as to the
good standing of Borrower and from the Secretary of State of Colorado,
Borrower's principal place of business, as to Borrower's qualification to
do business in such state; and
(I) All other documents and assurances which the Agent reasonably
requires or which it may reasonably request in connection with the
transactions contemplated by this Agreement, and such documents shall be
certified, when appropriate, by proper authorities.
(ii) The Lenders shall have no obligation to make any Advances
hereunder unless the following shall be true and correct on and as of the
date of such Advance:
(A) All representations and warranties contained in Section 8
and in the Security Documents shall be true on the Loan Date as if then
given, and Borrower and the Partnership (as to times prior to the date of
the Reorganization) shall have performed or observed all terms, agreements,
conditions and obligations hereunder and under the Security Documents to be
performed or observed on or prior to the Loan Date;
(B) All legal matters incident to the Loans shall be
satisfactory to counsel to the Agent, and the Agent shall have received on
the Loan Date favorable opinions addressed to the Agent and the Lenders of
Dorsey & Whitney LLP and Barry Spector, Esq., co-counsel for Borrower,
substantially in the form set forth in Exhibit C, together with the
---------
certificate provided for in such Exhibit, which opinions collectively shall
cover the matters set forth in Sections 8(a)(i), (ii) and (iii), (b), (c),
(d), (e), (r) and (s), and such other matters as the Agent or its counsel
may reasonably request;
21
(C) No Event of Default or Unmatured Event of Default shall have
occurred and be continuing or would result from the making of the requested
Advance; and
(D) Since December 31, 1995, there has been no material adverse
change in the business, financial position or results of operations of the
Partnership, as assigned to and assumed by Borrower pursuant to the
Reorganization.
(c) Subsequent Advances. The obligation of the Lenders to make
--------------------
subsequent Advances under the Revolver Commitment, all as set forth in Section
2, is subject to satisfaction of the conditions set forth in such Section and
the following conditions precedent:
(i) The Agent shall have received (with an executed copy for each
of the Lenders) a certificate, dated the date of the requested Advance and
executed on behalf of Borrower by the president or a vice president of the
Borrower, stating the substance of Subsections 3(b)(ii)(A), (C) and (D);
(ii) All representations and warranties contained in Section 8
hereof and in the Security Documents shall be true on the date of such
requested Advance as if then given, and Borrower shall have performed or
observed all terms, agreements, conditions and obligations hereunder and
under the Security Documents to be performed or observed on or prior to the
date of such requested Advance;
(iii) No Event of Default or Unmatured Event of Default shall
have occurred and be continuing or would result from the making of the
requested Advance;
(iv) Since December 31, 1995, there has been no material adverse
change in the business, financial position or results of operations of
Borrower, as assigned by the Partnership to and assumed by Borrower
pursuant to the Reorganization;
(v) All legal matters relating to the Loan Documents, such
Advance and the consummation of the transactions contemplated thereby shall
be reasonably satisfactory to the Agent's counsel; and
(vi) Such Advance shall not be prohibited by any laws or any
regulation or order of any court or governmental authority or agency and
shall not subject the Lender to any penalty or other onerous condition
under or pursuant to any such law, regulation or order.
22
SECTION 4. TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
(a) Taxes.
------
(i) Any and all payments by Borrower to the Lenders under this
Agreement shall be made free and clear of, and without deduction or
withholding for, any and all future taxes, levies, imposts, deductions,
charges or withholdings, and any stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Documents
and all liabilities with respect thereof, excluding such taxes (including
income taxes or franchise taxes) as are imposed on or measured by Lender's
net income by the jurisdiction under the laws of which Lender is organized
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes").
-----
(ii) Borrower shall indemnify Lenders and hold Lenders harmless
for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 4(a)) paid by Lenders
------------
and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted; provided that Lenders shall pay
--------
over to Borrower the amount of any tax refunds received by Lenders with
respect to any such Taxes (net of any tax detriment resulting from receipt
of such tax refunds to the extent not offset by payment over of such
amount) solely to the extent that (A) such tax refunds are fairly allocable
to such Taxes and (B) Borrower actually paid such Taxes. Payment under
this indemnification shall be made within 30 days from the date Lenders
make written demand therefor.
(iii) If Borrower shall be required by law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder to
Lenders, then:
(A) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 4(a)) Lenders receive an amount
equal to the sum they would have received had no such deductions been made;
(B) Borrower shall make such deductions, and
(C) Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
23
(iv) Within thirty days after the date of any payment by
Borrower of Taxes Borrower shall furnish to Lenders the original or a
certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to Lenders.
(b) Illegality.
-----------
(i) If Lenders shall determine that the introduction of any law,
rule or regulation, or any change in any law, rule or regulation or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other governmental authority has asserted that it is
unlawful, for Lenders to make LIBOR Rate Loans, then, on notice thereof by
Lenders to Borrower, the obligation of Lenders to make LIBOR Rate Loans
shall be suspended until Lenders shall have notified Borrower that the
circumstances giving rise to such determination no longer exist.
(ii) If Lenders shall determine that it is unlawful to maintain
any LIBOR Rate Loan, and, if any LIBOR Rate Loans are then outstanding,
Agent shall give notice thereof to Borrower, and within three Business Days
after receipt of such notice Borrower shall elect either (A) to prepay in
full all LIBOR Rate Loans of Lenders then outstanding, together with
interest accrued thereon, either on the last day of the Interest Period
thereof if Lenders may lawfully continue to maintain such LIBOR Rate Loans
to such day, or immediately, if Lenders may not lawfully continue to
maintain such LIBOR Rate Loans, together with any amounts required to be
paid in connection therewith pursuant to Section 4(c), or (B) to
immediately convert such LIBOR Rate Loans to Base Rate Loans in accordance
with Section 2(b)(ii).
(iii) If the obligation of Lenders to make or maintain LIBOR
Rate Loans has been terminated, Borrower may elect, by giving notice to
Lenders that all Revolver Loans which would otherwise be made by Lenders as
LIBOR Rate Loans shall be instead Base Rate Loans.
(c) Increased Costs and Reduction of Return.
----------------------------------------
(i) If Lenders shall determine that, due to either (A) the
introduction of or any change (other than any change by way of imposition
of or increase in reserve requirements included in the calculation of the
LIBOR Rate) in or in the interpretation of any law or regulation or (B) the
compliance with any guideline, or request from any central bank or other
governmental authority (whether or not having the force of law) issued
after the date of this Agreement, there shall be any increase in the cost
to Lenders of agreeing to make or making, funding or maintaining any LIBOR
Rate Loans (other than changes in the rate of taxes on the overall net
income of Lender), then Agent shall give notice of such determination to
Borrower, and Borrower shall have the option either
24
(X) to immediately convert all outstanding LIBOR Rate Loans to Base Rate
Loans in accordance with Section 2(a)(ii) or (Y) Borrower shall be liable
for, and shall from time to time, upon demand therefor by Lenders, pay to
Lenders additional amounts as are sufficient to compensate Lenders for such
increased costs. If Borrower elects to convert to Base Rate Loans, it shall
nevertheless be liable for any increased costs incurred by Lenders
regarding LIBOR Rate Loans accrued prior to the date of conversion.
(ii) If Lenders shall have determined that (A) the introduction
of any Capital Adequacy Regulation, (B) any change in any Capital Adequacy
Regulation, (C) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other governmental
authority charged with the interpretation or administration thereof, or (D)
compliance by Lenders or any corporation controlling any of Lenders, with
any Capital Adequacy Regulation; affects or would affect the amount of
capital required or expected to be maintained by Lenders or any corporation
controlling any of Lenders and (taking into consideration Lenders' or such
corporations' policies with respect to capital adequacy and Lenders'
desired return on capital) determines that the amount of such capital is
increased as a consequence of its commitment to make LIBOR Rate Loans under
this Agreement, then, Agent shall give notice of such determination to
Borrower, and Borrower shall have the option either (X) to immediately
convert all outstanding LIBOR Rate Loans to Base Rate Loans in accordance
with Section 2(a)(ii) or (Y) upon demand of Lenders, Borrower shall upon
demand pay to Lenders, from time to time as specified by Lenders,
additional amounts sufficient to compensate Lenders for such increase.
(d) Funding Losses. Borrower agrees to reimburse Lenders and to hold
---------------
Lenders harmless from any loss or expense which Lenders may sustain or incur as
a consequence of:
(i) the failure of Borrower to make any payment or mandatory
prepayment of principal of any LIBOR Rate Loan (including payments made
after any acceleration thereof);
(ii) the failure of Borrower to borrow, continue or convert a
Revolver Loan after Borrower has given (or is deemed to have given) a
Request for Advance or a Notice of Conversion/Continuation;
(iii) the failure of Borrower to make any prepayment after
Borrower has given a notice in accordance with Section 2(a)(iv);
----------------
25
(iv) the prepayment (including pursuant to Section 2(a)(iv)) of a
----------------
LIBOR Rate Loan on a day which is not the last day of the Interest Period
with respect thereto; or
(v) the conversion pursuant to Section 2(a)(ii) of any LIBOR Rate
----------------
Loan to a Base Rate Loan on a day that is not the last day of the
respective Interest Period;
including any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its LIBOR Rate Loans
hereunder or from fees payable to terminate the deposits from which such
funds were obtained.
(e) Inability to Determine Rates. If Agent shall have determined
-----------------------------
that for any reason adequate and reasonable means do not exist for ascertaining
the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan or that the LIBOR Rate applicable for any requested Interest
Period with respect to a proposed LIBOR Rate Loan does not adequately and fairly
reflect, in Agent's reasonable judgment, the cost to Lenders of funding such
Loan, Agent will forthwith give notice of such determination to Borrower.
Thereafter, the obligation of Lenders to make or maintain LIBOR Rate Loans, as
the case may be, hereunder shall be suspended until Agent revokes such notice in
writing, unless means exist for ascertaining the LIBOR Rate and Borrower agrees
to pay such amount as Agent determines in its sole and absolute discretion is
necessary to reflect the cost to Lenders of funding such Revolver Loan. Upon
receipt of such notice, Borrower may revoke any Request for Advance or Notice of
Conversion/Continuation then submitted by it. If Borrower does not revoke such
request or notice prior to the time that such Revolver Loan is made, Lenders
shall make, convert or continue the Revolver Loans, as proposed by Borrower in
the amount specified in the applicable request or notice submitted by Borrower,
but such Revolver Loans shall be made, converted or continued as Base Rate Loans
instead of LIBOR Rate Loans.
(f) Certificate of Lender. If Lenders claim reimbursement or
----------------------
compensation pursuant to this Section 4, Agent shall deliver to Borrower a
certificate setting forth in reasonable detail the amount payable to Lenders
hereunder and such certificate shall be binding on Borrower unless Borrower
objects to the contents of such certificate within five Business Days after
receipt thereof. If Borrower objects, Agent and Borrower shall attempt to
resolve their differences within 10 days, and if agreement is not reached within
such period then all LIBOR Rate Loans shall be immediately converted to Base
Rate Loans.
(g) Survival. The agreements and obligations of Borrower in this
---------
Section 4 shall survive the payment of all other Obligations.
SECTION 5. BORROWING BASE.
--------------
26
(a) Initial Borrowing Base. During the period from the date hereof
-----------------------
to the first Determination Date (as defined in Subsection 5(c)(ii) below), the
Borrowing Base shall be the Maximum Principal Amount.
(b) Information. At least 45 days prior to each Evaluation Date,
------------
Borrower shall furnish to Agent all information, reports and data which the
Agent or any Lender has then requested concerning the business and properties of
Borrower (which properties are included, at the time, in the calculation of the
Borrowing Base), and its Subsidiaries, dated as of such Evaluation Date and
including information concerning the oil and gas reserves owned by Borrower or
its Subsidiaries and the production from acreage dedicated to gas processing
plants and pipelines owned or operated by Borrower or its Subsidiaries.
(c) Subsequent Determinations of Borrowing Base. (i) The Lenders
--------------------------------------------
shall determine the Borrowing Base (which shall never exceed the Maximum
Principal Amount) semi-annually, as of June 30 and December 31 of each year that
this Agreement is in effect, commencing December 31, 1996, based upon the
Obligations then outstanding, the value and associated cash flow available for
debt service which the Lenders assign, in their sole discretion, to Borrower's
natural gas liquids processing plants, fractionator, propane terminals and any
other assets of Borrower now subject to the Security Documents or as may become
subject thereto in the future, but only to the extent each of the same are
subject to a perfected first priority lien in favor of the Agent for the benefit
of the Lenders, and based upon such other factors, assumptions, criteria and
general credit considerations as the Lenders in their sole discretion deem
appropriate.
(ii) The Borrowing Base as so designated shall be effective on
and including the date on which the Agent sends the notice provided in
Section 5(d) (herein called a "Determination Date") and, until the next
------------------
date on which the Borrowing Base is redesignated by the Lenders. A
Determination Date may occur during the period between the date on which a
Request for Revolver Advance is submitted and the day on which such
Revolver Advance is to be made.
(iii) If Borrower does not furnish to the Agent the information
required by Section 5(b) by the date specified therein, the Agent may
designate the Borrowing Base at any amount which the Lenders determine
based on the relevant information then available to the Lenders and the
Agent. The Agent may redesignate the Borrowing Base from time to time
thereafter until the Lenders receive the required information, whereupon a
new Borrowing Base shall be determined as described above.
(iv) No increase in the Borrowing Base shall be made at any time
unless the amount of such increase is agreed to by all Lenders.
27
(d) Notification of Borrowing Base. The Agent shall give written
-------------------------------
notice to Borrower of the amount determined pursuant to Section 5(c) as the
Borrowing Base for such period as soon as possible after the Lenders have made
such determination. Until the Agent has notified Borrower of the Borrowing Base
for such period pursuant to this Section 5(d), the Borrowing Base shall be the
amount determined pursuant to this Section 5 for the immediately preceding
period.
SECTION 6. BORROWING BASE DEFICIENCY. If the aggregate unpaid principal
-------------------------
amount outstanding under the Notes exceeds the Borrowing Base then in effect
(the "Borrowing Base Deficiency"), Borrower shall take one of the following
-------------------------
actions following receipt of notice from the Agent of the existence of such
Borrowing Base Deficiency:
(a) Repay Excess Debt. Within 30 calendar days following receipt of
------------------
such notice from the Agent, make a mandatory prepayment on the Loans in
accordance with Section 2(f) in an amount equal to the Borrowing Base
Deficiency; or
(b) Installment Payments. Make mandatory prepayments of the Loans in
---------------------
an aggregate amount equal to the Borrowing Base Deficiency, payable in six equal
monthly installments, with the first installment due within 30 calendar days
following receipt of such notice from the Agent; such mandatory prepayments to
be made in accordance with Section 2(f) hereof.
Failure of Borrower to comply with this Section 6 shall be an immediate Event of
Default.
SECTION 7. SECURITY. The repayment of the Loans and the Notes and all
--------
extensions and renewals thereof, and the performance of all obligations of
Borrower hereunder, shall be secured by the Security Documents.
SECTION 8. REPRESENTATIONS AND WARRANTIES. Borrower represents and
------------------------------
warrants to the Agent and each Lender that:
(a) Existence.
----------
(i) Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and is
qualified to do business in Arkansas, Colorado, Kentucky, Tennessee, Texas
and West Virginia and in every other jurisdiction in which the nature of
its business or the ownership of its assets requires such qualification and
failure to so qualify could have a material adverse effect on Borrower, its
business, operations, assets, property, prospects or condition (financial
or otherwise);
28
(ii) Each of the Restricted Subsidiaries and the Related Persons
other than Borrower is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or formation and
is qualified to do business in every jurisdiction in which the nature of
its business or the ownership of its assets requires such qualification and
failure to so qualify could have a material adverse effect on Borrower or
such Person, its business, operations, assets, property, prospects or
condition (financial or otherwise);
(iii) Each Related Person and Restricted Subsidiary has the
power and authority to own the property which it owns and to carry on its
business as such business is now conducted; and
(iv) Each Related Person and Restricted Subsidiary has all
franchises, permits, licenses and similar agreements necessary to carry on
its business as now conducted, and has not received any notices of default
or termination under any of such agreements.
(b) Non-Contravention. The execution, delivery and performance by
------------------
the Borrower of this Agreement, and the other Loan Documents and the borrowings
hereunder, and the consummation of the transactions contemplated herein and
therein will not conflict with the limited partnership agreement or other
organizational or governing documents of any Related Person and Restricted
Subsidiary, or conflict with or result in any breach of any mortgage, lien,
lease, agreement, instrument, order, judgment, decree, law, rule, regulation or
any other restriction of any kind or character to which any Related Person or
Restricted Subsidiary is a party or is subject or by which any Related Person or
Restricted Subsidiary or its properties are bound or affected or result in the
creation or imposition of any lien, charge or encumbrance upon any property of
any Related Person or Restricted Subsidiary.
(c) Third Party Authorization. No consent, approval, exemption,
--------------------------
authorization or order of or other action by, and no notice to or filing with,
any court or governmental authority or third party is required by any Related
Person or Restricted Subsidiary in connection with the execution, delivery or
performance by Borrower of this Agreement, or any other Loan Document or to
consummate any transactions contemplated hereby or thereby.
(d) Authorization; Binding Effect. Borrower has full power and
------------------------------
authority to enter into this Agreement and the other Loan Documents. The
execution and delivery of this Agreement, and the other Loan Documents, and the
performance and observance of their terms, conditions and obligations, have been
duly authorized by all necessary action by Borrower. This Agreement and the
Notes are, and the other Loan Documents when duly executed and delivered will
be, legal, valid and binding obligations of Borrower, enforceable in accordance
with their
29
respective terms, except as such enforcement may be limited by bankruptcy,
insolvency or similar laws of general application relating to the enforcement of
creditors' rights.
(e) Litigation. Except as disclosed in Exhibit D attached hereto,
----------- ---------
there are no actions, suits, proceedings or claims against any Related Person or
Restricted Subsidiary or any of their respective properties pending or, to the
knowledge of Borrower, threatened before any court or by or before any
governmental instrumentality, which could have a material adverse effect on the
business, operations, property, prospects or condition (financial or otherwise)
of any Related Person or Restricted Subsidiary or the ability of Borrower to
perform its obligations under this Agreement, or any of the other Loan
Documents. There exists no default or breach by any Related Person or
Restricted Subsidiary with respect to any order, writ, injunction, decree or
demand of any court or governmental instrumentality, nor does the execution,
delivery or performance by Borrower of this Agreement or any of the other Loan
Documents result in any such default or breach.
(f) Taxes. Each Related Person or Restricted Subsidiary has filed
------
all required tax returns and paid all taxes and other governmental charges or
levies imposed upon or against it or its properties, including the Mortgages and
the Collateral, or profits before the same became in default, except those being
contested in good faith and by appropriate proceedings, for which adequate
reserves have been set up by such Person, and for which there is no risk of loss
of any of the Collateral.
(g) Liens. All property and assets of Borrower are free and clear of
------
all liens and encumbrances except (i) the liens permitted by Section 10(b)
hereof, and (ii) the liens in connection with the litigation described in
Exhibit D attached hereto.
- ---------
(h) Names and Places of Business. No Related Person or Restricted
-----------------------------
Subsidiary has been known by, or used any other corporate, partnership, trade,
or fictitious name. The chief executive office and principal place of business
of Borrower (and, prior to the Reorganization, of the Partnership) have been
located at the address of Borrower set out in Section 14(b) for at least the
four months immediately preceding the date hereof. The place where Borrower
keeps its books and records concerning the Collateral is at Borrower's address
for notices set forth in Section 14(b), and has been there for at least the four
months immediately preceding the date hereof.
(i) Use of Proceeds. The proceeds of the Revolver Loan shall be used
----------------
solely for general business or commercial purposes, including capital
expenditures and acquisition of natural gas processing and natural gas liquids
related facilities. In no event shall funds from any Advance be used directly
or indirectly by any Person for personal, family, household or agricultural
purposes.
30
(j) Other Obligations. No Related Person or Restricted Subsidiary
------------------
has any outstanding Debt of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which is, in the
aggregate, material to such Person or material with respect to Borrower's
Consolidated financial condition and not shown in the Initial Financial
Statements.
(k) Full Disclosure. No certificate, statement, report or other
----------------
information delivered herewith or heretofore by any Related Person or Restricted
Subsidiary to Agent or the Lenders in connection with the negotiation of this
Agreement or in connection with any transaction contemplated hereby contains any
untrue statement of a material fact or omits to state any material fact known to
such Person necessary to make the statements contained herein or therein not
materially misleading as of the date made or deemed made. There is no fact
known to any Related Person or Restricted Subsidiary that has not been disclosed
to the Agent or the Lenders in writing that could materially and adversely
affect Borrower's properties, business, prospects or condition (financial or
otherwise).
(l) Margin Stock. No Related Person or Restricted Subsidiary is
-------------
engaged principally, or as one of its important activities, in the business of
extending credit to others for the purpose of purchasing or carrying any "margin
stock" or any "margin securities" (as such terms are defined respectively in
Regulation U and Regulation G promulgated by the Board of Governors of the
Federal Reserve System).
(m) ERISA. Neither Borrower nor any member of its Controlled Group
------
maintains, or has ever maintained any ERISA Plan. Borrower and the members of
its Controlled Group are in compliance with ERISA and the Code in all material
respects as to all employee benefit plans maintained by Borrower and the members
of its Controlled Group. Neither Borrower nor any member of its Controlled
Group is, or has ever been, required to contribute to, or has, or has ever had,
any other absolute or contingent liability in respect of, any "multiemployer
plan" as defined in Section 4001 of ERISA. Neither the Borrower nor any member
of its Controlled Group has ever represented, promised, or contracted (whether
in oral or written form) to any current or former employee (either individually
or as a group) that such current or former employee(s) would be provided, at any
cost to any member of the Controlled Group, with any employee welfare benefits
(within the meaning of Section 3(1) of ERISA) following retirement or
termination of employment. All members of the Controlled Group have complied in
all material respects with the notice and continuation coverage requirements of
Section 4980B of the Code.
(n) Security Documents. The warranties and representations contained
-------------------
in the Security Documents are true and correct in all material respects.
31
(o) Compliance with Laws. Each Related Person and Restricted
---------------------
Subsidiary is in material compliance with all laws, rules and regulations, and
determination of any arbitrator or governmental authority applicable to or
binding upon it or any of its property or to which it or any of its property is
subject.
(p) Financial Condition. The Initial Financial Statements fairly
--------------------
present the Partnership's financial position at the date thereof and the results
of the Partnership's operations and cash flows for the period thereof. Since
December 31, 1995, there has been no material adverse change in the business,
financial position or results of operations of the Partnership, as assigned to
and assumed by Borrower pursuant to the Reorganization.
(q) Environmental Matters. (i) The operations of each Related Person
----------------------
comply in all material respects with all federal, state or local laws, statutes,
rules, regulations, and all administrative orders, licenses, authorizations and
permits of any governmental authority, relating to environmental or public
health and safety; (ii) none of the operations of any Related Person or
Restricted Subsidiary is the subject of federal, state or local investigation
evaluating whether any material remedial action is needed to respond to a
release of any hazardous or toxic waste, substance or constituent into the
environment; (iii) no Related Person or Restricted Subsidiary has (and to the
best knowledge of Borrower, nor has any other person) filed any notice under any
federal, state or local law indicating that such Person is responsible for the
release into the environment, or the improper storage, of any material amount of
any hazardous or toxic waste, substance or constituent or that any such waste,
substance or constituent has been released, or is improperly stored, upon any
property of such Person; and (iv) no Related Person or Restricted Subsidiary
otherwise has any known material contingent liability in connection with the
release into the environment, or the improper storage, of any such waste,
substance or constituent.
(r) Investment Company Act. No Related Person or Restricted
-----------------------
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
(s) Public Utility Holding Company Act. No Related Person or
-----------------------------------
Restricted Subsidiary is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(t) Title to Properties; First Priority Security Interest. Each
-------------------------------------------------------
Related Person or Restricted Subsidiary has good and indefeasible title to all
of their respective material properties and assets, free and clear of all liens
except those permitted by Section 10(b) hereof. As of the date hereof, the
Agent, on behalf of the Lenders has a perfected first priority lien or security
interest in all of the Collateral.
32
(u) Subsidiaries of Borrower and of Related Persons. Borrower does
-------------------------------------------------
not presently have any Subsidiaries or own any stock or equity interest in any
corporation, partnership, joint venture or association, except as set forth in
Exhibit E hereto.
- ---------
(v) Location of Inventory. The location of all of Borrower's
----------------------
inventory is set forth in Exhibit F hereto.
---------
(w) Reorganization. Borrower represents and warrants to the Agent
---------------
and each Lender that:
(i) The execution, delivery and performance by the Partnership
and Borrower of all documents executed in connection with the
Reorganization and the consummation of the transactions contemplated
by the Reorganization will not conflict with the articles of
incorporation, bylaws or other organizational or governing documents
of any Related Person or Restricted Subsidiary, or conflict with or
result in any breach of any mortgage, lien, lease, agreement,
instrument, order, judgment, decree, law, rule, regulation or any
other restriction of any kind or character to which any Related Person
or Restricted Subsidiary is a party or is subject or by which any
Related Person or Restricted Subsidiary or its properties are bound or
affected or result in the creation or imposition of any lien, charge
or encumbrance upon any property of any Related Person or Restricted
Subsidiary.
(ii) No consent, approval, exemption, authorization or order of
or other action by, and no notice to or filing with, any court or
governmental authority or third party is required by any Related
Person or Restricted Subsidiary in connection with the execution,
delivery or performance by the Partnership and Borrower of the
documents executed in connection with the Reorganization or to
consummate any transactions contemplated by the Reorganization, except
such consents, approvals, exemptions, authorizations, orders or
actions the failure of which to obtain or take would not have a
material adverse effect on the transactions contemplated by the
Reorganization, or subsequent to consummation thereof, the business,
assets or financial condition of Borrower;
(iii) Borrower and the Partnership have full power and authority
to enter into all of the documents executed in connection with the
Reorganization. The execution and delivery of such documents, and the
performance and observance of their terms, conditions and obligations,
have been duly authorized by all necessary action by Borrower and the
Partnership. All such documents have been duly executed and delivered
and constitute the legal, valid and binding obligations of Borrower
and the Partnership, enforceable in accordance with their respective
terms, except as such enforcement may be limited by bankruptcy,
33
insolvency or similar laws of general application relating to the
enforcement of creditors' rights;
(iv) At the consummation of the Reorganization and as of the date
hereof, there does not exist against the Partnership or its assets any
judgment, lien, encumbrance, burden or claim of any kind that attached
to the assets of the Partnership assigned to Borrower in connection
with the Reorganization except liens and encumbrances existing as a
result of the Existing Loan Agreements, and except liens and
encumbrances permitted by Section 10(b) hereof;
(v) Upon consummation of the Reorganization the Lenders received
and continue to have a perfected first priority lien and security
interest in the assets assigned to Borrower by the Partnership;
(vi) Prior to consummation of the Reorganization, the Partnership
obtained all necessary consents, permissions and approvals by third
parties or governmental authorities in connection with the transfer of
the assets of the Partnership to Borrower and the transfer of all
governmental permits and licenses held by the Partnership in
connection with the operation of its business, except to the extent
that the failure to obtain any such consent, permission or approval
would not have a material adverse effect on the business, assets or
financial condition of Borrower; and the Partnership obtained all
necessary waivers of preferential and similar rights of third parties
to purchase any portion of such assets;
(vii) Except for the Partnership Distribution and the other
elements of the Reorganization that would violate the terms of the
Existing Loan Agreements but for the consent set forth in Section 1 of
the Modification Agreement, no Event of Default or Unmatured Event of
Default under the Existing Loan Agreements has occurred or is
continuing, all representations and warranties contained in Section 7
of the Existing Revolver Loan Agreement are true in all material
respects (except those affected by the occurrence of the
Reorganization), and Borrower and the Partnership have satisfied in
all material respects their covenants and obligations under the
Modification Agreement; and
(viii) No order has been entered by any court or governmental
agency having jurisdiction over the parties or the subject matter of
the Modification Agreement that restrains or prohibits the
Reorganization or which remained in effect at the time of the
Reorganization and the other transactions contemplated by the
Modification Agreement.
34
SECTION 9. AFFIRMATIVE COVENANTS. Until payment in full of the Loans and
---------------------------------
termination of all commitments by the Lenders to make Advances hereunder,
without the prior written consent of the Required Lenders:
(a) Payment and Performance of Loans. Borrower shall duly and
---------------------------------
punctually pay or cause to be paid in lawful money of the United States, the
principal and interest on the Loans upon the dates, at the place and in the
manner set forth in Section 2 hereof, and perform and observe all other
obligations of Borrower under this Agreement and the other Loan Documents.
(b) Financial Statements. Each of the Related Persons and Restricted
---------------------
Subsidiaries shall keep proper books of record and account in which full, true
and correct entries will be made of all business, dealings and affairs in
accordance with GAAP, and Borrower shall deliver to the Agent sufficient copies
for each Lender, at Borrower's expense and in an acceptable format:
(i) Within 120 calendar days after the end of each Fiscal Year,
complete audited annual financial statements of Borrower together with all
notes thereto, prepared in reasonable detail in accordance with GAAP and
presented on both a Consolidated and a Consolidating basis, together with
an unqualified opinion, based on an audit conducted by Price Waterhouse or
other independent certified public accountants selected by Borrower and
acceptable to the Lenders, stating that such financial statements present
fairly the financial position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except as otherwise
required due to changes in GAAP) and similar audited annual financial
statements and an opinion of independent certified public accountants
acceptable to the Lenders with regard to MarkWest Michigan L.L.C.;
(ii) Within 45 calendar days after the end of each calendar
month, an unaudited monthly income statement, balance sheet and statement
of cash flows for the subject month, prepared in reasonable detail and in
accordance with GAAP, on both a Consolidated and Consolidating basis
together with a report describing for each natural gas liquids processing
or distribution facility the revenue and expenses (including capital
expenditures) relating thereto, the "throughput" figures for such
facilities for such calendar month, and a list of the prices, capital
expenditures, new material contracts and amendments to existing material
contracts relating thereto. For purposes of this Subsection 9(b)(ii),
"material contract" shall mean any contract with a term exceeding one year
or a value exceeding $1,000,000.
(iii) Together with delivery of each of the financial statements
described in Subsection (i) and (ii) above, a certificate signed by the
president or chief
35
financial officer of Borrower in the form of Exhibit G attached hereto,
---------
stating that he or she has read this Agreement and made all other necessary
investigations, attesting to the authenticity of such financial statements,
showing the calculation of and compliance with the financial covenants
contained in this Agreement, and stating that in making the examination and
reporting on such financial statements, he or she concluded that there did
not exist any condition or event at the end of such Fiscal Year or at the
time of such certificate which constituted an Event of Default or an
Unmatured Event of Default, or, if such condition or event existed,
specifying the nature and period of existence of any such condition or
event;
(iv) Within 30 days after the same are filed, copies of all
financial statements, registration statements and regular, periodical or
special reports that any Related Person or Restricted Subsidiary may make
to, or file with, the Securities and Exchange Commission or any stock
exchange;
(v) Within 30 days, such additional financial and other
information as any of the Agent or either of the Lenders may from time to
time reasonably request, including without limitation reasonable detail
with respect to the information provided on an aggregate basis pursuant to
Subsection (ii) above; and
(vi) On or before December 1 of each year an annual budget for
Borrower's operations for the next calendar year.
(c) Preservation of Existence, Etc. (i) Borrower shall maintain in
--------------------------------
full force and effect Borrower's existence as a corporation and its good
standing under the laws of the State of Delaware and its right to transact
business in the States of Arkansas, Colorado, Kentucky, Tennessee, Texas and
West Virginia; and (ii) each Related Person and Restricted Subsidiary shall
maintain its good standing under the laws of the state of its formation and its
right to transact business in all states where its activities and ownership of
assets are such that qualification to transact business is necessary under the
laws of such states and failure to so qualify could have a material adverse
effect on such Person or on Borrower, or on Borrower's business, property,
prospects, assets, operations or condition (financial or otherwise).
(d) Maintenance of Property . Borrower shall maintain, preserve,
------------------------
protect and keep in good repair and in good working order and condition the
Collateral; and each Related Person and Restricted Subsidiary shall maintain all
other properties, real or personal, used or useful in its business in good
repair and in good working order and condition.
(e) Payment of Other Obligations .
-----------------------------
36
(i) Each Related Person and Restricted Subsidiary shall duly and
punctually pay and discharge (A) all taxes, assessments and other
governmental charges assessed against or imposed upon or with respect to
such Person or its properties or assets prior to the date when they shall
become delinquent unless the same are being contested in good faith and by
appropriate proceedings and appropriate reserves have been established in
accordance with GAAP and there is no risk of loss of any of the Collateral;
(B) all charges for labor, materials and supplies which if unpaid might
become a lien against any part of the property of such Person unless the
same are being contested in good faith and by appropriate proceedings and
appropriate reserves have been established in accordance with GAAP and
there is no risk of loss of any of the Collateral; and (C) all federal and
state social security, worker's compensation and similar taxes, payments
and contributions for which such Person may be liable, before the same
become delinquent unless the same are being contested in good faith and by
appropriate proceedings and appropriate reserves have been established in
accordance with GAAP and there is no risk of loss of any of the Collateral;
and
(ii) duly and punctually pay all Debt obligations (principal and
interest), including without limitation, accounts payable and lease
obligations, unless the same are being contested in good faith and by
appropriate proceedings and appropriate reserves have been established in
accordance with GAAP.
(f) Insurance. Each Related Person and Restricted Subsidiary shall
----------
keep all of its insurable property, real and personal, adequately insured at all
times against fire and against such other risks as are customarily insured
against by similar businesses of a comparable size, and fully insure against its
employer's and public liability risks in financially sound and reputable
insurance companies, all in such amounts and upon such terms and conditions,
including deductibles, consistent with industry standards. Each insurance
policy covering Collateral shall be endorsed (i) to provide for payment of
losses to the Agent, for the benefit of the Lenders, as its interests may
appear, (ii) to provide that such policies may not be canceled, reduced or
affected in any manner for any reason without fifteen days prior notice to the
Agent, (iii) to provide for any other matters specified in any applicable
Security Document or which the Lenders or the Agent may reasonably require; (iv)
to provide for insurance against fire, casualty and any other hazards normally
insured against, in the amount of the full value (less a reasonable deductible
not to exceed amounts customary in the industry for similarly situated
businesses and properties) of the property insured, and (v) business
interruption insurance in an amount equal to the cost of operating Borrower's
business as reasonably determined by Borrower for a six-month period, which may
change from time to time depending upon Borrower's costs of operation at the
time in question. Each Related Person shall at all times maintain adequate
insurance against its liability for injury to persons or property, which
insurance shall be by financially sound and reputable insurers. A true and
complete list of all currently existing insurance of Borrower has been
37
furnished to the Agent prior to the date hereof. It is understood, and Agent and
Lenders agree, that based on existing circumstances Borrower has no obligation
to insure inventory.
(g) Inspection of Property, Books and Records; Confidentiality
----------------------------------------------------------
Agreement. Borrower shall permit the Agent's and any Lender's duly authorized
- ----------
officers, employees and agents to inspect (and make copies of or abstracts
therefrom) the Collateral and the other property, books and records of Borrower
and to discuss Borrower's affairs, finances and accounts with Borrower's
officers and its independent accountants, and furnish any other data which the
Agent or any Lender may reasonably request, all at the expense of Borrower and
at any reasonable time and as often as the Agent or any Lender may reasonably
request; provided that Borrower shall not be liable for expenses arising out of
-------- ----
the gross negligence or willful misconduct of the inspecting party; provided,
--------
further, that Borrower shall not be required to give access to any party
- -------
inspecting the property subject to any of the Mortgages, if such inspecting
party refuses or is unwilling or unable to comply with the reasonable safety
requirements of Borrower relating to the property to be inspected. Each Lender
agrees that, until the occurrence of an Event of Default, it will take all
reasonable steps to keep confidential any proprietary information given to it by
any Related Person and Restricted Subsidiary including without limitation any
environmental information or reports pertaining to the property subject to the
Mortgages, provided, however, that this restriction shall not apply to
-------- -------
information which (i) has at the time in question entered the public domain,
(ii) is required to be disclosed by law or by any order, rule or regulation
(whether valid or invalid) of any court or governmental agency, or authority,
(iii) is disclosed to such Lender's external auditors, (iv) is disclosed to such
Lender's affiliates', agents or attorneys, or (v) is furnished to purchasers or
prospective purchasers of participations or other interests in the Loans or the
Notes; provided that before making the disclosures described in the immediately
preceding clauses (iv) and (v), such Lender shall direct in writing the Persons
to whom such proprietary information is to be disclosed to comply with the
confidentiality provisions set forth in this Section 9(g). Borrower agrees that
if either Lender breaches its confidentiality agreement contained in this
Section 9(g), Borrower's exclusive remedy shall be an action for actual damages
and such breach shall not be asserted in any action for payment hereunder or
under the Notes or in a foreclosure of any of the Security Documents.
(h) Notices. Borrower shall give written notice to the Agent within
--------
three days after a Responsible Person becomes aware of any of the following:
(i) Any material adverse change in the business, property,
prospects, assets, operations or condition (financial or otherwise), of
Borrower, any other Related Person or any Restricted Subsidiary;
(ii) Any Event of Default or Unmatured Event of Default;
38
(iii) The institution of any litigation or other proceeding
before any governmental body or official against any Related Person or any
Restricted Subsidiary or any of their respective assets and any
developments in any pending litigation or other proceeding before any
governmental body or official that could materially affect Borrower, such
Related Person or such Restricted Subsidiary, its business, property,
prospects, assets, operations or condition (financial or otherwise);
(iv) Any existing or pending investigation or inquiry by any
governmental authority in connection with any applicable Environmental Laws
(as such term is defined in the Mortgages);
(v) The institution of, or material development in, any
litigation affecting any of the Collateral, or any other dispute or claim
that could have a material adverse effect on any of the Collateral or the
calculation of the Borrowing Base;
(vi) Any fact that causes or may cause the Agent, on behalf of
the Lenders, or the Lenders to fail to have a valid, enforceable and
perfected first priority lien on or security interest in any of the
Collateral, except as expressly permitted by this Agreement or the Security
Documents and except as a result of the acts or omissions of the Agent or
either Lender; or
(vii) The shut-down of any natural gas liquids processing
facility owned or leased by Borrower for a period of 48 consecutive hours
or more or of any planned shut-down of any such facility that is expected
to be in effect for a period of 48 consecutive hours or more (notice of any
actual shut-down shall be given to Agent within 24 hours after the
occurrence thereof and notice of any such planned shut-down shall be given
to Agent in advance).
(i) Compliance with Laws . Each Related Person and Restricted
---------------------
Subsidiary shall comply in all material respects with all applicable laws,
statutes, rules and regulations of the United States and of any state or
municipality, and of any official, arbitrator or governmental authority, in
respect of the conduct of business and ownership of property by such Person.
(j) Further Assurances . Borrower shall promptly and, insofar as not
-------------------
contrary to applicable law, at Borrower's own expense, (i) file and refile in
such offices, at such times and as often as may be reasonably necessary, every
instrument and every amendment thereto, and take such other action, as may be
reasonably necessary or desirable to create, perfect, maintain and preserve all
liens and security interests intended to be created by Borrower under the
Security Documents in favor of the Agent for the benefit of the Lenders or in
favor of the Lenders and to protect and preserve the rights and remedies of the
Agent and the Lenders thereunder, (ii) furnish to the Agent evidence reasonably
satisfactory to the Agent of all such filings and refilings, (iii)
39
otherwise do all things necessary or expedient to be done to effectively create,
perfect, maintain and preserve the liens and security interests intended to be
created by the Security Documents as a lien on real property and fixtures and a
security interest in personal property and fixtures, and (iv) pay all fees and
expenses (including counsel fees) incident to this Agreement and in compliance
with this Section. In addition, Borrower covenants and agrees that if all or any
part of the Loans become subject to the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as it may be amended from time to
time, or other governmental regulation requiring appraisals, surveys or similar
requirements as to all or any part of the Collateral, Borrower shall promptly
provide the Agent and the Lenders with any appraisals, surveys or other items
required to have the Loans be in compliance with all applicable state and
federal laws, at its sole cost and expense.
(k) Current Ratio. Borrower (excluding Restricted Subsidiaries)
--------------
shall maintain a Current Ratio of not less than 1.1 to 1.0.
(l) Funded Debt to Total Capitalization. Borrower's Funded Debt
------------------------------------
(excluding Restricted Subsidiaries) shall not exceed 60% of its Total
Capitalization.
(m) Tangible Net Worth. Borrower (excluding Restricted Subsidiaries)
-------------------
shall maintain a Tangible Net Worth equal to or greater than $38,000,000, plus
50 percent of consolidated net income determined in accordance with GAAP and
earned by Borrower after September 30, 1996 (but excluding any net losses).
(n) Fixed Charge Coverage Ratio. Borrower (excluding Restricted
----------------------------
Subsidiaries) shall maintain a Fixed Charge Coverage Ratio, determined as of the
end of any month, commencing with the month ending October 31, 1996, calculated
on a rolling twelve-month basis, of not less than 1.5.
(o) Environmental Matters. No Related Person or Restricted
----------------------
Subsidiary shall cause or permit the use or storage of Hazardous Substances or
Solid Waste (as such terms are defined in the Mortgages) on, in or in connection
with such Persons's properties or disposal of Hazardous Substances or Solid
Waste from such Person's properties, except in full compliance with all
Environmental Laws (as such term is defined in the Mortgages), or make any use
of such Person's properties that results in any requirement that such Person
apply for or obtain a permit under RCRA (as such term is defined in the
Mortgages) or other Environmental Law for the treatment, storage or disposal of
Hazardous Substances or Solid Waste. Borrower covenants and agrees to keep or
cause each Related Person's properties to be kept free of any Hazardous
Substances or Solid Waste except in full compliance with all Environmental Laws,
and, promptly upon the discovery that the presence of any such substance on any
of their respective properties is not in full compliance, to remove the same (or
if removal is prohibited by law, to take whatever action is required by law) at
Borrower's sole expense.
40
(p) Additional Title Requirements.
------------------------------
(i) If Borrower's operations, plant or equipment on its Siloam
facility are to be expanded beyond the 190-acre area it presently occupies and
which is described in the Mortgagee's title insurance policy delivered to the
Agent pursuant to Subsection 3(a)(i)(D), Borrower will furnish the Agent with an
updated ACTA Form B mortgage title policy (or such other form as is acceptable
to the Agent) showing a first lien in favor of the Agent, for the benefit of the
Lenders, on such expanded area.
(ii) Within 45 days after the receipt of FERC approval to the
closure of the old Columbia Kenova Plant and the transfer of its site to
Borrower, Borrower shall provide Agent with evidence acceptable to Agent that
Borrower has marketable title to the Construction Premises as defined in the
Demolition Agreement together with an ALTA form B (or other form acceptable to
the Agent), mortgagee title insurance or a binder issued by a title insurance
company satisfactory to the Agent, insuring or undertaking to insure, in the
case of a binder, that the applicable Third Mortgage Amendment creates and
constitutes a valid first lien against such collateral in favor of the Agent,
subject only to permitted exceptions, with such endorsements and affirmative
insurance as the Agent may reasonably request.
(q) Capital Expenditure Review. Borrower shall consult with Lenders
---------------------------
concerning (i) the details of any single project with estimated capital
expenditures in excess of $10,000,000 or (ii) any capital contribution to any
Subsidiary in excess of $10,000,000. Not less than 45 days prior to entering
into a binding commitment to make such expenditure, Borrower will provide a
complete description of the proposed capital expenditure, the economic analysis
of the project and the projected impact on Borrower's financial condition and
business.
(r) Consent and Approvals. After consummation of the Reorganization,
---------------------
Borrower shall use reasonable, diligent, business efforts to obtain in a timely
fashion (to the extent not obtained prior to the Reorganization) all necessary
consents, permissions, and approvals by third parties or governmental
authorities in connection with the transfer of the Partnership's assets to
Borrower and the transfer of all governmental permits and licenses held by the
Partnership in connection with the operation of its business.
SECTION 10. NEGATIVE COVENANTS. Until payment in full of the Loans and
------------------
termination of all commitments by the Lenders to make Advances hereunder,
neither Borrower, any Restricted Subsidiary nor any of the other Related Persons
shall, without the prior written consent of the Required Lenders:
(a) Debt. Create, incur, assume or permit to exist any Debt, except:
-----
(i) The Loans and the Working Capital Facility;
41
(ii) Debt incurred to finance the acquisition or construction by
Borrower of one or more projects consistent with Borrower's covenant
contained in Section 10(e) hereof and for which recourse is limited to the
property included in the project and is non-recourse to Borrower and the
Collateral;
(iii) Obligations under leases, whether capital or operating
leases, provided that the obligations payable in any one year do not, in
-------- ----
the aggregate, exceed $2,000,000;
(iv) Debt incurred pursuant to Borrower's, any Restricted
Subsidiary's or any Related Person's hedging activities related to such
Person's line of business in the futures or commodities market such that
(A) the liability under open lines of credit to finance futures contracts,
commodities and/or option contracts does not exceed $1,000,000 in the
aggregate at any one time outstanding, and (B) recourse is limited to
Borrower's, any Restricted Subsidiary's or such Related Person's position
in futures contracts;
(v) Current accounts and charges, payable or accrued, incurred
in the ordinary course of Borrower's, any Restricted Subsidiary's or any
Related Person's business; and
(vi) Debt incurred by MarkWest Resources, Inc. to Colorado
National Bank, a national banking association, for borrowed money.
(b) Liens . Create, assume or permit to exist any mortgage, pledge,
------
security interest, lien or other encumbrance upon any Restricted Subsidiary's or
Related Person's properties or assets, whether now owned or hereafter acquired,
real or personal, except:
(i) The Security Documents;
(ii) Liens for taxes not delinquent or being contested in good
faith and by appropriate proceedings and for which adequate reserves have
been set aside on such Person's books;
(iii) Operator's, mechanic's, workmen's, materialmen's and
other like liens arising in the Ordinary Course of Business in respect of
obligations not overdue or which are being contested in good faith and by
appropriate proceedings and for which adequate reserves have been set aside
on such Person's books and for which there is no risk of loss of any of the
Collateral;
42
(iv) Liens or encumbrances, if any, permitted by the Security
Documents; and
(v) Liens securing Debt permitted by Section 10(a) above.
(c) Guaranty Obligations. Assume, guarantee, endorse or otherwise
---------------------
become or be contingently liable upon (by direct or indirect agreement,
contingent or otherwise, or by operation of law, to provide funds for payment,
to supply funds to, or otherwise invest in, a debtor, or otherwise assure a
creditor against loss) for the Debt, obligation, undertaking or other liability
of any other Person, or otherwise become or be responsible in any manner
(whether by agreement to purchase any obligations, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or services, or
otherwise) with respect to any undertaking of any other Person, except (i)
guarantees by Borrower of Debt incurred by MarkWest Resources, Inc. in
connection with San Juan and Piceance Basin projects, so long as such guarantees
do not exceed $1,000,000 in the aggregate at any one time (copies of each such
guarantee shall be provided to Agent within ten days after execution), (ii) the
guarantee by Borrower contained in Section 2.5 of the Participation, Ownership
and Operating Agreement for West Shore Processing Company, LLC dated May 2,
1996, (iii) the Secured Guarantees dated May 2, 1996 executed by MarkWest
Michigan, L.L.C. as Manager of West Shore Processing Company LLC and Basin
Pipeline, L.L.C. in favor of Bank of America Illinois, and (iv) endorsements of
negotiable instruments for deposit or collection and similar transactions in the
ordinary course of its business.
(d) Loans and Advances. Make any loans or advances to any Person,
-------------------
except for (i) accounts receivable or notes receivable arising from the sale or
lease of goods or services in the Ordinary Course of Business; (ii) as part
payment in the Ordinary Course of Business on its ordinary equipment rental,
repair, replacement and operating needs, or (iii) loans and advances to officers
and employees of Borrower to the extent and in the amount reflected on in
Exhibit J.
- ---------
(e) Limitation on Investments and New Businesses. (i) Make any
---------------------------------------------
expenditure or commitment or incur any obligation or enter into or engage in any
transaction except in the Ordinary Course of Business, (ii) engage directly or
indirectly in any business or conduct any operations except in connection with
gas processing and gathering, gas liquids fractionation, gas and gas liquids
marketing, MTBE manufacturing, refining and marketing and gasoline blending and
oil and gas production, (iii) make any capital contributions to Restricted
Subsidiaries in excess of $5,000,000, (iv) make any acquisitions of or capital
contributions to or other investments in any Person other than Restricted
Subsidiaries unless the following conditions are satisfied: (A) the investment
is in a Person engaged in any of the businesses described in (e)(ii) above, and
(B) Agent has received 10 days' advance notice of such investment.
Notwithstanding the foregoing, the Related Persons may make (1) investments in
open market commercial paper, maturing within 365 days after acquisition
thereof, which has a credit rating of at least A-2 or P-2 by either Standard &
Poor's Corporation or Moody's Investors Service, Inc., (2) marketable
43
obligations issued or unconditionally guaranteed by the United States of America
or an instrumentality or agency thereof and entitled to the full faith and
credit of the United States of America, and (3) demand deposits, time deposits
(including certificates of deposit), repurchase agreements, Eurodollar time
deposits or bankers' acceptances, maturing in each case within 12 months from
the date of deposit thereof, with a domestic office of any Lender.
(f) Mergers and Consolidations. Merge or consolidate into or with
---------------------------
any Person, or sell, lease, convey, transfer or otherwise dispose of all or a
substantial part of its assets to or with any Person, except: (i) a merger or
consolidation in connection with the acquisition by Borrower of property or
facilities as a result of a stock or equity transaction in the ordinary course
of its business and after the consummation of which Borrower is the surviving
entity; (ii) a merger or consolidation of any Consolidated Subsidiary of the
Borrower with or into the Borrower, provided that the Borrower shall be the
--------
continuing or surviving corporation; in both cases, so long as no Event of
Default or Unmatured Event of Default has occurred or is continuing or would be
caused by the consummation of such merger or consolidation and Agent shall have
received within 10 days after such merger or consolidation a certificate from
the chief financial officer or any Vice President of Borrower that Borrower is
in compliance with the provisions of this Agreement.
(g) Location of Inventory. Borrower shall not store any of its
----------------------
products or inventory except at the locations described in Exhibit F hereto
---------
without giving the Agent notice of a change within 30 days thereof and the
execution of any and all Security Documents the Agent and its counsel deem
necessary or desirable to grant a perfected first priority lien in favor of
Agent for the benefit of the Lenders in such products or inventory;
notwithstanding the foregoing, Borrower shall not, under any circumstances,
store any of its products or inventory in a location outside of the United
States.
(h) Burdensome Undertakings. Undertake, or become contractually
------------------------
bound to undertake, any action not in the Ordinary Course of Business that could
materially adversely affect Borrower or its business, properties, prospects,
assets, operations or condition (financial or otherwise).
(i) Change in Location of Business. Move its place of business or
-------------------------------
chief executive office or the place where Borrower keeps its books and records
concerning the Collateral (including, without limitation, the records with
respect to its accounts and contract rights), from one state to another without
giving the Agent 45 days' prior written notice of the proposed new location
thereof.
(j) Restricted Distributions. (i) Make any dividends or
-------------------------
distributions of assets, or (ii) declare or pay any cash or liquidating
distribution dividends or (iii) make any other distribution to any of its
shareholders, or (iv) redeem, purchase or otherwise acquire any shares of
44
the capital stock of the Borrower, or (v) prepay, purchase or redeem, any
subordinated indebtedness of Borrower, or (vi) issue any securities or capital
stock or any options, warrants, rights or other agreements to issue any such
securities, other than the following:
(x) Dividends paid in common stock of Borrower;
(y) As to any Subsidiary of Borrower, the foregoing restrictions
of this Section 10(j) shall not apply.
(k) Disposition of Assets. Sell, transfer, lease, exchange or
----------------------
otherwise dispose of any of its assets, real or personal, except as follows:
(i) sales, transfers, leases, exchanges or other dispositions of
assets by Borrower or any other Related Person or Restricted Subsidiary in
the Ordinary Course of Business; and
(ii) sales, transfers, leases, exchanges or other dispositions
of assets by Borrower and the other Related Persons or Restricted
Subsidiaries not in the Ordinary Course of Business, so long as such
transaction is on fair and reasonable terms and the proceeds from all such
transactions do not exceed $250,000 in the aggregate in any calendar year.
(l) ERISA. Establish, maintain or contribute to any ERISA Plans or
------
incur any obligation to contribute to any "multiemployer plan" as defined in
Section 4001 of ERISA or represent, promise, or contract (in oral or written
form) to any current or former employee (individually or as a group) that such
current or former employee(s) would be provided, at any cost to any member of
the Controlled Group, with any employee welfare benefits (as defined in Section
3(1) of ERISA) following retirement or termination of employment.
(m) Use of Proceeds. Use any funds from the Loans directly or
----------------
indirectly for the purpose, whether immediate, incidental or ultimate, of
purchasing, acquiring or carrying any "margin stock" or any "margin securities"
(as such terms are defined respectively in Regulation U and Regulation G
promulgated by the Board of Governors of the Federal Reserve System) or to
extend credit to others directly or indirectly for the purpose of purchasing or
carrying any such margin stock or margin securities.
(n) Transactions with Affiliates. Enter into any transaction with
-----------------------------
any Affiliate, except any transaction that is in the ordinary course of such
Person's business and that is upon fair and reasonable terms no less favorable
to such Person than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate of such Person.
45
(o) Contracts; Take-or-Pay Agreements. Amend, modify or terminate
----------------------------------
the Columbia Contracts in any manner or permit any of them to be amended or
modified or any term waived by any party thereto or assign any of its rights
thereunder, unless: (x) the Agent and the Lenders have been notified by the
Borrower of such proposed amendment, modification or termination, (y) the
Lenders had an opportunity to review such proposed amendment, modification or
termination, and (z) the Lenders have consented to such amendment, modification
or termination, which consent shall not be unreasonably withheld. Enter into
any "take-or-pay" contract or other contract which requires it to pay for oil,
gas, other hydrocarbons or other minerals prior to taking delivery thereof,
provided that Borrower may enter into such contracts so long as the term thereof
- --------
does not exceed one year, and provided further that Borrower may enter into such
-------- -------
contracts if the products purchased thereunder are needed by the associated
facility at the time of delivery thereof. Examples of permitted contracts
include (i) futures contracts to hedge (but not speculate) against future
changes in prices and (ii) reciprocal exchange agreements or back to back
contracts in which Borrower avoids the cost of all or a portion of the cost of
transportation of natural gas or natural gas liquids (in this subsection called
"gas and liquids") processed by it by exchanging such gas and liquids for gas
and liquids processed by others which are closer in location to Borrower's
ultimate purchaser. Examples of prohibited contracts include: (1) essentially
speculative contracts entered into primarily in hopes of benefitting from price
changes and (i) providing for the purchase of gas and liquids not covered by a
back to back contract permitting an exchange or sale thereof within 180 days
after the date of purchase or (ii) providing for the purchase of gas and liquids
that will not be consumed in Borrower's operations within 180 days after the
purchase thereof; and (2) contracts for the future sale or purchase of gas or
liquids that are not for the purpose of facilitating the ultimate sale of gas or
liquids owned, distributed or processed by Borrower. Notwithstanding the
foregoing provisions of this section, Borrower may enter into speculative
contracts not related to Borrower's operations primarily in hopes of benefitting
from price changes so long as the aggregate liability (including contingent or
potential liability) and costs of Borrower thereunder do not exceed $1,250,000
at any time.
(p) Amendments to Organizational Documents. Amend the articles and
---------------------------------------
by laws of Borrower or any other organizational document of any Related Person
or Restricted Subsidiary.
SECTION 11. EVENTS OF DEFAULT. The occurrence of any of the following
-----------------
shall constitute an event of default ("Event of Default") hereunder:
----------------
(a) Non-Payment. Failure by Borrower to (i) pay any installment of
------------
principal of, or interest on, the Notes, any fees or other amounts payable
hereunder or under the Notes or any of the Security Documents within three
Business Days after its due date, or (ii) comply with the provisions of Section
5 within the 30-day period set forth therein.
46
(b) Certain Defaults. Failure by Borrower to perform or observe any
-----------------
term, covenant, agreement, condition or provision contained in any of Sections
2(a)(ii), 9(c)(ii), (g), (h), (k), (l), (m) or (n), or Sections 10(a) through
(p), inclusive.
(c) Other Defaults. Failure by Borrower to perform or observe any
---------------
other covenant, agreement, condition or provision contained in this Agreement or
in the Notes (which covenant, agreement, condition or provision is not included
in Subsection 11(a) or (b)), and such failure continues unremedied for a period
of 30 days.
(d) Representation or Warranty. Any representation or warranty of
---------------------------
the Borrower, whether contained in this Agreement or in any certificate or other
writing required or contemplated by this Agreement or in the Security Agreement,
or any representation or warranty of any party to a Covenant Agreement shall be
false or misleading in any material respect as of the date made or deemed made.
(e) Security Documents.
-------------------
(i) Occurrence of any of the events of default defined in any of
the Security Documents.
(ii) Any of the Security Documents shall for any reason (other
than pursuant to the terms thereof or as a direct result of any act or
omission of Lenders or Agent) cease to create a valid security interest in
the collateral purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first priority lien and
security interest, subject only to those matters expressly permitted by
Section 10(b) hereof or by the applicable Security Document.
(iii) Failure by Borrower to perform or observe any term,
covenant, agreement, condition or provision contained in the Security
Agreement.
(f) Judgments. Any money judgment, writ or warrant of attachment, or
----------
similar process in an amount of $250,000 (in the aggregate) or more shall be
entered or filed against any Related Person or Restricted Subsidiary or any of
its assets and shall remain unvacated, unbonded or unstayed for a period of 30
calendar days, or in any event later than five calendar days prior to the date
of any proposed sale thereunder.
(g) Insolvency. Any Related Person or Restricted Subsidiary shall
-----------
become insolvent, admit in writing its inability to pay its debts as they
mature, or make an assignment for the benefit of creditors; or apply for or
consent to the appointment of a receiver or trustee for it or for a substantial
part of its property or business; or such a receiver or trustee otherwise shall
be appointed and shall not be discharged within 30 calendar days after such
appointment.
47
(h) Bankruptcy, Etc.. Bankruptcy, insolvency, reorganization or
-----------------
liquidation proceedings or other proceedings for relief under any bankruptcy law
or any other law for the relief of debtors shall be instituted by or against any
Related Person or Restricted Subsidiary (except for an involuntary petition
against any Related Person or Restricted Subsidiary, which shall not constitute
an Event of Default if such petition is vacated or dismissed within 15 Business
Days after the filing thereof), or any order, judgment or decree shall be
entered against any Related Person or Restricted Subsidiary decreeing its
dissolution or division.
(i) Cross-Default. Any event of default shall occur as to any other
--------------
agreement now or hereafter existing relating to extensions of credit to any
Related Person or Restricted Subsidiary by the Lenders or any of them, including
without limitation the Working Capital Facility, or by any third party,
including without limitation, any extensions of credit to MW Michigan, Inc. or
its Subsidiaries, or any event which with the passage of time or giving of
notice, or both, would permit the holder or holders of such indebtedness to
cause such indebtedness to be declared to be due and payable prior to its stated
maturity.
(j) ERISA. An employee benefit plan that is intended to be qualified
------
under the Code shall lose its qualification, and the loss can reasonably be
expected to impose on the Controlled Group liability (for additional taxes to
Plan participants, or otherwise) in the aggregate amount of $250,000 or more;
any member of the Controlled Group engages in or becomes liable for a non-exempt
prohibited transaction and the initial tax or additional tax under Section 4975
of the Code might reasonably be expected to exceed $100,000; a violation of
Section 404 or 405 of ERISA or Section 401(a)(2) of the Code that can be
reasonably expected to expose the Controlled Group to liability in excess of
$250,000; any member of the Controlled Group is assessed a tax under Section
4980B of the Code or is liable for failure to comply with the Section 4980B
notice and continuation coverage requirements that can be reasonably expected to
result in liability to the Controlled Group in excess of $250,000; any member of
the Controlled Group is assessed a penalty under Section 502(c)(2) of ERISA or
Section 6652(e) of the Code that can be reasonably expected to expose the
Controlled Group to liability in excess of $250,000; or any combination of the
foregoing events that involves potential liability in excess of $250,000.
(k) Loan Documents. This Agreement, the Notes, any of the other Loan
---------------
Documents shall for any reason be revoked or invalidated, or otherwise cease to
be in full force and effect, except as a direct result of the acts or omissions
of the Agent or the Lenders.
(l) Material Adverse Change. Any material adverse change occurs in
------------------------
Borrower's financial condition or business or operations (including, without
limitation, any material adverse change caused by Borrower becoming subject to
any statute, regulation or order of any governmental authority after the date
hereof).
48
(m) Change in Control. John M. Fox and the members of his immediate
------------------
family cease to own collectively at least twenty-five percent (25%) of the
issued and outstanding voting stock of Borrower.
(n) Columbia Contracts. Any of the Columbia Contracts shall cease to
-------------------
be in full force and effect for any reason except in conformity with Section
10(o) hereof.
(o) Regulatory Change. There shall be any legislative action by any
------------------
local, state or federal agency or other governmental entity resulting in any
regulatory control of Borrower's operations, the result of which has or could
have, in Lenders' reasonable opinion, a significant financial impact on, or
control of, its financial condition.
SECTION 12. REMEDIES.
--------
(a) Automatic Acceleration of Loan. Upon the occurrence of any Event
-------------------------------
of Default specified in Section 11(g) or (h), the obligation of the Lenders to
make Advances under the Loans shall automatically terminate and the unpaid
principal amount of the Loans and all interest and other amounts payable
hereunder, under the Notes or any of the Security Documents, shall automatically
become due and payable without further act of the Agent or the Lenders.
(b) Optional Acceleration of Loan. Upon the occurrence of any Event
------------------------------
of Default (other than those specified in Section 12(a) above), the Agent, at
the direction of Lenders whose Loan Shares aggregate 66-2/3 percent, may, from
time to time, do any or all of the following:
(i) Declare all or any part of the Loans to be forthwith due and
payable, together with all accrued and unpaid interest thereon and all
other amounts payable hereunder or under any of the other Loan Documents,
without presentment, demand, protest or other notice of any kind, all of
which are expressly waived by Borrower;
(ii) Declare the Commitments terminated;
(iii) With respect to any and all contingent, unmatured or
unliquidated obligations of Borrower hereunder, declare and require that
cash in an amount equal to the aggregate outstanding amount of all such
obligations be immediately paid over, pledged and delivered to the Agent on
behalf of the Lenders to be held as cash collateral for such obligations;
and
(iv) Proceed with every remedy provided for herein or in the
Notes, the Security Documents or any contract, agreement or undertaking
supplemental hereto and
49
the Lenders shall have, without limitation, all of the rights of a secured
party under the Uniform Commercial Codes as then in effect with respect to
any security then held for the Loans.
The enforcement of any rights of the Agent and the Lenders as to the
security for the Loans shall not affect the rights of the Agent or the Lenders
to enforce payment of the Loans against Borrower and to recover judgment against
Borrower for any portion thereof remaining unpaid.
(c) Setoff. Upon the occurrence of any Event of Default, each Lender
-------
shall have the right at any time and from time to time, without prior notice to
Borrower (which notice is hereby waived by Borrower to the fullest extent
permitted by law), to setoff and apply any debt owing to Borrower by such
Lender, including without limitation, any deposits (general or special, time or
demand, provisional or final) now or hereafter maintained by Borrower with such
Lender, against any and all obligations of Borrower now or hereafter existing
under this Agreement or any of the other Loan Documents, although such
obligations may be contingent or unmatured, and for such purpose Borrower hereby
grants a security interest in and assigns to each Lender all such deposit
accounts.
SECTION 13. THE AGENT.
---------
(a) Appointment. Each Lender hereby irrevocably designates and
------------
appoints Norwest as the Agent of such Lender under this Agreement and the other
Loan Documents, and each such Lender irrevocably authorizes Norwest as the Agent
for such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
(b) Delegation of Duties. The Agent may execute any of its duties
---------------------
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible to the
Lenders for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
(c) Exculpatory Provisions. Neither the Agent nor any of its
-----------------------
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action
50
lawfully taken or omitted to be taken by it or such Person or entity under or in
connection with this Agreement or any other Loan Document (except for its or
such Person's or entity's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any representative thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the Notes or any other Loan Document or for
any failure of the Borrower to perform its obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Borrower.
(d) Reliance by Agent. The Agent shall be entitled to rely, and
------------------
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy or telex message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.
(e) Notice of Default. The Agent shall not be deemed to have
------------------
knowledge or notice of the occurrence of any Unmatured Event of Default or Event
of Default hereunder unless the Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Unmatured Event of Default
or Event of Default and stating that such notice is a "notice of default." In
the event that the Agent receives such a notice, the Agent shall give notice
thereof to the Lenders.
(f) Non-Reliance on Agent and Other Lenders. Each Lender expressly
----------------------------------------
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents,
51
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
(g) Indemnification. The Lenders agree to indemnify the Agent in its
----------------
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to the
respective amounts of their original Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement, any of the other Loan Documents or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing; provided that no
--------
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the payment
of the Notes and all other amounts payable hereunder.
(h) Agent and Lenders in Their Individual Capacity. Each of the
-----------------------------------------------
Agent, the Lenders and their respective affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though such Person was not the Agent and/or a Lender, as the case may be,
hereunder and under the other Loan Documents. With respect to Advances made by
it and any Note issued to it, the Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
52
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
(i) Successor Agent. The Agent may resign as Agent upon 10 days'
----------------
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this Agreement
or any holders of the Notes, other than to give notice of the appointment of
such successor agent to Borrower. Borrower is entitled to rely upon the
existing Agent until Borrower has received notice of the appointment of a
successor agent. After any retiring Agent's resignation as Agent, the
provisions of this subsection shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement and the
other Loan Documents.
(j) Agent's Fee. To compensate Agent for performing its duties under
------------
the Loan Documents and for expenses incurred by Agent in connection with such
performance, Borrower shall pay to Agent an agent's fee in an amount mutually
agreed upon by Borrower and Agent.
(k) Borrower Entitled to Rely on Agent. Borrower shall be entitled
-----------------------------------
to rely upon the Agent's written actions and representations.
SECTION 14. MISCELLANEOUS.
-------------
(a) No Waiver; Cumulative Remedies. No delay on the part of the
-------------------------------
Agent or any Lender in exercising any right, power, privilege or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise or waiver of any right, power, privilege, or remedy hereunder preclude
any other or further exercise of such right, power, privilege, or remedy
hereunder or the exercise of any other right, power or privilege or remedy. The
rights and remedies of the Agent and the Lenders contained herein are cumulative
and not exclusive of any right or remedy which the Agent and the Lenders shall
otherwise have pursuant to the Security Documents, the Notes or applicable law.
The obligations of Borrower contained herein are cumulative, and compliance by
Borrower with any covenant shall not excuse compliance by Borrower with any
other covenant.
(b) Notices. All notices given hereunder shall be in writing, shall
--------
be given by certified mail, return receipt requested, overnight courier service,
telecopy, facsimile or copy delivered by hand, and, (i) if mailed, shall be
deemed received three Business Days after having
53
been deposited in a receptacle for United States mail, postage prepaid, (ii) if
delivered by overnight air courier service, shall be deemed received one
Business Day after having been deposited with such overnight air courier
service, postage prepaid, and (iii) if delivered by telex, telecopy or hand
delivery, shall be deemed received on the day the notice is sent, in each case
addressed as follows:
If to Borrower, to:
MarkWest Hydrocarbon, Inc.
5613 DTC Parkway, Suite 400
Englewood, Colorado 80111
Attention: Finance Department
Fax. No.: (303) 290-8769
If to the Lenders, to:
Norwest Bank Colorado, National Association
1740 Broadway
Denver, Colorado 80274-8699
Attention: Energy and Minerals Group
Fax. No.: (303) 863-5196
First American National Bank
6000 Poplar Avenue
Memphis, TN 38119
Attention: National Accounts
Fax. No.: (901) 762-5665
N M Rothschild and Sons Limited
New Court, St. Swithin's Lane
London, England EC4 P 4DU
Fax No.: 071-280-5139
With a copy to:
Rothschild Denver Inc.
3020 Republic Plaza
370 Seventeenth Street
Denver, Colorado 80202
Fax No.: (303) 607-0998
54
The First National Bank of Chicago
One First National Plaza
Mail Suite 0363
Chicago, IL 60670
Attention: William J. Clifford, Jr.
Fax No.: (312) 732-3055
If to the Agent, to:
Norwest Bank Colorado, National Association
1740 Broadway
Denver, Colorado 80274-8699
Attention: Energy and Minerals Group
Fax. No.: (303) 863-5196
Any party may, by written notice so delivered to the others, change the address
or facsimile number to which delivery shall thereafter be made.
(c) Counterpart Execution. This Agreement may be executed in any
----------------------
number of counterparts which together will be but one and the same instrument.
This Agreement shall become effective whenever each party shall have signed at
least one counterpart.
(d) Governing Law; Entire Agreement. THIS AGREEMENT AND THE NOTES
--------------------------------
SHALL BE DEEMED TO BE CONTRACTS UNDER THE LAWS OF COLORADO AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE. Such documents
and any other Loan Documents, together with the Security Documents, constitute
and incorporate the entire agreement between the Agent, the Lenders and Borrower
concerning the subject matter hereof and thereof, and supersede and cancel any
prior or contemporaneous agreements, verbal or written, between the Agent, the
Lenders and Borrower concerning the subject matter hereof and thereof.
(e) Amendments and Waivers. No waiver of any provision of this
-----------------------
Agreement, the Notes, or any of the Security Documents, and no consent with
respect to any departure by Borrower therefrom or by the respective parties to
the Covenant Agreements, shall be effective unless the same shall be in writing
and signed by the Agent, at the direction of the Required Lenders. No amendment
of any provision of this Agreement shall be effective unless the same shall be
in writing and signed by the Agent and the Required Lenders. All consents,
waivers and other action to be taken by the Lenders hereunder shall only be
taken upon approval of the Required Lenders. Any waiver shall be effective only
in the specific instance and for the specific purpose for which given. Any
consent or approval contemplated herein by , the Required Lenders or the Lenders
may be granted or withheld in the sole discretion of such Persons.
55
(f) Costs, Expenses and Indemnity. Borrower shall reimburse and pay
------------------------------
the Agent, the Issuer and the Lenders for all fees, costs and expenses
(including, without limitation, attorneys' fees, court costs and legal expenses
and consultants' and experts' fees and expenses, the costs of the Agent's
inspection of the Collateral and the costs and expenses of title or lien
searches and filing and recording fees and expenses), reasonably incurred or
expended in connection with (i) the preparation, execution and delivery of this
Agreement, the Notes and the other Loan Documents, (ii) the enforcement of this
Agreement, the Notes and the other Loan Documents and any amendments, waivers or
modifications of such documents, (iii) the breach by Borrower of any
representation or warranty contained in this Agreement, the Security Documents
or any other Loan Document, (iv) the failure by Borrower to perform any
agreement, covenant, condition, indemnity or obligation contained in this
Agreement, the Security Documents or any other Loan Document, (v) the Agent's or
the Lenders' exercise of any of their rights and remedies under this Agreement,
the Security Documents and the other Loan Documents, or (vi) the protection of
the Collateral and the liens thereon and security interests therein. Borrower
shall indemnify, defend and hold harmless the Agent, the Issuer and each Lender
and persons or entities owned or controlled by or affiliated with such Persons
and their respective directors, officers, shareholders, partners, employees,
consultants and agents (herein individually called an "Indemnified Party," and
-----------------
collectively called "Indemnified Parties") from and against, and reimburse and
-------------------
pay Indemnified Parties with respect to, any and all claims, demands,
liabilities, losses, damages (including, without limitation, actual,
consequential, exemplary and punitive damages), causes of action, judgments,
penalties, fees, costs and expenses (including, without limitation, attorneys'
fees, court costs and legal expenses and consultants' and experts' fees and
expenses), of any and every kind or character, known or unknown, fixed or
contingent, that may be imposed upon, asserted against or incurred or paid by or
on behalf of any Indemnified Party on account of, in connection with, or arising
out of (a) any bodily injury or death or property damage occurring in or upon or
in the vicinity of the Collateral through any cause whatsoever, (b) any act
performed or omitted to be performed hereunder or the breach of or failure to
perform any warranty, representation, indemnity, covenant, agreement or
condition contained in this Agreement, the Security Documents or any other Loan
Documents, (c) any transaction, act, omission, event or circumstance arising out
of or in any way connected with the Collateral or with this Agreement, the
Security Documents or any other Loan Documents, and (d) subject to the
exceptions and limitations contained in the Mortgages, the violation of or
failure to comply with any statute, law, rule, regulation or order now existing
or hereafter occurring, including without limitation, "Environmental Laws" (as
defined in the Mortgages) and statutes, laws, rules, regulations and orders
relating to "Hazardous Substances" (as defined in the Mortgages). The foregoing
indemnities shall not apply to any Indemnified Party to the extent the subject
of the indemnification is caused by or arises out of the gross negligence or
willful misconduct of that or another Indemnified Party or a successful suit by
Borrower against such Indemnified Party. If Borrower and the Indemnified Party
are jointly named in any action covered by this Section 13, the Indemnified
Party shall cooperate in the defense of such action to the extent its own rights
or defenses are not compromised thereby. Subject to the exceptions and
limitations contained in the
56
Mortgages, the foregoing indemnities shall not terminate upon release,
foreclosure or other termination of this Agreement or the Security Documents,
but shall survive such release, foreclosure or termination and the repayment of
the Loans. Any amount to be paid hereunder by Borrower to the Agent, the Issuer
or any Lender or for which Borrower has indemnified an Indemnified Party shall
be a demand obligation owing by Borrower to the Agent, the Issuer or such Lender
and shall bear interest at the Late Payment Rate until paid, and shall
constitute a part of the Loans and be indebtedness secured by the Security
Documents.
(g) Inconsistent Provisions; Severability. In case of any
--------------------------------------
irreconcilable conflict between the provisions of this Agreement and those of
the Security Documents and the Notes, the provisions of this Agreement shall
govern. The invalidity, illegality or unenforceability of any provision of any
of the Loan Documents shall not in any way affect or impair the legality or
enforceability of the remaining provisions of each of the Loan Documents.
(h) Incorporation of Exhibits and Schedules. All Exhibits and
----------------------------------------
Schedules attached to this Agreement are a part hereof and are incorporated
herein for all purposes.
(i) Amendment of Defined Instruments. Unless the context otherwise
---------------------------------
requires or unless otherwise provided herein the terms defined in this Agreement
which refer to a particular agreement, instrument or document also refer to and
include all renewals, extensions and modifications of such agreement, instrument
or document, provided that nothing contained in this section shall be construed
to authorize any such renewal, extension or modification.
(j) References and Titles. All references in this Agreement to
----------------------
Exhibits, Schedules, Sections and Subsections and other subdivisions refer to
the Exhibits, Schedules, Sections and Subsections and other subdivisions of this
Agreement unless expressly provided otherwise. Headings are for convenience
only and do not constitute any part of such subdivisions and shall be
disregarded in construing the language contained in such subdivisions. The
words "this Agreement", "this instrument", "herein", "hereof", "hereby",
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. Pronouns in
masculine, feminine and neuter genders shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires.
(k) Calculations and Determinations. Unless otherwise expressly
--------------------------------
provided herein or unless the Lenders otherwise consent, all financial
statements and reports furnished to the Agent or the Lenders hereunder shall be
prepared and all financial computations and determinations pursuant hereto shall
be made in accordance with GAAP.
(l) Usury. It is not intended hereby to charge interest at a rate in
------
excess of the maximum rate of interest that the Agent and the Lenders may charge
to Borrower under
57
applicable usury and other laws, but if, notwithstanding, interest in excess of
such rate shall be paid hereunder, the interest rates provided for herein shall
be adjusted to the maximum permitted under applicable law during the period or
periods that any of the interest rates otherwise provided herein would exceed
such rate and any excess amount applied at the Lenders' option to reduce the
outstanding principal balance of the Loans or to be returned to Borrower.
(m) Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
---------------------------------
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING; AND EACH PARTY HEREBY AGREES AND CONSENTS
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(n) Successors and Assigns. This Agreement shall be binding upon and
-----------------------
shall inure to the benefit of the parties hereto and their respective successors
and assigns, except that Borrower may not transfer or assign any of its rights
or obligations hereunder without the Agent's, the Issuer's and each of the
Lenders' prior written consent. The Notes, this Agreement and any other Loan
Document may be endorsed, assigned, or transferred in whole or in part by any
Lender, and any subsequent holder and assignee of same shall succeed to and be
possessed of the rights of such Lender under such documents to the extent
transferred and assigned; provided however, that such endorsement, assignment or
-------- -------
transfer shall not be binding upon Borrower until Borrower has received written
notice of such endorsement, assignment or transfer.
(o) Term of Agreement. Except as set forth in Section 14(f), this
------------------
Agreement shall continue in full force and effect so long as any indebtedness or
other obligation of Borrower to the Lenders remains unpaid or outstanding or
Borrower has any right to Advances hereunder.
(p) Jurisdiction. At the option of the Agent or the Lenders, an
-------------
action may be brought to enforce this Agreement in the District Court in and for
the City and County of Denver, State of Colorado, in the United States District
Court for the District of Colorado or in any other court in which venue and
jurisdiction are proper. Borrower and all guarantors hereof consent to venue
and jurisdiction in the District Court in and for the City and County of Denver,
State of Colorado and in the United States District Court for the District of
Colorado and to jurisdiction and service of process under Sections 13-1-
124(1)(a) and 13-1-125, Colorado Revised Statutes (1973), as amended, in any
action commenced to enforce this Agreement.
58
(q) Assignment. Norwest, First American and Rothschild hereby assign
----------
and transfer to First Chicago, without any warranties either express or implied,
a sufficient part of all their rights, title and interest in, to and under the
Existing Revolver Agreement, the Loans, the Revolver Notes and all other Loan
Documents, so that all such rights shall be owned and held by Lenders on the
date hereof in the following percentages:
Norwest 25%
First American 25%
Rothschild 25%
First Chicago 25%
EXECUTED to be effective as of the day and year first above written.
MARKWEST HYDROCARBON, INC.
By:
-------------------------------------
John M. Fox,
President
By:
-------------------------------------
Rita E. Harvey,
Director of Finance and Treasurer
59
NORWEST BANK COLORADO,
NATIONAL ASSOCIATION,
individually and as Agent
By:
--------------------------------
Thomas M. Foncannon,
Vice President
FIRST AMERICAN NATIONAL BANK
By:
--------------------------------
David C. May,
Executive Vice President
N M ROTHSCHILD AND SONS LIMITED,
a company organized and existing under
the laws of England
By:___________________________ By:______________________________
Name: ________________________ Name: ___________________________
Title: _______________________ Title: __________________________
THE FIRST NATIONAL BANK OF CHICAGO
By:______________________________
Name: ___________________________
Title: __________________________
60
Exhibit A-1
-----------
FORM OF
SUBSTITUTE REVOLVER NOTE
------------------------
$10,000,000.00 Denver, Colorado
October __, 1996
MARKWEST HYDROCARBON, INC., a Delaware corporation ("Borrower"), the successor
--------
to MarkWest Hydrocarbon Partners, Ltd., a Colorado limited partnership (the
"Partnership"), with an address of 5613 DTC Parkway, Suite 400, Englewood, CO
- ------------
80111, for value received, hereby promises to pay to the order of Norwest Bank
Colorado, National Association (successor to Norwest Bank Denver, National
Association), a national banking association ("Lender"), on or before June 30,
------
2002, the principal sum of Ten Million Dollars ($10,000,000.00), or so much
thereof as may be advanced by Lender pursuant to the Amended and Restated Loan
Agreement of even date herewith, between Borrower, Norwest Bank Colorado,
National Association, individually and as agent, First American National Bank, N
M Rothschild and Sons Limited and [First Chicago NBD] (the "Loan Agreement"),
--------------
together with interest on the outstanding unpaid principal amount at a rate
equal to the LIBOR Rate or the Base Rate, plus the Applicable Margin, as
provided in the Loan Agreement.
This Note is one of the notes referred to in the Loan Agreement as the
Revolver Notes, and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. This Note is issued in substitution,
replacement and rearrangement, but not in extinguishment or discharge, of the
Replacement Revolver Note dated September 8, 1995, as amended by the First
Allonge to Replacement Revolver Note dated as of May 31, 1996, in connection
with the assumption by Borrower of all of the obligations and business of the
Partnership and the assignment by Norwest, First American and Rothschild to
First Chicago of a portion of their interests in the Loans. All capitalized
terms used herein but not otherwise defined shall have the meanings set forth in
the Loan Agreement. All references herein to the "Loan Agreement" refer to such
agreement as it may be amended from time to time.
As of June 30, 1998, the aggregate unpaid principal amount outstanding under
this Note shall be repaid to Lender in sixteen equal quarterly installments,
commencing September 30, 1998, as more fully provided in the Loan Agreement,
together with accrued and unpaid interest thereon. All remaining outstanding
principal of and interest on this Note shall be due and payable no later than
June 30, 2002.
A-1-1
Interest shall accrue daily, shall be payable in arrears on the Interest
Payment Date, commencing October 31, 1996 and at the maturity of this Note, and
shall be calculated on the basis of a 365 or 366-day year, as appropriate for
Base Rate Loans, and a year of 360 days for LIBOR Rate Loans. All payments of
principal and interest hereof shall be made as provided in the Loan Agreement in
immediately available funds and without set-off or counterclaim or deduction of
any kind.
Notwithstanding anything to the contrary contained in this Note, overdue
principal, and (to the extent permitted under applicable law) overdue interest,
whether caused by acceleration of maturity or otherwise, shall bear interest at
the Late Payment Rate and shall be immediately due and payable.
It is not intended hereby to charge interest at a rate in excess of the
maximum rate of interest that Lender may charge to Borrower under applicable
usury and other laws, but if, notwithstanding, interest in excess of such rate
shall be paid hereunder, the interest rate on this Note shall be adjusted to the
maximum permitted under applicable law during the period or periods that the
interest rate otherwise provided herein would exceed such rate and any excess
amount applied at Lender's option to reduce the outstanding principal balance of
this Note or to be returned to Borrower.
This Note is secured by, and the holder of this Note is entitled to the
benefits of the Security Documents described in the Loan Agreement, and the
liens and security interests under the Security Documents that secure the
obligations under this Note are hereby ratified and confirmed in all respects
and remain in full force and effect. Reference is made to the Security
Documents for a description of the property covered thereby and the rights,
remedies and obligations of the holder hereof in respect thereto.
Lender shall maintain a record of all advances hereunder and all payments made
on this Note until Lender has been repaid in full; provided, however that the
-----------------
failure, error or omission by Lender to maintain such a record shall not
diminish or otherwise affect the obligation of Borrower to repay the amount
outstanding hereunder and any other amounts due to Lender.
If Borrower fails to pay any amount due under this Note and Lender has to take
any action to collect the amount due or to exercise its rights under this Note
or the Security Documents, including without limitation retaining attorneys for
collection of this Note, or if any suit or proceeding is brought for the
recovery of all or any part of or for protection of the Obligations or to
foreclose the Security Documents or to enforce Lender's rights under the
Security Documents, then Borrower agrees to pay on demand all costs and expenses
of any such action to collect, suit or proceeding, or any appeal of any such
suit or proceeding, incurred by the holder hereof, including without limitation
the fees and disbursements of attorneys for the holder hereof.
A-1-2
Borrower, and all endorsers, sureties and guarantors of this Note, hereby
severally waive demand, presentment for payment, notice of dishonor, notice of
acceleration or intent to accelerate, protest, notice of protest, diligence in
collecting and assents to any extension of time with respect to any payment due
under this Note, to any substitution or release of collateral and to the
addition or release of any party. No waiver by Lender of any payment or other
right under this Note shall operate as a waiver of any other payment or right.
If any provision in this Note shall be held invalid, illegal or unenforceable
in any jurisdiction, the validity, legality or enforceability of any defective
provisions shall not be in any way affected or impaired in any other
jurisdiction, nor shall the invalid, illegal or unenforceable provision affect
or impair any other provision of this Note.
No delay or failure of the holder of this Note in the exercise of any right or
remedy provided for hereunder shall be deemed a waiver of such right or remedy
by the holder hereof, and no exercise of any right or remedy shall be deemed a
waiver of any other right or remedy that the holder may have.
Any notices given hereunder shall be in writing and shall be given as provided
in the Loan Agreement.
At the option of Lender, an action may be brought to enforce this Note in the
District Court in and for the City and County of Denver, State of Colorado, in
the United States District Court for the District of Colorado or in any other
court in which venue and jurisdiction are proper. Borrower and all endorsers,
sureties and guarantors hereof consent to venue and jurisdiction in the District
Court in and for the City and County of Denver, State of Colorado and in the
United States District Court for the District of Colorado and to jurisdiction
and service of process under Sections 13-1-124(1)(a) and 13-1-125, Colorado
Revised Statutes (1973), as amended, in any action commenced to enforce this
Agreement.
THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
STATE OF COLORADO.
MARKWEST HYDROCARBON, INC.
By:
---------------------------------------
John M. Fox, President
By:
---------------------------------------
A-1-3
Rita E. Harvey, Director of Finance
and Treasurer
A-1-4
Exhibit A-2
-----------
FORM OF
SUBSTITUTE REVOLVER NOTE
------------------------
$10,000,000.00 Denver, Colorado
October __, 1996
MARKWEST HYDROCARBON, INC., a Delaware corporation ("Borrower"), the successor
--------
to MarkWest Hydrocarbon Partners, Ltd., a Colorado limited partnership (the
"Partnership"), with an address of 5613 DTC Parkway, Suite 400, Englewood, CO
- ------------
80111, for value received, hereby promises to pay to the order of First American
National Bank, a national banking association ("Lender"), on or before June 30,
------
2002, the principal sum of Ten Million Dollars ($10,000,000.00), or so much
thereof as may be advanced by Lender pursuant to the Amended and Restated Loan
Agreement of even date herewith, between Borrower, Norwest Bank Colorado,
National Association, individually and as agent, First American National Bank, N
M Rothschild and Sons Limited and [First Chicago NBD] (the "Loan Agreement"),
--------------
together with interest on the outstanding unpaid principal amount at a rate
equal to the LIBOR Rate or the Base Rate, plus the Applicable Margin, as
provided in the Loan Agreement.
This Note is one of the notes referred to in the Loan Agreement as the
Revolver Notes, and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. This Note is issued in substitution,
replacement and rearrangement, but not in extinguishment or discharge, of the
Replacement Revolver Note dated September 8, 1995, as amended by the First
Allonge to Replacement Revolver Note dated as of May 31, 1996, in connection
with the assumption by Borrower of all of the obligations and business of the
Partnership and the assignment by Norwest, First American and Rothschild to
First Chicago of a portion of their interests in the Loans. All capitalized
terms used herein but not otherwise defined shall have the meanings set forth in
the Loan Agreement. All references herein to the "Loan Agreement" refer to such
agreement as it may be amended from time to time.
As of June 30, 1998, the aggregate unpaid principal amount outstanding under
this Note shall be repaid to Lender in sixteen equal quarterly installments,
commencing September 30, 1998, as more fully provided in the Loan Agreement,
together with accrued and unpaid interest thereon. All remaining outstanding
principal of and interest on this Note shall be due and payable no later than
June 30, 2002.
A-2-1
Interest shall accrue daily, shall be payable in arrears on the Interest
Payment Date, commencing October 31, 1996 and at the maturity of this Note, and
shall be calculated on the basis of a 365 or 366-day year, as appropriate for
Base Rate Loans, and a year of 360 days for LIBOR Rate Loans. All payments of
principal and interest hereof shall be made as provided in the Loan Agreement in
immediately available funds and without set-off or counterclaim or deduction of
any kind.
Notwithstanding anything to the contrary contained in this Note, overdue
principal, and (to the extent permitted under applicable law) overdue interest,
whether caused by acceleration of maturity or otherwise, shall bear interest at
the Late Payment Rate and shall be immediately due and payable.
It is not intended hereby to charge interest at a rate in excess of the
maximum rate of interest that Lender may charge to Borrower under applicable
usury and other laws, but if, notwithstanding, interest in excess of such rate
shall be paid hereunder, the interest rate on this Note shall be adjusted to the
maximum permitted under applicable law during the period or periods that the
interest rate otherwise provided herein would exceed such rate and any excess
amount applied at Lender's option to reduce the outstanding principal balance of
this Note or to be returned to Borrower.
This Note is secured by, and the holder of this Note is entitled to the
benefits of the Security Documents described in the Loan Agreement, and the
liens and security interests under the Security Documents that secure the
obligations under this Note are hereby ratified and confirmed in all respects
and remain in full force and effect. Reference is made to the Security
Documents for a description of the property covered thereby and the rights,
remedies and obligations of the holder hereof in respect thereto.
Lender shall maintain a record of all advances hereunder and all payments made
on this Note until Lender has been repaid in full; provided, however that the
-----------------
failure, error or omission by Lender to maintain such a record shall not
diminish or otherwise affect the obligation of Borrower to repay the amount
outstanding hereunder and any other amounts due to Lender.
If Borrower fails to pay any amount due under this Note and Lender has to take
any action to collect the amount due or to exercise its rights under this Note
or the Security Documents, including without limitation retaining attorneys for
collection of this Note, or if any suit or proceeding is brought for the
recovery of all or any part of or for protection of the Obligations or to
foreclose the Security Documents or to enforce Lender's rights under the
Security Documents, then Borrower agrees to pay on demand all costs and expenses
of any such action to collect, suit or proceeding, or any appeal of any such
suit or proceeding, incurred by the holder hereof, including without limitation
the fees and disbursements of attorneys for the holder hereof.
A-2-2
Borrower, and all endorsers, sureties and guarantors of this Note, hereby
severally waive demand, presentment for payment, notice of dishonor, notice of
acceleration or intent to accelerate, protest, notice of protest, diligence in
collecting and assents to any extension of time with respect to any payment due
under this Note, to any substitution or release of collateral and to the
addition or release of any party. No waiver by Lender of any payment or other
right under this Note shall operate as a waiver of any other payment or right.
If any provision in this Note shall be held invalid, illegal or unenforceable
in any jurisdiction, the validity, legality or enforceability of any defective
provisions shall not be in any way affected or impaired in any other
jurisdiction, nor shall the invalid, illegal or unenforceable provision affect
or impair any other provision of this Note.
No delay or failure of the holder of this Note in the exercise of any right or
remedy provided for hereunder shall be deemed a waiver of such right or remedy
by the holder hereof, and no exercise of any right or remedy shall be deemed a
waiver of any other right or remedy that the holder may have.
Any notices given hereunder shall be in writing and shall be given as provided
in the Loan Agreement.
At the option of Lender, an action may be brought to enforce this Note in the
District Court in and for the City and County of Denver, State of Colorado, in
the United States District Court for the District of Colorado or in any other
court in which venue and jurisdiction are proper. Borrower and all endorsers,
sureties and guarantors hereof consent to venue and jurisdiction in the District
Court in and for the City and County of Denver, State of Colorado and in the
United States District Court for the District of Colorado and to jurisdiction
and service of process under Sections 13-1-124(1)(a) and 13-1-125, Colorado
Revised Statutes (1973), as amended, in any action commenced to enforce this
Agreement.
THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
STATE OF COLORADO.
MARKWEST HYDROCARBON, INC.
By:_______________________________
John M. Fox, President
By:_______________________________
A-2-3
Rita E. Harvey, Director of Finance
and Treasurer
A-2-4
Exhibit A-3
-----------
FORM OF
SUBSTITUTE REVOLVER NOTE
------------------------
$10,000,000.00 Denver, Colorado
October __, 1996
MARKWEST HYDROCARBON, INC., a Delaware corporation ("Borrower"), the successor
--------
to MarkWest Hydrocarbon Partners, Ltd., a Colorado limited partnership (the
"Partnership"), with an address of 5613 DTC Parkway, Suite 400, Englewood, CO
- ------------
80111, for value received, hereby promises to pay to the order of NM Rothschild
and Sons Limited, a company organized under the laws of England ("Lender"), on
------
or before June 30, 2002, the principal sum of Ten Million Dollars
($10,000,000.00), or so much thereof as may be advanced by Lender pursuant to
the Amended and Restated Loan Agreement of even date herewith, between Borrower,
Norwest Bank Colorado, National Association, individually and as agent, First
American National Bank, N M Rothschild and Sons Limited and [First Chicago NBD]
(the "Loan Agreement"), together with interest on the outstanding unpaid
--------------
principal amount at a rate equal to the LIBOR Rate or the Base Rate, plus the
Applicable Margin, as provided in the Loan Agreement.
This Note is one of the notes referred to in the Loan Agreement as the
Revolver Notes, and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. This Note is issued in substitution,
replacement and rearrangement, but not in extinguishment or discharge, of the
Replacement Revolver Note dated September 8, 1995, as amended by the First
Allonge to Replacement Revolver Note dated as of May 31, 1996, in connection
with the assumption by Borrower of all of the obligations and business of the
Partnership and the assignment by Norwest, First American and Rothschild to
First Chicago of a portion of their interests in the Loans. All capitalized
terms used herein but not otherwise defined shall have the meanings set forth in
the Loan Agreement. All references herein to the "Loan Agreement" refer to such
agreement as it may be amended from time to time.
As of June 30, 1998, the aggregate unpaid principal amount outstanding under
this Note shall be repaid to Lender in sixteen equal quarterly installments,
commencing September 30, 1998, as more fully provided in the Loan Agreement,
together with accrued and unpaid interest thereon. All remaining outstanding
principal of and interest on this Note shall be due and payable no later than
June 30, 2002.
A-3-1
Interest shall accrue daily, shall be payable in arrears on the Interest
Payment Date, commencing October 31, 1996 and at the maturity of this Note, and
shall be calculated on the basis of a 365 or 366-day year, as appropriate for
Base Rate Loans, and a year of 360 days for LIBOR Rate Loans. All payments of
principal and interest hereof shall be made as provided in the Loan Agreement in
immediately available funds and without set-off or counterclaim or deduction of
any kind.
Notwithstanding anything to the contrary contained in this Note, overdue
principal, and (to the extent permitted under applicable law) overdue interest,
whether caused by acceleration of maturity or otherwise, shall bear interest at
the Late Payment Rate and shall be immediately due and payable.
It is not intended hereby to charge interest at a rate in excess of the
maximum rate of interest that Lender may charge to Borrower under applicable
usury and other laws, but if, notwithstanding, interest in excess of such rate
shall be paid hereunder, the interest rate on this Note shall be adjusted to the
maximum permitted under applicable law during the period or periods that the
interest rate otherwise provided herein would exceed such rate and any excess
amount applied at Lender's option to reduce the outstanding principal balance of
this Note or to be returned to Borrower.
This Note is secured by, and the holder of this Note is entitled to the
benefits of the Security Documents described in the Loan Agreement, and the
liens and security interests under the Security Documents that secure the
obligations under this Note are hereby ratified and confirmed in all respects
and remain in full force and effect. Reference is made to the Security
Documents for a description of the property covered thereby and the rights,
remedies and obligations of the holder hereof in respect thereto.
Lender shall maintain a record of all advances hereunder and all payments made
on this Note until Lender has been repaid in full; provided, however that the
-----------------
failure, error or omission by Lender to maintain such a record shall not
diminish or otherwise affect the obligation of Borrower to repay the amount
outstanding hereunder and any other amounts due to Lender.
If Borrower fails to pay any amount due under this Note and Lender has to take
any action to collect the amount due or to exercise its rights under this Note
or the Security Documents, including without limitation retaining attorneys for
collection of this Note, or if any suit or proceeding is brought for the
recovery of all or any part of or for protection of the Obligations or to
foreclose the Security Documents or to enforce Lender's rights under the
Security Documents, then Borrower agrees to pay on demand all costs and expenses
of any such action to collect, suit or proceeding, or any appeal of any such
suit or proceeding, incurred by the holder hereof, including without limitation
the fees and disbursements of attorneys for the holder hereof.
A-3-2
Borrower, and all endorsers, sureties and guarantors of this Note, hereby
severally waive demand, presentment for payment, notice of dishonor, notice of
acceleration or intent to accelerate, protest, notice of protest, diligence in
collecting and assents to any extension of time with respect to any payment due
under this Note, to any substitution or release of collateral and to the
addition or release of any party. No waiver by Lender of any payment or other
right under this Note shall operate as a waiver of any other payment or right.
If any provision in this Note shall be held invalid, illegal or unenforceable
in any jurisdiction, the validity, legality or enforceability of any defective
provisions shall not be in any way affected or impaired in any other
jurisdiction, nor shall the invalid, illegal or unenforceable provision affect
or impair any other provision of this Note.
No delay or failure of the holder of this Note in the exercise of any right or
remedy provided for hereunder shall be deemed a waiver of such right or remedy
by the holder hereof, and no exercise of any right or remedy shall be deemed a
waiver of any other right or remedy that the holder may have.
Any notices given hereunder shall be in writing and shall be given as provided
in the Loan Agreement.
At the option of Lender, an action may be brought to enforce this Note in the
District Court in and for the City and County of Denver, State of Colorado, in
the United States District Court for the District of Colorado or in any other
court in which venue and jurisdiction are proper. Borrower and all endorsers,
sureties and guarantors hereof consent to venue and jurisdiction in the District
Court in and for the City and County of Denver, State of Colorado and in the
United States District Court for the District of Colorado and to jurisdiction
and service of process under Sections 13-1-124(1)(a) and 13-1-125, Colorado
Revised Statutes (1973), as amended, in any action commenced to enforce this
Agreement.
THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
STATE OF COLORADO.
MARKWEST HYDROCARBON, INC.
By:____________________________
John M. Fox, President
By:____________________________
A-3-3
Rita E. Harvey, Director of Finance
and Treasurer
A-3-4
Exhibit A-4
-----------
FORM OF
SUBSTITUTE REVOLVER NOTE
------------------------
$10,000,000.00 Denver, Colorado
October __, 1996
MARKWEST HYDROCARBON, INC., a Delaware corporation ("Borrower"), the successor
--------
to MarkWest Hydrocarbon Partners, Ltd., a Colorado limited partnership (the
"Partnership"), with an address of 5613 DTC Parkway, Suite 400, Englewood, CO
- ------------
80111, for value received, hereby promises to pay to the order of [First
Chicago], a national banking association ("Lender"), on or before June 30, 2002,
------
the principal sum of Ten Million Dollars ($10,000,000.00), or so much thereof as
may be advanced by Lender pursuant to the Amended and Restated Loan Agreement of
even date herewith, between Borrower, Norwest Bank Colorado, National
Association, individually and as agent, First American National Bank, N M
Rothschild and Sons Limited and [First Chicago NBD] (the "Loan Agreement"),
--------------
together with interest on the outstanding unpaid principal amount at a rate
equal to the LIBOR Rate or the Base Rate, plus the Applicable Margin, as
provided in the Loan Agreement.
This Note is one of the notes referred to in the Loan Agreement as the
Revolver Notes, and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. This Note is issued in substitution,
replacement and rearrangement, but not in extinguishment or discharge, of the
Replacement Revolver Note dated September 8, 1995, as amended by the First
Allonge to Replacement Revolver Note dated as of May 31, 1996, in connection
with the assumption by Borrower of all of the obligations and business of the
Parntership and the assignment by Norwest, First American and Rothschild to
First Chicago of a portion of their interests in the Loans. All capitalized
terms used herein but not otherwise defined shall have the meanings set forth in
the Loan Agreement. All references herein to the "Loan Agreement" refer to such
agreement as it may be amended from time to time.
As of June 30, 1998, the aggregate unpaid principal amount outstanding under
this Note shall be repaid to Lender in sixteen equal quarterly installments,
commencing September 30, 1998, as more fully provided in the Loan Agreement,
together with accrued and unpaid interest thereon. All remaining outstanding
principal of and interest on this Note shall be due and payable no later than
June 30, 2002.
A-4-1
Interest shall accrue daily, shall be payable in arrears on the Interest
Payment Date, commencing October 31, 1996 and at the maturity of this Note, and
shall be calculated on the basis of a 365 or 366-day year, as appropriate for
Base Rate Loans, and a year of 360 days for LIBOR Rate Loans. All payments of
principal and interest hereof shall be made as provided in the Loan Agreement in
immediately available funds and without set-off or counterclaim or deduction of
any kind.
Notwithstanding anything to the contrary contained in this Note, overdue
principal, and (to the extent permitted under applicable law) overdue interest,
whether caused by acceleration of maturity or otherwise, shall bear interest at
the Late Payment Rate and shall be immediately due and payable.
It is not intended hereby to charge interest at a rate in excess of the
maximum rate of interest that Lender may charge to Borrower under applicable
usury and other laws, but if, notwithstanding, interest in excess of such rate
shall be paid hereunder, the interest rate on this Note shall be adjusted to the
maximum permitted under applicable law during the period or periods that the
interest rate otherwise provided herein would exceed such rate and any excess
amount applied at Lender's option to reduce the outstanding principal balance of
this Note or to be returned to Borrower.
This Note is secured by, and the holder of this Note is entitled to the
benefits of the Security Documents described in the Loan Agreement, and the
liens and security interests under the Security Documents that secure the
obligations under this Note are hereby ratified and confirmed in all respects
and remain in full force and effect. Reference is made to the Security
Documents for a description of the property covered thereby and the rights,
remedies and obligations of the holder hereof in respect thereto.
Lender shall maintain a record of all advances hereunder and all payments made
on this Note until Lender has been repaid in full; provided, however that the
-----------------
failure, error or omission by Lender to maintain such a record shall not
diminish or otherwise affect the obligation of Borrower to repay the amount
outstanding hereunder and any other amounts due to Lender.
If Borrower fails to pay any amount due under this Note and Lender has to take
any action to collect the amount due or to exercise its rights under this Note
or the Security Documents, including without limitation retaining attorneys for
collection of this Note, or if any suit or proceeding is brought for the
recovery of all or any part of or for protection of the Obligations or to
foreclose the Security Documents or to enforce Lender's rights under the
Security Documents, then Borrower agrees to pay on demand all costs and expenses
of any such action to collect, suit or proceeding, or any appeal of any such
suit or proceeding, incurred by the holder hereof, including without limitation
the fees and disbursements of attorneys for the holder hereof.
A-4-2
Borrower, and all endorsers, sureties and guarantors of this Note, hereby
severally waive demand, presentment for payment, notice of dishonor, notice of
acceleration or intent to accelerate, protest, notice of protest, diligence in
collecting and assents to any extension of time with respect to any payment due
under this Note, to any substitution or release of collateral and to the
addition or release of any party. No waiver by Lender of any payment or other
right under this Note shall operate as a waiver of any other payment or right.
If any provision in this Note shall be held invalid, illegal or unenforceable
in any jurisdiction, the validity, legality or enforceability of any defective
provisions shall not be in any way affected or impaired in any other
jurisdiction, nor shall the invalid, illegal or unenforceable provision affect
or impair any other provision of this Note.
No delay or failure of the holder of this Note in the exercise of any right or
remedy provided for hereunder shall be deemed a waiver of such right or remedy
by the holder hereof, and no exercise of any right or remedy shall be deemed a
waiver of any other right or remedy that the holder may have.
Any notices given hereunder shall be in writing and shall be given as provided
in the Loan Agreement.
At the option of Lender, an action may be brought to enforce this Note in the
District Court in and for the City and County of Denver, State of Colorado, in
the United States District Court for the District of Colorado or in any other
court in which venue and jurisdiction are proper. Borrower and all endorsers,
sureties and guarantors hereof consent to venue and jurisdiction in the District
Court in and for the City and County of Denver, State of Colorado and in the
United States District Court for the District of Colorado and to jurisdiction
and service of process under Sections 13-1-124(1)(a) and 13-1-125, Colorado
Revised Statutes (1973), as amended, in any action commenced to enforce this
Agreement.
THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
STATE OF COLORADO.
MARKWEST HYDROCARBON, INC.
By:__________________________________
John M. Fox, President
By:__________________________________
A-4-3
Rita E. Harvey, Director of Finance
and Treasurer
A-4-4
Exhibit B
---------
MARKWEST HYDROCARBON, INC.
REQUEST FOR ADVANCE UNDER THE
-----------------------------
REVOLVER LOAN
-------------
Reference is made to that certain Amended and Restated Loan Agreement dated as
of October __, 1996 (as from time to time amended, the "Agreement"), among
---------
MarkWest Hydrocarbon, Inc. ("Borrower"), Norwest Bank Colorado, National
--------
Association, individually and as agent, and First American National Bank, N M
Rothschild and Sons Limited and [First Chicago NBD] (collectively, the
"Lenders"). Capitalized terms not otherwise defined herein shall have the
meaning assigned to them in the Agreement. Pursuant to the terms of the
Agreement, Borrower hereby requests the Lenders to make an advance to Borrower
under the Agreement as follows:
1. Date of Advance. The requested date of the proposed Advance is
______________, 19__, which is a Business Day.
2. Details of Advance.
------------------
(a) Amounts of Advance. The requested aggregate amount of the proposed
Advance is $______________.
(b) Type of Advance and Interest Period. The requested type of Loan
and Interest Period (if applicable) for the proposed Advance is (check (A) or
(B) as applicable):
[ ] (A) A LIBOR Rate Loan for an Interest Period of
(check one, as applicable):
[ ] One month
[ ] Two months
[ ] Three months
[ ] Six months
[ ] (B) A Base Rate Loan.
B-1
Borrower and the officer of Borrower signing this instrument hereby certify
that:
(a) Such officer is the duly elected, qualified and acting officer of Borrower
as indicated below such officer's signature hereto.
(b) The representations and warranties of Borrower set forth in Section 8 of
the Agreement and in the Security Documents are true and correct on and as of
the date hereof, with the same effect as though such representations and
warranties had been made on and as of the date hereof.
(c) Borrower has performed or observed all terms, agreements, conditions and
obligations in the Agreement and under the Security Documents required to be
performed or observed by Borrower on or prior to the date hereof (except those
waived in writing by the Lenders), and each of the conditions precedent to
Advances contained in the Agreement remains satisfied in all respects.
(d) No Event of Default or Unmatured Event of Default has occurred and is
continuing, or would result from the making of the requested Advance. Borrower
will use the advance hereby requested in compliance with the Agreement.
IN WITNESS WHEREOF, this instrument is executed as of _________, 199_.
MARKWEST HYDROCARBON, INC.
By:___________________________________
Name:______________________________
Title:_____________________________
B-2
Exhibit D
---------
LITIGATION
----------
1. Alloyd Insulation Company Inc. v. MarkWest Hydrocarbon Partners, Ltd. d/b/a
---------------------------------------------------------------------------
MarkWest Hydrocarbon Partners, a Limited Partnership, Civil Action No. 96-
----------------------------------------------------
C-214, Circuit Court of Wayne County, West Virginia, relating to a
mechanic's lien filed by a subcontractor on the Kenova Plant in an amount
of approximately $111,500 in connection with a dispute between Alloyd
Insulation Company Inc. and the general contractor and/or subcontractors on
the plant.
D-1
Exhibit E
---------
SUBSIDIARIES OF BORROWER
------------------------
MW Michigan, Inc.
MarkWest Resources, Inc.
E-1
Exhibit F
---------
LOCATION OF BORROWER'S INVENTORY
--------------------------------
at October 1, 996
MarkWest Hydrocarbon (Siloam plant)
U.S. Route 23
P.O. Box 575
South Shore, Kentucky 41175
MarkWest Hydrocarbon
West Memphis LPG Terminal
1282 South Eighth Street
P.O. Box 367
West Memphis, Arkansas 72302
MarkWest Hydrocarbon
Church Hill LPG Terminal
Church Hill, Tennessee
38-mile pipeline from Kenova, West Virginia to
South Shore, Kentucky
Mapco/Hutchinson, Kansas (a.k.a. Conway)
Mount Belvieu, Texas
Hattiesburg, Mississippi
F-1
Exhibit G
---------
MARKWEST HYDROCARBON, INC.
COMPLIANCE CERTIFICATE
----------------------
(REVOLVER LOAN)
(Capitalized terms not otherwise defined herein
shall have the meaning assigned to them in
the Loan Agreement)
The undersigned officer of MARKWEST HYDROCARBON, INC., ("Borrower") pursuant to
--------
Section 9(b)(iii) of the Amended and Restated Loan Agreement dated as of October
-----------------------------------
__, 1996 (the "Loan Agreement") among Borrower, Norwest Bank Colorado, National
Association, individually and as agent, and First American National Bank, N M
Rothschild and Sons, Limited and [First Chicago NBD], hereby certifies as
follows:
Computations showing compliance as of _________, 199_ with:
All computations exclude Restricted Subsidiaries.
-------
1. SECTION 9(k): CURRENT RATIO
(a) Current assets $________
(b) Current liabilities $________
(c) Actual ratio _______________
(d) Minimum per agreement 1.1 to 1.0
2. SECTION 9(l): RATIO OF FUNDED DEBT TO TOTAL
CAPITALIZATION
(a) Funded Debt (including Guarantees) $________
(b) Guarantees $________
(c) Stockholders' equity $________
(d) Total capitalization $________
(a) + (c)
(e) Actual ratio _______________%
(f) Maximum per agreement 60%
G-1
3. SECTION 9(m): TANGIBLE NET WORTH
(a) $38,000,000 PLUS $________
(b) 50% of consolidated net $________
income earned by Borrower
after September 30, 1996
(excluding net losses)
(c) Required: (a) + (b) $______________
(d) Actual $______________
4. SECTION 9(n): FIXED COVERAGE RATIO, AS OF THE END
OF ANY MONTH COMMENCING WITH THE MONTH
ENDING OCTOBER 31, 1996, CALCULATED ON A
ROLLING TWELVE MONTH BASIS
(a) Cash flow from operations $________
DIVIDED BY
(b) Debt (Interest + Principal) $________
included in (a) (& required
to be repaid) EQUALS
(c) Actual ratio ______________
(d) Minimum per agreement 1.5
5. The undersigned hereby certifies to the authenticity of the financial
statements and that the attached financial statements present fairly the
financial condition of Borrower as of the date hereof to the best of
his/her knowledge and belief after due inquiry.
6. The undersigned has read the covenants and conditions of the Loan
Agreement; this Certificate is based upon an examination of the Loan
Agreement and of the accounts and other pertinent records of Borrower.
7. In the opinion of the undersigned, he/she has made such examination and
investigations as is necessary to enable him/her to express an informed
opinion as to whether or not the covenants and conditions of the Loan
Agreement have been complied with, and, to the best of his/her knowledge:
(check either (a) or (b))
( ) (a) There exists no Unmatured Event of Default or Event of Default
on the date hereof.
( ) (b) There exists no Unmatured Event of Default or Event of
Default on the date hereof except for the following matters:
(Describe all such matters,
G-2
specifying the nature, duration and status thereof and what
action Borrower has taken or proposes to take with respect
thereto).
BORROWER:
MARKWEST HYDROCARBON, INC.
By:______________________
Name:_________________
Title:________________
Date:_________________
G-3
Exhibit H
---------
SCHEDULE OF NOTES RECEIVABLE FROM OFFICERS, EMPLOYEES
-----------------------------------------------------
at October 7, 1996
Officers and Directors:
John Fox $ -
Brian O'Neill $ -
Art Denney $ -
Bob Garvin $ 6,056.62
Rita Harvey $ 19,381.49
Employees:
William Adkins, Jr. $ 20,466.59
Dan Brown $ 17,352.87
Kathy Holland $ 27,942.80
Michael LaRue $ 97,474.06
Dan O'Meara $ 37,169.59
Henry Nickel $ 15,041.22
Randy Nickerson $ 54,907.81
Fred Shato $ -
Ronald Smith $ 10,258.58
Warren Warner $ 56,452.74
______________
$ 362,504.37
==============
H-1
Exhibit I
---------
MARKWEST HYDROCARBON, INC.
Notice of Conversion/Continuation
To Norwest Bank Colorado, National Association:
This Notice of Conversion/Continuation is given pursuant to Section 2(a)(ii) of
that certain Amended and Restated Loan Agreement, dated as of October __, 1996
as the same may have been amended to the date hereof (the "Loan Agreement"),
between MarkWest Hydrocarbon, Inc. ("Borrower"), Norwest Bank Colorado, National
Association ("Norwest"), First American National Bank ("First American"), N M
Rothschild and Sons Limited ("Rothschild") and [First Chicago NBD ("First
Chicago")] (Norwest, First American, Rothschild and First Chicago being referred
to as "Lenders"), and Norwest, as Agent on behalf of Lenders. Terms defined in
the Loan Agreement are used herein with the same meanings.
The undersigned hereby gives Agent irrevocable notice that Borrower requests a
Revolver Advance under the Loan Agreement as follows:
1. Date of Conversion/Continuation. The requested date of the
proposed conversion/continuation of Loan(s) is _____________, 19__, which is a
Business Day.
2. Details of Conversion/Continuation (check and complete (A), (B),
or (C) as applicable):
[ ] (A) Convert $____________ in principal amount of Base
Rate Loans to a LIBOR Rate Loan; with an interest period of ____
months to expire on _______________, 19__;
[ ] (B) Convert $____________ in principal amount of
LIBOR Rate Loans (with the Interest Period presently ending on
_______________, 19__) to a Base Rate Loan;
I-1
[ ] (C) Continue $___________ in principal amount of
presently outstanding LIBOR Rate Loans (with the Interest Period
presently ending on _______________, 19__), as a LIBOR Rate Loan with
an interest period of ___ months to expire on _______________, 19__.
Dated: _______________, 19__.
MARKWEST HYDROCARBON, INC.
By:________________________________
Title:_____________________________
I-2