AMENDMENT TO
PARTICIPATION, OWNERSHIP
AND
OPERATING AGREEMENT
FOR
WEST SHORE PROCESSING COMPANY.
This Amendment to Participation, Ownership Agreement for West Shore
Processing Company, is made and entered into this 12/th/ day of December,
between MICHIGAN ENERGY COMPANY, L.L.C. (MEC) AND MW MICHIGAN, INC., as
successor-in-interest to MarkWest Michigan LLC, (MarkWest).
RECITALS:
A. MEC and MarkWest entered into that certain Participation, Ownership
and Operating Agreement for West Shore Processing Company, LLC, dated May 2,
1996, as heretofore amended (the "Participation Agreement").
B. Under the Participation Agreement, among other obligations,
MarkWest was to undertake the construction and installation of compression
facilities, turbo expander extraction facilities and related facilities near the
Shell #23 Plant.
C. The parties have determined that the amounts of money specified in
the Participation Agreement with regard to those facilities do not accurately
reflect costs which may be incurred in the construction and installation of
those facilities.
Now therefore, in consideration of the mutual covenants and agreements
contained herein the parties agree as follows:
1. Section 2.1, MarkWest's Initial Contributions, Paragraph (a), shall
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be amended by deleting subparagraph (iii) thereof in its entirety and replacing
it with the following revised subparagraph (iii):
"(iii) constructing and installing compression facilities, turbo
expander extraction facilities designed to recover no less than 80% of the
propane content of the gas, and such other facilities at or near the Shell
Western E&P, Inc., #23 facility, located in Section 23, Township 22 North, Range
16 West, Manistee County, Michigan, ("Shell #23 Plant"), on terms acceptable to
MarkWest and MEC, as necessary to deliver gas into the MichCon dry header and to
extract, depropanize and/or separate natural gas liquids. Should the amount to
be paid for those facilities exceed $6,700,000, then:
A. MEC SHALL BE obligated to pay 80% of all such EXCESS AMOUNTS up to an
aggregate cost for those facilities of $8,450,000, and MarkWest shall be
obligated to pay 20% of all such excess amounts up to an aggregate cost for
those facilities of $8,450,000; and,
B. In the event the total amount to be paid for those facilities exceeds
$8,450,000, then MEC and MarkWest agree to pay their proportionate share of all
amounts exceeding that aggregate maximum based upon each Party's then applicable
Ownership Interest in the Company as specified in Article III, below;
which amounts paid by either party under A. and/or B., above, shall not be
utilized in calculating Ownership Interests hereunder. Prior to the commencement
of the construction and installation of those facilities, MEC shall have the
right to propose alternate activities with regard to the extraction of natural
gas liquids from the gas and the basis upon which MEC believes, based upon its
interest in the Company only, without regard to the interests of producers, that
such alternative will be economically advantageous to the Company. If MarkWest
agrees with MEC's proposal, based solely upon an economic analysis of the effect
on the Company without regard to any economic effect upon producers, then the
character of the facilities to be constructed will be modified accordingly.
MarkWest agrees that its concurrence to MEC's proposal shall not be unreasonably
withheld,".
2. Section 2.2, MEC's Initial Contributions and Obligations, Paragraph (d),
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shall: be amended by deleting subparagraph (ii) thereof in its entirety and
replacing it with the following revised subparagraph (ii):
"(ii) Should the amount to be paid for the facilities related to the Shell
#23 Plant, as described in Section 2.1(a)(iii), necessary to deliver gas into
THE MICHCON DRY header and to extract, fractionate and/or separate natural gas
liquids at that Plant exceed $6,700,000, then:
A. MEC shall be obligated to pay 80% of all such excess amounts up to an
aggregate cost for those facilities of $8,450,000, and MarkWest shall be
obligated to pay 20% of all such excess amounts up to an aggregate cost for
those facilities of $8,450,000; and,
B. In the event the total amount to be paid for those facilities exceeds
$8,450,000, then MEC and MarkWest agree to pay their proportionate share of all
amounts exceeding that aggregate maximum based upon each Party's then applicable
Ownership Interest in the Company as specified in Article III, below,".
3. Except for the foregoing, all other terms and provisions of the
Participation Agreement shall remain in full force and effect.
In Witness Whereof, the parties have executed this Amendment the date first
above written.
MICHIGAN ENERGY COMPANY, L.L.C.
/S/ Michael V. Ronca, Manager
and
/S/ Robert L. Zorich, Manager
MW MICHIGAN, INC.
/S/ Arthur J. Denney, Vice President