Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 99 560K
2: EX-3.1 Certificate of Incorporation 8 30K
3: EX-3.2 Bylaws 14 55K
4: EX-10.1 Reorganization Agreement 21 93K
13: EX-10.10 Gas Treating and Processing Agreement 48 131K
14: EX-10.11 Gas Gathering, Treating and Processing Agreement 36 99K
15: EX-10.12 Gas Gathering, Treating and Processing Agreement 32 104K
16: EX-10.13 Products Exchange Agreements 3 20K
17: EX-10.14 Gas Processing and Treating Agreement 11 44K
18: EX-10.15 Processing Agreement 30 66K
19: EX-10.16 Natural Gas Liquids Purchase Agreement 7 31K
20: EX-10.17 Purchase and Demolition Agreement 25 52K
21: EX-10.18 Purchase and Demolition Agreement 25 53K
22: EX-10.19 Agreement to Design and Construct New Facilities 21 43K
5: EX-10.2 Modification Agreement 6 34K
23: EX-10.20 Sales Acknowledgement 3 18K
24: EX-10.21 Loan Agreement Dated November 20, 1992 202 752K
25: EX-10.23 Natural Gas Liquids Purchase Agree. (Boldman) 14 46K
26: EX-10.25 1996 Incentive Compensation Plan 5 23K
27: EX-10.26 1996 Stock Incentive Plan of Registrant 13 52K
28: EX-10.27 1996 Nonemployee Director Stock Option Plan 9 40K
29: EX-10.28 Form of Non-Compete With J.M. Fox & Markwest 1 10K
6: EX-10.3 Amended and Restated Mortgage 41 166K
7: EX-10.4 Secured Guaranty, Dated May 2, 1996 23 62K
8: EX-10.5 Security Agreement, Dated May 2, 1996 23 78K
9: EX-10.6 Pledge Agreement, Dated May 2, 1996 21 70K
10: EX-10.7 Participation, Ownership and Operating Agreement 83 290K
11: EX-10.8 Second Amended and Restated Agreement 10 45K
12: EX-10.9 Subordination Agreement 13 47K
30: EX-11 Computation of Per Share Earnings 1 9K
31: EX-23.1 Consent of Price Waterhouse LLP 1 9K
32: EX-23.2 Consent of Bdo Seidman, LLP 1 10K
LOAN AGREEMENT Among
MARKWEST HYDROCARBON PARTNERS, LTD.
and
NORWEST BANK DENVER, NATIONAL ASSOCIATION,
individually and as Agent,
and
FIRST AMERICAN NATIONAL BANK
November 20, 1992
TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS 1
SECTION2. THE LOANS 9
(a) The Term Loan 9
(b) The Revolver Loan 10
(c) The Loan Date 12
(d) Computation and Payment of Interest; Late Payment Rate 12
(e) Payments by Borrower 12
(f) Payments to Lenders 12
(g) Mandatory Payments 13
(h) Fees 13
(i) Adjustments 14
(j) Increased Capital 14
SECTION 3. CONDITIONS OF LENDING 15
(a) Initial Advance 15
(b) Second Advance on the Term Loan 18
(c) Subsequent Advances 19
SECTION 4. BORROWING BASE 20
(a) Initial Borrowing Base 20
(b) Information 20
(c) Subsequent Determinations of Borrowing Base 20
(d) Notification of Borrowing Base 21
SECTION 5. BORROWING BASE DEFICIENCY 21
(a) Repay Excess Debt 21
(b) Installment Payments 21
SECTION 6. SECURITY 21
SECTION 7. REPRESENTATIONS AND WARRANTIES 22
(a) Existence 22
(b) Non-Contravention 23
(c) Third Party Authorization 23
(d) Authorization; Binding Effect 23
(e) Litigation 23
(f) Taxes 23
(g) Liens 24
(h) Names and Places of Business 24
(i) Use of Proceeds 24
(j) Other Obligations 24
(k) Full Disclosure 24
(l) Margin Stock 25
(m) ERISA 25
(n) Security Documents 25
(o) Compliance with Laws 25
(p) Financial Condition 26
(q) Environmental Matters 26
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(r) Investment Company Act 26
(s) Public Utility Holding Company Act 26
(t) Title to Properties; First Priority Security Interest 26
(u) Partners, Shareholders and Subsidiaries of Borrower
and of Related Persons 27
(v) Location of Inventory 27
SECTION 8. AFFIRMATIVE COVENANTS 27
(a) Payment and Performance of Loans 27
(b) Financial Statements 27
(c) Preservation of Existence, Etc. 29
(d) Maintenance of Property 29
(e) Payment of Other Obligations 29
(f) Insurance 30
(g) Inspection of Property, Books and Records;
Confidentiality Agreement 31
(h) Notices 32
(i) Compliance with Laws 33
(j) Further Assurances 33
(k) Current Ratio 34
(l) Funded Debt to Total Capitalization 34
(m) Tangible Net Worth 34
(n) Fixed Charge Coverage Ratio 34
(o) Environmental Matters 34
(p) Additional Title Insurance 34
SECTION 9. NEGATIVE COVENANTS 35
(a) Debt 35
(b) Liens 36
(c) Guaranty Obligations 36
(d) Loans and Advances 37
(e) Limitation on Investments and New Businesses 37
(f) Mergers and Consolidations 37
(g) Location of Inventory 38
(h) Burdensome Undertakings 38
(i) Change in Location of Business 38
(j) Restricted Distributions 38
(k) Disposition of Assets 39
(l) ERISA 39
(m) Use of Proceeds 39
(n) Transactions with Affiliates 40
(o) Contracts; Take-or-Pay Agreements 40
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(p) Amendments to Organizational Documents 41
(q) Amendments to RIMCO Loan Documents 41
SECTION 10. EVENTS OF DEFAULT 41
(a) Non-Payment 41
(b) Certain Defaults 41
(c) Other Defaults 41
(d) Representation or Warranty 41
(e) Security Documents and Covenant Agreements 42
(f) Judgments 42
(g) Insolvency 42
(h) Bankruptcy, Etc. 42
(i) Cross-Default 43
(j) ERISA 43
(k) Loan Documents 43
(1) Material Adverse Change 44
(m) Partners of Borrower 44
(n) Ownership of the General Partner 44
(o) Failure to be a Partnership 44
(p) Columbia Contracts 44
(q) Regulatory Change 44
SECTION 11. REMEDIES 44
(a) Automatic Acceleration of Loan 44
(b) Optional Acceleration of Loan 45
(c) Setoff 45
SECTION 12. THE AGENT 46
(a) Appointment 46
(b) Delegation of Duties 46
(c) Exculpatory Provisions 46
(d) Reliance by Agent 47
(e) Notice of Default 47
(f) Non-Reliance on Agent and Other Lenders 47
(g) Indemnification 48
(h) Agent and Lenders in Their Individual Capacity 49
(i) Successor Agent 49
(j) Agent's Fee 49
(k) Borrower Entitled to Rely on Agent 49
SECTION 13. MISCELLANEOUS 49
(a) No Waiver; Cumulative Remedies 49
(b) Notices 50
(c) Counterpart Execution 51
(d) Governing Law; Entire Agreement 51
(e) Amendments and Waivers 51
(f) Costs, Expenses and Indemnity 52
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(g) Inconsistent Provisions; Severability 53
(h) Incorporation of Exhibits and Schedules 53
(i) Amendment of Defined Instruments 53
(j) References and Titles 54
(k) Calculations and Determinations 54
(1) Usury 54
(m) Waiver of Right to Trial by Jury 54
(n) Successors and Assigns 55
(o) Term of Agreement 55
(p) Jurisdiction 55
LIST OF EXHIBITS
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Exhibit Title
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A Term Note
B Revolver Note
C Request for Advance
D Covenant Agreement
E Borrower's Counsel Opinion
F Local Counsel Opinion
G [Intentionally Omitted]
H Litigation
I Limited Partners of Borrower & Shareholders
of the General Partner
J Location of Borrower's Inventory
K Compliance Certificate
L Loans and Advances to Officers and Employees
M Form of Subordination Agreement
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LOAN AGREEMENT
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THIS LOAN AGREEMENT (this "Agreement"), dated as of November 20, 1992, is
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among MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower") with an address of 5613 DTC Parkway, Suite 400, Englewood, Colorado
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80111, NORWEST BANK DENVER, NATIONAL ASSOCIATION, a national banking association
("Norwest"), with an address of 1740 Broadway, Denver, Colorado 80274-8699,
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FIRST AMERICAN NATIONAL BANK, a national banking association ("First American"),
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with an address of 4894 Poplar Ave., Memphis, Tennessee 38117, (Norwest and
First American are referred to individually as a "Lender" and collectively as
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the "Lenders"), and NORWEST, AS AGENT FOR THE BANKS (in such capacity, the
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"Aqent").
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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 heroin. Accordingly, in consideration of the mutual
agreements, provisions and covenants contained heroin, the parties agree as
follows:
SECTION 1. DEFINITIONS. As used herein, each of the following
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capitalized terms shall have the meaning given it in this Section 1:
"Adjusted Prime Rate" shall mean an annual rate which equals
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the sum of the floating commercial loan rate of the Agent announced from time to
time as its prime rate but which may not be the lowest or best rate charged by
the Agent to any customer (the "Prime Rate") plus one percentage point per year,
adjusted in each case as of the banking day in which a change in the Prime Rate
occurs.
"Advance" shall mean the advances under the Term Loan or a
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Revolver Advance.
"Affiliate" shall mean as to any Person, each other Person
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which, directly or indirectly (through one or more intermediaries or otherwise),
is in control of, is controlled by, or is under common control with, such
Person.
"Borrowing Base," shall mean, at the particular time in
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question, either the amount provided for in Section 4(a) or the amount
determined by the Lenders in accordance with the provisions of Section 4(c);
provided however, that in no event shall the Borrowing Base exceed $20,000,000.
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"Borrowing Base Deficiency" shall have the meaning set forth
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in Section 5.
"Business Day" shall mean a day other than Saturdays or
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Sundays on which commercial banks are open for business with the public in
Denver, Colorado and Memphis, Tennessee.
"Code" means the Internal Revenue Code of 1986, as amended,
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together with the regulations promulgated thereunder.
"Collateral" shall mean all tangible or intangible, real or
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personal property subject to any of the Security Documents.
"Columbia Contracts" shall mean (a) the Natural Gas Liquids
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Purchase Agreement dated as of April 26, 1988 between Columbia Gas Transmission
Corporation and Borrower 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 Gas Transmission
Corporation and Borrower as amended January 28, 1991 (Boldman); and (c) the
Contract for Construction and Lease of Boldman Plant dated December 24, 1990
between Columbia Gas Transmission Corporation and Borrower, 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.
"Consolidated" refers to the consolidation of any Person, in
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accordance with GAAP, with its properly consolidated subsidiaries. Reference
heroin 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.
"Controlled Group" means the Borrower and all Persons under
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common control or treated as a single
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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.
"Covenant Agreements" shall mean a letter agreement in the
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form of Exhibit D attached hereto, one from each of the General Partner and John
Fox.
"Current Ratio" shall mean the ratio of Borrower's current
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assets to current liabilities, both determined in accordance with GAAP.
"Debt" shall mean as to any Person, at a particular date,
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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 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
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4(c)(ii).
"Employee Option Agreement" shall mean the Option Plan of
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MarkWest Hydrocarbon Partners, Ltd. dated April 6, 1992 (without regard to any
future amendments, modifications or changes thereto without the required
Lenders' prior consent).
"ERISA" shall mean the Employee Retirement Income Security
-----
Act of 1974, as 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
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Section 302 of 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).
"Evaluation Date" shall mean the date of this Agreement and
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April 1 and October 1 of each year, commencing April 1, 1993.
"Event of Default" shall have the meaning set forth in
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Section 10.
"First American Loan" shall mean the loan to Borrower
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pursuant to a Loan Agreement dated June 19, 1992 in the principal amount not to
exceed $3,500,000 and secured by an Arkansas Leasehold Deed of Trust with
Security Agreement and Assignment of Rents and Leases dated June 19, 1992.
"Fiscal Quarter" shall mean a three-month period ending on
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the last day of each March, June, September and December of any year.
"Fiscal Year" shall mean a twelve-month period ending on
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December 31 of any year.
"Fixed Charge Coverage Ratio" shall mean for any period, the
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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) and the principal portion of Debt required to be
repaid during such period.
"Florida Mesa Project" shall mean the project in which the
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Borrower has invested, the purpose of which is the drilling, production, and
gathering of coal bed methane gas located in La Plata County, Colorado.
"Funded Debt" shall mean the aggregate amount of Debt for
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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.
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"GAAP" shall mean generally accepted accounting principles
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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.
"General Partner" means MarkWest Hydrocarbon, Inc., a
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Colorado corporation.
"Initial Financial Statements" shall mean the audited
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financial statements of Borrower for the Fiscal Year ending December 31, 1991,
and the unaudited quarterly financial statements (consisting of a current
balance sheet and profit and loss statement) for Borrower as of September 30,
1992.
"Late Payment Rate" shall have the meaning set forth in
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Section 2(d)(ii).
"Loans" shall mean the Term Loans and the Revolver Loans.
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"Loan Date" shall have the meaning set forth in Section
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2(c).
"Loan Documents" means this Agreement, the Notes, the
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Security Documents, the Covenant Agreements 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 and First
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American, fifty percent.
"Mortgages" shall mean one or more mortgages, deeds of
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trust, collateral mortgages, acts of collateral mortgage, security agreements
and assignments of proceeds of even date herewith, 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, 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.
"NationsBank Loan" shall mean the loan to Borrower pursuant
to a Credit Agreement with NationsBank of Texas, N.A., formerly known as NCNB
Texas National Bank, dated April 16, 1990, as it may have been amended prior to
the date hereof, in the principal amount of $7,000,000 and secured by a Security
Agreement dated as of April 16, 1990 by 'Borrower in favor of NationsBank Texas,
N.A.
"Note" shall mean a Term Note or a Revolver Note; all of
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which together shall be collectively referred as the "Notes."
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"Obligations" means all Debt from time to time owing by
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Borrower to the Lenders under or pursuant to any of the Loan Documents,
including without limitation the Revolver Loan and the Term Loan.
"Ordinary Course of Business" shall mean, in respect of any
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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, and, as applied to Borrower, shall include the
acquisition of natural gas reserves and investments or participation in the
Florida Mesa Project or other coal bed methane gas projects.
"Person" shall mean an individual, partnership, corporation,
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association, business trust, joint stock
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company, trust or trustee thereof, unincorporated association, joint venture,
governmental unit or any agency or subdivision thereof, or any other legally
recognizable entity.
"Related Person" shall mean any of Borrower and each
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Subsidiary of Borrower.
"Request for Advance" shall mean a request for Advance
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meeting the requirements of Sections 2(a)(i) or 2(b)(i) hereof.
"Required Lenders" shall mean at any time Lenders, the Loan
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Shares of which aggregate 100 percent.
"Responsible Person" shall mean any officer of the General
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Partner or any other Person employed by either a Related Person or the General
Partner and who should be aware of the terms of this Agreement.
"Revolver Advances" has the meaning given it in Section
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2(b).
"Revolver Commitment" means the amount of the Borrowing Base
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then in effect minus the Term Balance; provided that in no event shall the
Revolver Commitment exceed $20,000,000 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(b)(ii).
"Revolver Commitment Period" shall mean the period from the
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date of this Agreement to and including December 31, 1994, or such earlier date
on which the Revolver Notes become due and payable.
"Revolver Loan" shall mean the loan to Borrower by the
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Lenders provided for in Section 2(b) hereof, the maximum principal amount of
which shall never exceed the Revolver Commitment.
"Revolver Note" shall mean a note substantially in the form
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of Exhibit B attached hereto, made by Borrower and payable to the order of
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Norwest or to First American, as appropriate, with appropriate insertions,
together with any and all renewals, extensions, amendments and changes of, or
substitutions for said note; collectively, the "Revolver Notes."
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"RIMCO Loan" shall mean the loan to Borrower pursuant to the
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Note Agreement dated December 15, 1989 in principal amount up to $11,500,000,
and secured by a Mortgage and Security Agreement dated as of April 29, 1988, to
Rimco Partners, L.P., as modified by a First Modification and Amendment of
Mortgage and Security Agreement dated as of January 15, 1990 between Borrower
and Rimco Partners, L.P., as agent for itself and others, and by Second
Modification and Amendment of Mortgage and Security Agreement dated as of
October 1, 1990, between Borrower and RIMCO Partners, L.P., the Resigning Agent,
and Resource Investors Management Company Limited Partnership, the Successor
Agent.
"Security Aqreement" shall mean that certain Security
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Agreement of even date herewith by Borrower in favor of the Agent covering and
relating to Borrower's inventory, receivables, contract rights, Cash Collateral
Instruments, proceeds and certain other personal property.
"Security Documents" means the Mortgages and all other
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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.
"Subsidiary" means, with respect to any Person, any
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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 partners' equity of
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Borrower less intangible assets.
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"Term Balance" means the aggregate unpaid principal balance
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of the Term Notes determined as of the most recent Determination Date prior to
the time in question.
"Term Loan" has the meaning given it in Section 2(a).
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"Term Note" shall mean a note substantially in the form of
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Exhibit A attached hereto, made by Borrower and payable to the order of Norwest
or to First American, as appropriate, with appropriate insertions, together with
any and all renewals, extensions, amendments and changes of, or substitutions
for said note; collectively, the "Term Notes."
"Total Capitalization" means the sum of Funded Debt plus
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partners' equity.
"Unmatured Event of Default" shall mean any event that with
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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
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pursuant to that certain Working Capital Loan Agreement of even date herewith
between Borrower, the Lenders and the Agent in the maximum principal amount of
$5,000,000 and which loan is secured by various 'Security Documents' (as such
term is defined therein).
SECTION 2. THE LOANS.
(a) The Term Loan. Subject to the terms and conditions of
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this Agreement, each Lender agrees to make two Advances to Borrower in an
aggregate principal amount of both such Advances not to exceed its Loan Share of
$13,500,000 (the "Term Loan"). The Advances of the Term Loan shall be evidenced
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by the Term Notes. Amounts repaid under the Term Notes may not be reborrowed.
(i) Request for Advance under the Term Loan. Each
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Request for Advance relating to the two Advances to
be made under the Term Loan shall be in the form of
Exhibit C attached hereto and shall be submitted to
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the Agent on or before 11:00 a.m. Denver, Colorado
time on the Business Day immediately preceding the
day such Advance is to be made. Upon receipt of a
Request for Advance, the Agent shall promptly
notify each Lender thereof. Not later than 11:00
a.m. Denver time on the next Business Day, each
Lender shall make available to the 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 the Lenders shall
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not be obligated to make an Advance to Borrower
that would result in the outstanding principal
amount under the Term Notes exceeding $13,500,000.
If all conditions precedent to each Advance have
been met, Agent will on the date requested make
such Advance available to Borrower in immediately
available funds at Agent's office in Denver,
Colorado.
(ii) Dates of Advances under the Term Loan. The
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first Advance under the Term Loan shall' not exceed $3,500,000
and shall be made on the Loan Date and the Second Advance shall
be made on December 1, 1992 in an amount not to exceed
$10,000,000.
(iii) Scheduled Payments on the Term Loan. The
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principal amount of the Term Notes shall be due and payable in
twenty-four equal quarterly payments of $562,500.00, payable on
the last day of each Fiscal Quarter, commencing March 31, 1993,
with the final payment due on or before December 31, 1998,
together with interest on the Term Loan, calculated and payable
as set forth in Section 2(d).
(iv) Optional Prepayments of the Term Loan.
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Borrower may prepay all or any portion of the Term 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 prepaid. Borrower
shall give the Agent one Business Day's notice prior to any
prepayment of the Term Loan. All prepayments of principal under
this Subsection shall be applied to the payment of principal
indebtedness due on the Term Loan in the inverse order of
approaching maturities.
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(b) The Revolver Loan. Subject to the terms and conditions
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of this Agreement, each Lender agrees to make advances to Borrower (such
advances are called the "Revolver Advances") from time to time during the
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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.
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(A) Each Request for Advance under the
Revolver Loan shall be in the form of Exhibit C
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attached hereto and shall be submitted to the Agent
on or before 11:00 a.m. Denver, Colorado time on
the Business Day immediately preceding the day such
Revolver Advance is requested to be made. Upon
receipt of a Request for Advance, the Agent shall
promptly notify each Lender thereof. Not later than
11:00 a.m. Denver time on the next Business Day,
each Lender shall make available to the 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 the
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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 .
(B) Each Revolver Advance shall be in an
amount of at least $100,000 or such lesser amount equal to the
unadvanced portion of the Revolver Loan. Each Revolver Advance shall
be evidenced by the Revolver Notes.
(C) All Revolver Advances requested by
Borrower shall be made pro rata by each Lender in proportion to such
Lender's Loan Share.
(ii) 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
March 31, 1995, with the final payment due on or
before December 31, 1998, together with interest on
the Revolver Loan, calculated and payable as set
forth in Section 2(d).
(iii) Optional Payments. Borrower may make optional
-----------------
payments on the outstanding principal balance of the Revolver 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.. Borrower shall give the
Agent one Business Day's notice in advance of any optional payment on
the Revolver Loan. Upon the termination of the Revolver Commitment
Period, all prepayments of principal thereafter received under this
Subsection shall be applied to the payment of principal indebtedness
due on the Revolver Loan in the inverse order of approaching
maturities.
(c) The Loan Date. The initial Advance under the Term Loan
-------------
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) below have been satisfied or waived by the Lenders. The initial
Revolver Advance shall not be made prior to the date of the second and final
Advance to be made under the Term Loan.
(d) Computation and Payment of Interest; Late Payment Rate.
------------------------------------------------------
-11-
(i) Interest on the Loans shall accrue daily and
shall be computed on the basis of a year of 365 or
366 days, as appropriate. Interest on the Loans
shall be payable in arrears on the last day of each
Fiscal Quarter, beginning December 31, 1992.
(ii) 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 Adjusted
Prime Rate (the "Late Payment Rate)", until paid, and shall be
-----------------
due and payable immediately.
(e) 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.
(f) 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 payment, the portion of the aggregate amount received by Agent
on such day multiplied by the Loan Share of such Lender.
(g) 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 5 hereof, make one or more mandatory prepayments to
Agent for distribution to the Lenders in the principal amount determined in
accordance with Section 5(a) or (b). If the Borrower elects, pursuant to Section
5(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(g). Each
prepayments 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, (i) first to the unpaid principal
balance of the Revolver Loan until the Revolver Loan is paid in full (once the
Revolver Commitment Period has expired, such prpepayment shall be applied in the
inverse order of approaching maturities) and (ii) then to the unpaid principal
balance of the Term Loan until the Term Loan is paid in full, in the inverse
order of approaching maturities.
(h) 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, 1992 (for the
period from the date hereof through December 31,
1992) 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 $100,000 in the aggregate, of which
$10,000 has already been paid.
(i) 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 ll(c), or otherwise), in a greater proportion than its
Loan Share, such benefitted Lender shall purchase for cash from the other Lender
such portion of such other Lender's Loans, or shall provide such other Lender
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 Lender; 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
-12-
purchase price and benefits returned, to the extent of such recover~, but
without interest. Borrower agrees that 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.
(j) 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(j)
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 OF LENDING.
----------------------
(a) Initial Advance. (i) 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 Mortgages, duly executed
and acknowledged by Borrower, together with the appropriate 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) With respect to the Collateral consisting of
real property, 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 Mortgages create and constitute 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;
(E) With respect to the Siloam fractionating
facility covered by the Mortgages, one or more environmental site
assessments with respect to that portion of the Collateral as the
Agent may request, dated as of a recent date' and prepared by a
qualified environmental engineering firm acceptable to the Agent which
environmental site assessments shall be acceptable to the Lenders in
their sole discretion;
(F) Evidence satisfactory to the Agent that all
amounts outstanding under each of the First American Loan and the
NationsBank Loan are being simultaneously paid in full from the
proceeds of the Term Loan, or, as to the NationsBank Loan, from
proceeds of the Working Capital Facility, by Borrower and all
commitments of the lenders thereunder have been terminated and
released and the liens and security interests securing such loans have
been or simultaneously herewith are being fully released or
reconveyed;
(G) Results of UCC lien searches as to Borrower
for the States of Arizona, Arkansas, Colorado, Kansas, Michigan, Texas
and West Virginia and for the following counties: Crittenden County,
Arkansas; Boyd, Greenup and Pike Counties, Kentucky; and Wayne County,
West Virginia, and for all other relevant filing jurisdictions as to
the Collateral;
(H) Evidence that the 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
-13-
Section 8(f);
(I) The Covenant Agreements, executed by the
parties thereto;
(J) A duly executed and acknowledged
subordination agreement between Resource Investors Management Company
Limited Partnership and the Agent, in form and substance acceptable to
the Agent;
(K) A certificate, dated the Loan Date and
executed on behalf of Borrower by the president or a vice president of
the General Partner, stating the substance of Subsections 3(a)(ii)(A),
(C) and (D);
(L) A certificate, dated the Loan Date and
executed on behalf of Borrower by an appropriate party, which shall
certify to the correctness and completeness of the following exhibits
attached thereto: copies of any partnership authorization of Borrower
authorizing the execution of the Loan Documents and the consummation
of the transactions contemplated heroin and therein; copies of the
limited partnership agreement of Borrower and all amendments thereto,
and the certificate of limited partnership of Borrower;
(M) A certificate, dated the Loan Date and
executed by the Secretary or assistant Secretary of the General
Partner, which shall contain the names and signature of the officers
of the General Partner authorized to execute the Loan Documents on
behalf of the Borrower, and which shall certify to the correctness and
completeness of the articles of incorporation and bylaws of the
General Partner, and the resolutions duly adopted by the Board of
Directors of the General Partner authorizing the execution of the Loan
Documents and the consummation of the transactions contemplated herein
and therein;
(N) Certificates from the Colorado Secretary of
State as to the good standing of Borrower and of the General Partner;
and
(O) 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 7 and in the Security Documents shall be true on the Loan
Date 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
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 a favorable opinion addressed to the Agent
and the Lenders of (x) Barry Spector, Esq., counsel for Borrower,
substantially in the form set forth in Exhibit E, together with the
---------
certificate provided for in such Exhibit, which opinion shall cover
the matters set forth in Sections 7(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, and (y) Rex M. Terry, Esq. of Hardin,
Jesson, Dawson & Terry, local counsel for Arkansas, and P. Bruce
Leslie, Esq. of McBrayer, McGinnis, Leslie & Kirkland, local counsel
for Kentucky, substantially in the form of Exhibit F attached hereto;
---------
(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, 1991, there has been no
material adverse change in the business, financial position or results
of operations of Borrower.
-14-
(b) Second Advance on the Term Loan. The
-------------------------------
obligation of the Lenders to make the second and final Advance under the Term
Loan as set forth in Section 2 is subject to satisfaction of the conditions set
forth in such Section, the satisfaction of all of the conditions set forth in
Section 3(c) and the following conditions precedent:
(i) The date of such Advance shall be
December 1, 1992;
(ii) Agent shall have received
concurrently with the making of such Advance a duly executed and
acknowledged subordination agreement between Resource Investors
Management Company Limited Partnership and the Agent and Statements of
Amendment to uniform commercial code filings, in substantially the
form of Exhibit M hereto;
---------
(iii) Counterparts of the Mortgage
relating to the West Virginia property, duly executed and acknowledged
by Borrower, together with the appropriate 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, which
Mortgage shall be in form and substance acceptable to Lenders ;
(iv) The Agent shall have received a
favorable opinion addressed to the Agent and the Lenders of George A.
Patterson, Esq. of Bowles Rice McDavid Graff & Love, local counsel for
West Virginia, in form and substance acceptable to the Lenders; and
(v) Results of the UCC lien search as
to Borrower for Kanawha County, West Virginia, satisfactory to
Lenders.
(c) Subsequent Advances. The obligation of the
-------------------
Lenders to make subsequent Advances under the Revolver Commitment and to make
the second and final Advance under the Term Loan, all as set forth in Section 2
is subject to satisfaction of the conditions set forth in such Section, the
satisfaction of the conditions set forth in Setion 3(c) and the following
conditions precedent:
(i) A certificate, dated the date of
the requested Advance and executed on behalf of Borrower by the
president or a vice president of the General Partner, stating the
substance of Subsections 3(a)(ii)(A), (C) and (D);
(ii) All representations and warranties
contained in Section 7 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, 1991, there has
been no material adverse change in the business, financial position or
results of operations of Borrower;
(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.
SECTION 4. BORROWING BASE.
---------------
(a) Initial Borrowinq Base. During the period from the date
-----------------------
hereof to the first Determination Date (as defined in Subsection 4(c)(ii)
below), the Borrowing Base shall be $20,000,000.
-15-
(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 Borrowinq Base. (i) The
-------------------------------------------
Lenders shall determine the Borrowing Base (which shall never exceed
$20,000,000) semi-annually, as of April 1 and October 1 of each year that this
Agreement is in effect, commencing April 1, 1993, based upon the Obligations
then outstanding, the value and associated cash flow available for debt service
which the lender assign, in their sole discretion, to Borrower's oil and gas
reserves, its natural gas liquids processing plants, fractionater, and propane
terminal, 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 4(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 4(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.
(d) Notification of Borrowinq Base. The Agent shall give
------------------------------
written notice to Borrower of the amount determined pursuant to Section 4(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 4(d), the Borrowing Base shall be
the amount determined pursuant to this Section 4 for the immediately preceding
period.
SECTION 5. 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(g) 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(g) hereof.
Failure of Borrower to comply with this Section 5 shall be an
immediate Event of Default.
SECTION 6. 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 7. REPRESENTATIONS AND WARRANTIES. Borrower represents and
------------------------------
warrants to the Agent and each Lender that:
(a) Existence.
---------
-16-
(i) Borrower is a limited partnership duly
organized, validly existing and in good standing
under the laws of the State of Colorado, and is
qualified to do business in Arkansas, Kentucky,
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);
(ii) Each of 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 Related Person, its business, operations,
assets, property, prospects or condition (financial or otherwise);
(iii) Each Related Person 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 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, 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 is a party or
is subject or by which any Related Person 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.
(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 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 and the General Partner.
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 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 H attached
---------- ---------
hereto, there are no actions, suits, proceedings or claims against any Related
Person or the General Partner 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 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 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 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.
-17-
(g) Liens. All property and assets of Borrower are free and
-----
clear of all liens and encumbrances except (i) the liens permitted by Section
9(b) hereof, and (ii) the liens pursuant to the First American Loan and the
NationsBank Loan, both of which will be released simultaneously with the
execution of this Agreement.
(h) Names and Places of Business. No Related Person has
----------------------------
been known by, or used any other partnership, trade, or fictitious name. The
chief executive office and principal place of business of Borrower and the
General Partner have been located at the address of Borrower set out in Section
13(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 13(b), and has been there
for at least the four months immediately preceding the date hereof.
(i) Use of Proceeds. (i) The proceeds of the Term Loan
---------------
shall be used solely to finance existing assets of Borrower and to repay the
principal of and accrued interest on outstanding Debt of Borrower, including
repayment in full of the First American Loan, , and (ii) 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.
(j) Other Obligations. No Related Person 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 Related 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 the
General Partner 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 the General Partner 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 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.
(o) Compliance with Laws. Each Related Person 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 Borrower's financial position at the date thereof and the results
of Borrower's operations and cash flows for the period thereof. Since December
31, 1991, there has been no material adverse change in the business, financial
position or results of operations of Borrower.
-18-
(q) Environmental Matters. (i) The operations of each
---------------------
Related Perso 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 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 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 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 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
----------------------------------
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 and the General Partner have good and indefeasible title to
all of their respective material properties and assets, free and clear of all
liens except those permitted by Section 9(b) hereof. Upon filing and recording
of the Mortgages and the related financing statements in the locations
specified in the opinions provided to the Lenders pursuant to Section
3(a)(ii)(B) hereof, the Agent, on behalf of the Lenders will have a perfected
first priority lien or security interest in all of the Collateral.
(u) Partners, Shareholders and Subsidiaries of Borrower and
-------------------------------------------------------
of Related Persons. The General Partner is the sole general partner of Borrower.
------------------
The identity of the limited partners of Borrower and their respective limited
partnership interests are set forth in Exhibit I hereto and the identity and
---------
percentage ownership interest of the shareholders of General Partner are set
forth in Exhibit I. Borrower does not presently have any Subsidiaries or own any
---------
stock or equity interest in any corporation, partnership, joint venture or
association, except for Borrower's interests in the Florida Mesa Project and
except, after the date hereof, interests acquired as permitted by Section 9(e)
hereof.
(v) Location of Inventory. The location of all of
---------------------
Borrower's inventory is set forth in Exhibit J hereto.
---------
SECTION 8. AFFIRMATIVE COVENANTS. Until payment in full of tile 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 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, together with an
unqualified opinion, based on an audit conducted
by Price Waterhouse or other independent certified
publi c 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);
(ii) Within 45 calendar days after the end of
each calendar month, an unaudited
-19-
monthly income statement, balance-sheet and statement of cash flows
for the subject month, prepared in reasonable detail and in accordance
with GAAP, 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 8(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 financial officer of the
General Partner of Borrower in the form of Exhibit K 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 120 calendar days after the end of
each Fiscal Year, annual unaudited Consolidated financial statements
of the General Partner, together with all notes thereto, prepared in
reasonable detail in accordance with GAAP applied on a basis
consistent with prior years; provided, however, that if the General
-------- -------
Partner has an audited financial statement prepared for any reason, at
any time, then such audited financial statement shall be promptly
furnished to the Agent together with any opinion obtained from its
independent certified public accountants relating thereto;
(v) 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 the
General Partner may make to, or file with, the Securities and Exchange
Commission or any stock exchange; and
(vi) 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.
(c) Preservation of Existence, Etc. (i) Borrower shall
------------------------------
maintain in full force and effect Borrower's existence as a limited partnership
and its good standing under the laws of the State of Colorado and its right to
transact business in the States of Arkansas, Kentucky, Texas and West Virginia;
and (ii) each Related Person 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 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 Obliqations.
----------------------------
(i) Each Related Person 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
-20-
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 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 cancelled, 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 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 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 8(g). Borrower
agrees that if either Lender breaches its confidentiality agreement contained in
this Section 8(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 or any other
Related Person;
(ii) Any Event of Default or Unmatured Event of
Default;
(iii) The institution of any litigation or other
proceeding before any governmental body or official against any
Related Person or any of their respective assets and any developments
in any pending
-21-
litigation or other proceeding before any governmental body or
official that could materially affect Borrower or such Related Person,
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 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) 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 shall maintain a Current Ratio
-------------
of not less than 1.1 to 1.0.
(1) Funded Debt to Total Capitalization. Borrower's Funded
-----------------------------------
Debt shall not exceed 65% of its Total Capitalization.
(m) Tangible Net Worth. Borrower shall maintain a Tangible
------------------
Net Worth equal to or greater than the sum of $15,000,000 plus 25 percent of
consolidated net income determined in accordance with GAAP and earned by
Borrower after December 31, 1991 (but excluding any net losses).
(n) Fixed Charge Coverage Ratio. Borrower shall maintain a
---------------------------
Fixed Charge Coverage Ratio, determined as of the end of any Fiscal Quarter,
commencing with the Fiscal, Quarter ending December 31, 1992, calculated on a
rolling four quarter basis, Of not less than 1.5.
(o) Environmental Matters. No Related Person 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
-22-
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.
(p) Additional Title Insurance. 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 ALTA 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.
SECTION 9. NEGATIVE COVENANTS. Until payment in full of the Loans and
------------------
termination of all commitments by the Lenders to make Advances hereunder,
neither Borrower 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;
(ii) Debt incurred to finance the acquisition or
construction by Borrower of one or more projects consistent with
Borrower's covenant contained in Section 9(e) hereof and for which
recourse is limited to the property included in the project and is no-
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 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 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 or any Related Person's
business; and
(vi) Debt under the RIMCO Loan in a maximum
principal amount not to exceed at any one time outstanding (A) $11,500,000 from
the date hereof through and including December 1, 1992, and (B) $500,000
thereafter.
(b) Liens. Create, assume or permit to exist any mortgage,
-----
pledge, security interest, lien or other encumbrance upon any 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;
(iv) Liens or encumbrances, if any, permitted by
the Security Documents; and
-23-
(v) Liens securing Debt permitted by Section 9
(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 Energy Partners, Ltd. in
connection with the Florida Mesa Project so long as such guarantees do not
exceed $1,000,000 in the aggregate at any one time, and (ii) 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 L.
---------
(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 acquisitions of or capital
contributions to or other investments in any Person 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 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 either 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 the General Partner 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 J 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 net 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) Chance 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.
-24-
(j) Restricted Distributions. Make any dividends or
------------------------
distributions of assets or declare or pay any cash or liquidating distribution
or dividends or make any other distribution to any of its partners or
shareholders, other than the following:
(i) Whether or not an Event of Default. or
Unmatured Event of Default has occurred or is
continuing, Borrower may make distributions to
each of its partners in an amount equal to such
partner's estimated federal and state income tax
liabilities (assuming each partner is taxable at
the maximum marginal income tax rates) resulting
from such partner's interest in Borrower. Such
distribution shall not occur earlier than 30 days
prior to the date such payments are due;
(ii) So long as a Borrowing Base Deficiency does
not exist and no Event of Default or Unmatured Event of Default has
occurred, Borrower may make distributions in an aggregate cumulative
amount not to exceed 75 percent of Borrower's net income, determined in
accordance with GAAP and computed on a cumulative basis for all periods
since December 31, 1991, taking into account allowable distributions
previously declared or made since December 31, 1991; provided, however,
-------- -------
that such distributions are allowable so long as they would not cause
Borrower to be in contravention of the financial covenants contained in
Sections S(k), (1), (m) and (n); and
(iii) As to any Subsidiary of Borrower, the
foregoing restrictions of this Section 9(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 in the Ordinary Course of Business;
and
(ii) sales, transfers, leases, exchanges or other
dispositions of assets by Borrower and the other Related Persons 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.
(1) 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 Related Person's business and that is upon fair and reasonable
terms no less favorable to such Related Person than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of such Related Person.
(o) Contracts; Take-or-Pay Agreements. Amend or modify 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.
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
-25-
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 bonefitting 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
--------------------------------------
partnership agreement of Borrower or any other organizational document of any
Related Person.
(q) Amendments to RIMCO Loan Documents. Amend, modify or
----------------------------------
waive, or consent or acquiesce in the amendment, modification, or waiver of any
term or provision of any document evidencing or securing the RIMCO Loan, or any
other document executed in connection with the RIMCO loan.
SECTION 10. 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.
(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), 8(b), (c)(ii), (g), (h), (k), (1), (m) or (n), or
Sections 9 (a) through (q), 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 10(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 and Covenant Agreements.
(i) Occurrence of any of the events of default
defined in any of the Security Documents or
Covenant Agreements.
(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 9(b) hereof or by the
applicable 'Security Document.
(iii) Any of the Covenant Agreements shall cease
to be in full force and effect.
(iv) Failure of the General Partner or John Fox,
as applicable, to perform or observe any covenant, agreement,
condition or provision contained in its or his respective Covenant
Agreement.
(v) Failure by Borrower to perform or observe
any term, covenant, agreement, condition or provision contained in the
Security Agreement.
-26-
(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 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 the General Partner
----------
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.
(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 the General Partner (except for
an involuntary petition against any Related Person or the General Partner, 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 the General
Partner 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 the General Partner by the Lenders or either of them,
including without limitation the Working Capital Facility, or by any third
party, including without limitation, the RIMCO Loan, 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 or any of the Covenant Agreements 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.
(1) 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).
(m) Partners of Borrower. The General Partner ceases to be
--------------------
the sole general partner of Borrower. Any change occurs in the identity or
ownership interests of any limited partner of Borrower owning at least a 10%
interest at such time, other than pursuant to the Employee Option Agreement or
pursuant to the RIMCO Loan documents.
(n) Ownership of the General Partner. John Fox and the
members of his immediate family cease to own collectively at least seventy-five
percent (75%) of the issued and outstanding voting stock of General Partner.
(o) Failure to be a Partnership. Borrower is not treated as
---------------------------
a partnership for federal income tax purposes.
(p) Columbia Contracts. Any of the Columbia Contracts shall
------------------
cease to be in full force and effect for any reason, including, without
limitation, as the result of being rejected or disaffirmed by Columbia Gas
Transmission Corporation, a debtor in possession under federal bankruptcy laws.
-27-
(q) 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 11. REMEDIES. (a) Automatic Acceleration of Loan. Upon the
--------
occurrence of any Event of Default specified in Section 10(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 ll(a) above, the
Agent 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 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 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 12. THE AGENT.
---------
(a) Appointment. Each Lender hereby irrevocably designates
an -----------
d 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
-28-
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 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, 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
-29-
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
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 13. 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 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 Partners, Ltd.
5613 DTC Parkway, Suite 400
Englewood, Colorado 80111
Attention: Finance Department
Fax. No.: (303) 290-8769
-30-
If to the Lenders, to:
Norwest Bank Denver, National Association
1700 Broadway
Denver, Colorado 80274-0099
Attention: Energy and Minerals Group
Fax. No.: (303) 863-5196
First American National Bank
4894 Poplar Avenue
Memphis, TN 38117
Attention: National Accounts
Fax. No.: (901) 762-5665
If to the Agent, to:
Norwest Bank Denver, National Association
1700 Broadway
Denver, Colorado 80274-0099
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) Governinq 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, the Covenant Agreements 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.
(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
-31-
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, subject however, to the terms of the
letter agreement between Borrower and the Agent regarding the maximum legal fees
to be charged by the Agent's counsel for the preparation and execution of the
Loan Documents to be delivered at closing, (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 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 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.
-32-
(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.
(1) 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 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 AssiqnS. 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
-----------------
13(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.
EXECUTED to be effective as of the day and year first above written.
MARKWEST HYDROCARBON PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner By
By /s/ Patrick W. Murray
Patrick W. Murray,
Vice President
-33-
NORWEST BANK DENVER,
NATIONAL ASSOCIATION,
individually and as Agent
By /s/ Mark Williamson
___________________________
Mark Williamson,
Vice President
FIRST AMERICAN NATIONAL BANK
By /s/ David C. May
____________________________
David C. May,
Vice President
-34-
EXHIBIT A
---------
FORM OF TERM NOTE
---------
$6,750,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), with an address of 5613 DTC Parkway, Suite 400, Englewood, CO
80111, for value received,
hereby promises to pay to the order of ,
a national banking association ("Lender"), on or before
December 31, 1998, the principal sum of Six Million Seven
Hundred Fifty Thousand Dollars ($6,750,000.00), together with
interest on the outstanding unpaid principal balance at the
Adjusted Prime Rate as provided in the Loan Agreement of even
date herewith between Borrower, Norwest Bank Denver, National
Association, individually and as agent, and First American
National Bank (the "Loan Agreement").
------
This Note is one of the notes referred to in the Loan Agreement as the
Term Notes, and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Loan Agreement.
The outstanding principal amount of this Note shall be payable as
provided in the Loan Agreement, in twenty-four equal quarterly installments due
on the last day of each calendar quarter, commencing March 31, 1993, as more
fully described in the Loan Agreement. The entire outstanding principal balance
of this Note shall be due and payable on or before December 31, 1998 (unless
payable sooner pursuant to the terms of the Loan Agreement), together with
accrued and unpaid interest thereon.
Interest shall accrue daily, shall be payable on the last day of each
calendar quarter, commencing December 31,
1992 and at the maturity of this Note, and shall be calculated on the basis of a
365 or 366-day year, as appropriate. 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.
A-1
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.
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 the advances hereunder and all
payments made on this Note until Lender has been repaid in full, as set forth on
Schedule I hereto; 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.
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.
A-2
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 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(!)(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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By
Patrick W. Murray, Vice President
&
A-3
Schedule I
----------
Date
Principal
Amount
of Term Loan
------------
Amount of Payment
Outstanding Principal Balance
.
A-I -1
EXHIBIT B
---------
FORM OF REVOLVER NOTE
-------------
$10,000,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), with an address of 5613 DTC Parkway, Suite 400, Englewood, CO
80111, for value received,
hereby promises to pay to the order of ,
a national banking association ("Lender"), on or before
December 31, 1998, the principal sum of Ten Million Dollars
($10,000,000.00), or so much thereof as may be advanced by
Lender pursuant to the Loan Agreement of even date herewith
between Borrower, Norwest Bank Denver, National Association,
individually and as agent, and First American National Bank
(the "Loan Agreement"), together with interest on the
------------
outstanding unpaid principal balance at the Adjusted Prime
Rate 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. All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Loan Agreement.
As of December 31, 1994, the aggregate unpaid principal amount
outstanding under this Note shall be repaid to Lender in sixteen equal quarterly
installments, commencing March 31, 1993, 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 December 31, 1998.
Interest shall accrue daily, shall be payable on the last day of each
calendar quarter, commencing December 31,. 1992 and at the maturity of this
Note, and shall be calculated on the basis of a 365 or 366-day year, as
appropriate. 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.
B-1
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. 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, as set forth on
Schedule I hereto; 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.
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.
B-2
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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By
Patrick W. Murray, Vice President
. 4
B-3
Date
Schedule I
----------
Principal
Amount of Advance
----------
Amount of Payment
Outstanding Principal Balance
. ~
B-!-I
EXHIBIT C
---------
MARKWEST HYDROCARBON PARTNERS, LTD.
REQUEST FOR ADVANCE UNDER THE
-----------------------------
REVOLVER/TERM LOAN
------------------
Reference is made to that certain Loan Agreement
dated as of.November 20, 1992 (as from time to time amended,
the "Agreement"), among MarkWest Hydrocarbon Partners, Ltd.
("Borrower"), Norwest Bank Denver, National Association,
individually and as agent, and First American National Bank
(collectively, the "Lenders"). Capitalized terms not
otherwise defined heroin 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 in the amount of $ ,such
advance being evidenced by the Notes, and specifies
,-199 , as the date Borrower desires for the Lenders to make such
advance.
Borrower and the officer of the General Partner of Borrower signing
this instrument hereby certify that:
(a) Such officer is the duly elected, qualified and acting officer of
the General Partner of Borrower as indicated below such officer's signature
hereto.
(b) The representations and warranties of Borrower set forth in
Section 7 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.
C-1
IN WITNESS WHEREOF, this instrument is executed as of , 199-.
MARKWEST HYDROCARBON PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray, Vice President
C-2
. &
EXHIBIT D-1 COVENANT AGREEMENT
------------------------------
(STOCKHOLDER)
-------------
THIS COVENANT AGREEMENT (this "Agreement") dated as of November 20, 1992 is made
------------
by JOHN FOX, a Colorado resident ("Stockholder"), in favor of NORWEST BANK
DENVER, NATIONAL ASSOCIATION, a national banking association, as agent (the
"Agent") for itself, and FIRST AMERICAN NATIONAL BANK, a national banking
association (Agent, in its individual capacity, and First American National Bank
are collectively called "Lenders").
WITNESSETH:
WHEREAS, Stockholder and his wife own directly or indirectly eighty-five
percent (85%) of the outstanding shares of stock of MarkWest Hydrocarbon, Inc.,
a Colorado corporation, the general partner of Markwest Hydrocarbon Partners,
Ltd., a Colorado limited partnership ("Borrower");
WHEREAS, Borrower has executed in favor of Lenders those two certain
promissory notes of even date herewith, each payable to the order of one of the
Lenders, in an aggregate principal amount not to exceed $5,000,000 (such
promissory notes, as from time to time amended, and all promissory notes given
in substitution, renewal or extension therefor or thereof, in whole or in part,
being herein collectively referred to as the "Working Capital Notes");
----------------
WHEREAS, the Working Capital Notes were executed pursuant to a Working
Capital Loan Agreement of even date herewith (herein, as from time to time
amended, supplemented or restated, called the "Working Capital Loan Agreement"),
----------------------
by and between Borrower, Agent and Lenders, pursuant to which Lenders have
agreed to advance funds to Borrower under the Working Capital Notes which are to
be used by Borrower as provided in the Working Capital Loan Agreement;
WHEREAS, Borrower has executed in favor of Lenders those two certain
promissory notes of even date herewith, each payable to the order of one of the
Lenders, in an aggregate principal amount not to exceed $20,000,000, (such
promissory notes, as from time to time amended, and all promissory notes given
in substitution, renewal or extension therefor or thereof, in whole or in part,
being herein collectively referred to as the "Revolver Notes");
----------
D-I-1
WHEREAS, Borrower has executed in favor of Lenders those two certain
promissory notes of even date herewith, each payable to the order of one of the
Lenders, in an aggregate principal amount not to exceed $13,500,000 (such
promissory notes, as from time to time amended, and all promissory notes given
in substitution, renewal or extensions therefor or thereof, in whole or in part,
being herein collectively referred to herein as the "Term Notes"; the Working
------
Capital Notes, the Revolver Notes and the Term Notes are herein collectively
referred to as the "Notes");
WHEREAS, the Revolver Notes and the Term Notes were all executed pursuant
to a Loan Agreement of even date herewith (herein, as from time to time amended,
supplemented or restated, called the "Revolver/Term Loan Agreement"), by and
-----------------
between Borrower, Agent and Lenders, pursuant to which Lenders have agreed to
advance funds to Borrower under the Revolver Notes and the Term Notes which are
to be used by Borrower as provided in the Revolver/Term Loan Agreement.
(The Working Capital Loan Agreement and the Revolver/Term Loan Agreement shall
be referred to herein collectively as the "Loan Agreements");
------
WHEREAS, it is a condition precedent to the Lenders' obligation to
advance funds pursuant to the Revolver/Term Loan Agreement or advance funds or
issue letters of credit pursuant to the Working Capital Loan Agreement that the
Stockholder shall execute and deliver this Agreement to Agent and Lenders; and
WHEREAS, the Stockholder has determined that his execution, delivery and
performance of this Agreement may reasonably be expected to benefit. him,
directly or indirectly, and are in the best interest of the Stockholder.
NOW THEREFORE, in consideration of the premises and of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to induce the Lenders to advance
funds under the Loan Agreements and issue letters of credit, the Stockholder
hereby agrees with Agent and Lenders as follows:
1. Definitions. Reference is hereby made to each of the Loan
-------------
Agreements for all purposes. All terms used in this Agreement which are defined
in the Revolver/Term Loan Agreement and not otherwise defined herein shall have
the same meanings when used herein. If at any time either of the Loan Agreements
shall be terminated or otherwise cease to be in full force and effect, then all
references herein to "Loan
D-I-2
Agreements" shall thereafter be deemed to refer to the Loan Agreement still in
force and effect.
2. Representations and Warranties of Stockholder. To induce Agent
---------------------------------------------
and Lenders to enter into the Loan Agreements, the Stockholder represents and
warrants to Agent and Lenders that:
(a) Capacity. Stockholder has the requisite capacity and
--------
contractual power necessary for the execution and delivery by him of this
Agreement and the performance of his obligations hereunder.
(b) Enforceable Obligations. This Agreement is a legal, valid
-----------------------
and binding obligation of Stockholder, enforceable in accordance with its terms
except as such enforcement may be limited by bankruptcy, insolvency or similar
laws of general application relating to the enforcement of creditors' rights.
3. Debt Guaranteed by the Stockholder. Without the prior written
----------------------------------
consent of the Agent, the Stockholder shall not in any manner assume, guarantee,
endorse or otherwise become or be contingently liable (by direct or indirect
agreement, contingent or otherwise, or by operation of law, to provide funds for
payment or otherwise assure a creditor against loss) for the Debt, obligation,
undertaking or other liability of Borrower, or otherwise become or be
responsible in any manner (whether by agreement .~3 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 Borrower,
except endorsements of negotiable instruments for deposit or collection and
similar transactions in the ordinary course of his business.
4. Waivers. No action which Agent or Lenders may take or omit to
-------
take in connection with any of the Loan Documents or any of the indebtedness
evidenced by the Notes shall release or diminish Stockholder's obligations,
duties or agreements hereunder,. including, but not limited to the following
actions from time to time: (a) taking or holding any property of any type from
any Person as security for the indebtedness evidenced by the Notes, and
exchanging, enforcing, waiving and releasing any or all of such property, (b)
applying the Collateral or such other property and directing the order or manner
of sale thereof as Agent or Lenders may, in their discretion, determine which is
not inconsistent with the Loan Documents, (c) releasing any of the obligations
of any other Person in respect of any or all of the Obligations (as such term is
defined in each of the Loan
D-1-3
Agreements) or other security for the Obligations,
(d) waiving, enforcing or supplementing any of the provisions of any Loan
Document, (e) renewing, consolidating, extending, modifying, compromising,
rearranging or amending from time to time any of the Notes or the terms of any
one or more of the Loan Documents, including, without limitation, extending the
maturity date of any of the Notes; (f) increasing the Collateral or the amount
of the Debt under either of the Loan Agreements; (g) the invalidity,
unenforceability or insufficiency of any one or more of the Loan Documents or
any lien or security interest securing payment or performance thereunder, or (h)
the failure of the Stockholder to receive notice of any one or more of the
foregoing actions or events.
The Stockholder specifically acknowledges and agrees that Agent and
Lenders may, at their option without notice to or further consent of
Stockholder, take any of the foregoing actions and that if Agent or Lenders
elect to take any of the foregoing actions or any of the foregoing events occur,
that such actions or events shall in no way reduce, affect, impair or limit the
covenant and agreement of the Stockholder hereunder.
5. Amendments. No modification or amendment of or supplement to
------------
this Agreement shall be valid or effective unless the same is in writing and
signed by the party against whom it is sought to be enforced.
6. Governinq Law. This Agreement shall be governed by and construed
---------------
in accordance with the laws of the State of Colorado in all respects, including
construction, validity and performance.
7. Counterparts. This Agreement may be separately executed by the
--------------
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to constitute one and the same instrument.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
-----------------------------------------------------------------
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
-----------------------------------------------
BE CONTRADICTED BY EVIDENCE OF PRIOR~ CONTEMPORANEOUS, OR SUBSEQUENT ORAL
-------------------------------------------------------------------------
AGREEMENT OF THE PARTIES.
-------------------------
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
--------------------------------------------------
PARTIES.
--------
D-I-4
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
STOCKHOLDER:
JOHN FOX
NORWEST BANK DENVER, NATIONAL ASSOCIATION, a
national banking association, individually and
as agent
By:
Mark Williamson, Vice President
FIRST AMERICAN NATIONAL BANK, a national
banking association
By:
David C. May,
Vice President
. E I &
D-l-5
EXHIBIT D-2
-----------
COVENANT AGREEMENT
------------------
(GENERAL PARTNER)
THIS COVENANT AGREEMENT (this "Agreement") dated as of November 20,
1992 is made by MARKWEST HYDROCARBON, INC., a Colorado corporation ("General
---------
Partner"), in favor of NORWEST BANK DENVER, NATIONAL ASSOCIATION, a national
----------
banking association, as agent (the "Agent") for itself, and FIRST AMERICAN
-------
NATIONAL BANK, a national banking association (Agent, in its individual
capacity, and First American National Bank are collectively called "Lenders").
W I T N E S S~ T H:
WHEREAS, the General Partner is the sole general partner of Markwest
Hydrocarbon Partners, Ltd., a Colorado limited partnership ("Borrower");
-------------
WHEREAS, Borrower has executed in favor of Lenders those two certain
promissory notes of even date herewith, each payable to the order of one of the
Lenders, in an aggregate principal amount not to exceed $5,000,000 (such
promissory notes, as from time to time amended, and all promissory notes given
in substitution, renewal or extension therefor or thereof, in whole or in part,
being herein collectively referred to as the "Working Capital Notes");
-------------------------
WHEREAS, the Working Capital Notes were executed pursuant to a Working
Capital Loan Agreement of even date herewith (herein, as from time to time
amended, supplemented or restated, called the "Workinq Capital Loan Agreement"),
----------------------------------
by and between Borrower, Agent and Lenders, pursuant to which Lenders have
agreed to advance funds to Borrower under the Working Capital Notes which are to
be used by Borrower as provided in the Working Capital Loan Agreement;
WHEREAS, Borrower has executed in favor of Lenders those two certain
promissory notes of even date herewith, each payable to the order of one of the
Lenders, in an aggregate principal amount not to exceed $20,000,000, (such
promissory notes, as from time to time amended, and all promissory notes given
in substitution, renewal or extension therefor or thereof, in whole or in part,
being herein collectively referred to as the "Revolver Notes");
------------------
WHEREAS, Borrower has executed in favor of Lenders those two certain
promissory notes of even date herewith, each
D-2-1
payable to the order of one of the Lenders, in an aggregate principal amount not
to exceed $13,500,000 (such promissory notes, as from time to time amended, and
all promissory notes given in substitution, renewal or extensions therefor or
thereof, in whole or in part, being heroin collectively referred to heroin as
the "Term Notes"; the Working Capital Notes, the Revolver Notes and the Term
-------------
Notes are heroin collectively referred to as the "Notes");
WHEREAS, the Revolver Notes and the Term Notes were all executed
pursuant to a Loan Agreement of even date herewith (heroin, as from time to time
amended, supplemented or restated, called the "Revolver/Term Loan Agreement"),
--------------------------------
by and between Borrower, Agent and Lenders, pursuant to which Lenders have
agreed to advance funds to Borrower under the Revolver Notes and the Term Notes
which are to be used by Borrower as provided in the Revolver/Term Loan
Agreement.
(The Working Capital Loan Agreement and the Revolver/Term Loan Agreement shall
be referred to herein collectively as the "Loan Agreements");
-----------------
WHEREAS, it is a condition precedent to the Lenders' obligation to
advance funds pursuant to the Revolver/Term Loan Agreement or advance funds or
issue letters of credit pursuant to the Working Capital Loan Agreement that the
General Partner shall execute and deliver this Agreement to Agent and Lenders;
and
WHEREAS, the General Partner has determined that its execution,
delivery and performance of this Agreement may reasonably be expected to benefit
the General Partner, directly or indirectly, and are in the best interest of the
General Partner.
NOW THEREFORE, in consideration of the premises and of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to induce the Lenders to advance
funds under the Loan Agreements and issue letters of credit, the General Partner
hereby agrees with Agent and Lenders as follows:
1. Definitions. Reference is hereby made to each of the Loan
------------
Agreements for all purposes. All terms used in this Agreement which are defined
in the Revolver/Term Loan Agreement and not otherwise defined heroin shall have
the same meanings when used heroin. If at any time either of the Loan Agreements
shall be terminated or otherwise cease to be in full force and effect, then all
references heroin to "Loan Agreements" shall thereafter be deemed to refer to
the Loan Agreement still in force and effect.
D-2-2
2. Representations and Warranties of General Partner. To induce
---------------------------------------------------
Agent and Lenders to enter into the Loan Agreements, the General Partner
represents and warrants to Agent and Lenders that:
(a) Capacity. General Partner has the requisite capacity and
---------
contractual power necessary for the execution and delivery by it of this
Agreement and the performance of its obligations hereunder.
(b) Enforceable Obligations. This Agreement is a legal, valid and
-------------------------
binding obligation of General Partner, enforceable in accordance with its terms
except as such enforcement may be limited by bankruptcy, insolvency or similar
laws of general application relating to the enforcement of creditors' rights.
3. Debt Guaranteed by the General Partner. Without the prior
----------------------------------------
written consent of the Agent, the General Partner shall not in any manner
assume, guarantee, endorse or otherwise become or be contingently liable (by
direct or indirect agreement, contingent or otherwise, or by operation of law,
to provide funds for payment or otherwise assure a creditor against loss) for
the Debt, obligation, undertaking or other liability of Borrower, 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 Borrower, except endorsements of negotiable instruments for deposit or
collection and similar transactions in the ordinary course of its business.
4. Waivers. No action which Agent or Lenders may take or omit to
---------
take in connection with any of the Loan Documents or any of the indebtedness
evidenced by the Notes shall release or diminish General Partner's obligations,
duties or agreements hereunder, including, but not limited to the following
actions from time to time: (a) taking or holding any property of any type from
any Person as security for the indebtedness evidenced by the Notes, and
exchanging, enforcing, waiving and releasing any or all of such property, (b)
applying the Collateral or such other property and directing the order or manner
of sale thereof as Agent or Lenders may, in their discretion, determine which is
not inconsistent with the Loan Documents, (c) releasing any of the obligations
of any other Person in respect of any or all of the Obligations (as such term is
defined in each of the Loan Agreements) or other security for the Obligations,
(d) waiving, enforcing or supplementing any of the provisions
D-2-3
of any Loan Document, (e) renewing, consolidating, extending, modifying,
compromising, rearranging or amending from time to time any of the Notes or the
terms of any one or more of the Loan Documents, including, without limitation,
extending the maturity date of any of the Notes; (f) increasing the Collateral
or the amount of the Debt under either of the Loan Agreements; (g) the
invalidity, unenforceability or insufficiency of any one or more of the Loan
Documents or any lien or security interest securing payment or performance
thereunder, or (h) the failure of the General Partner to receive notice of any
one or more of the foregoing actions or events.
The General Partner specifically acknowledges and agrees that Agent
and Lenders may, at their option without notice to or further consent of General
Partner, take any of the foregoing actions and that if Agent or Lenders elect to
take any of the foregoing actions or any of the foregoing events occur, that
such actions or events shall in no way reduce, affect, impair or limit the
covenant and agreement of the General Partner hereunder.
5. Amendments. No modification or amendment of or supplement to
------------
this Agreement shall be valid or effective unless the same is in writing and
signed by the party against whom it is sought to be enforced.
6. Governing Law. This Agreement shall be governed by and construed
---------------
in accordance with the laws of the State of Colorado in all respects, including
construction, validity and performance.
7. Counterparts. This Agreement may be separately OSecuted by the
--------------
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to constitute one and the same instrument.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
-----------------------------------------------------------------
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
------------------------------------------------------------------------------
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
-------------------------------------------------------------------
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
----------------------------------------------------------
D-2-4
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
GENERAL PARTNER:
MARKWEST HYDROCARBON, INC., a Colorado
corporation
By:
'Patrick W. Murray, Vice President
NORWEST BANK DENVER, NATIONAL ASSOCIATION, a
national banking association, individually and
as agent
By:
Mark Williamson, 'Vice President
FIRST AMERICAN NATIONAL BANK, a national
banking association
By:
David C. May, Vice President
D-2-5
BARRY W. SPECTOR
Attorney
EXHIBIT E
Suite 3301 Prudential Plaza
1050 Seventeenth Street
Denver, Coloradu 80265
Telephone (303) ~23-0717
Fax (303) 6~,3-09.~.0
November 30, 1992
Norwest Bank Denver, National
Association, individually and as Agent 1740 Broadway
Denver, CO 80274-8699
First American National Bank
4894 Poplar Avenue
Memphis, TN 38117
Ladies and Gentlemen:
I have acted as counsel for MarkWest Hydrocarbon Partners, Ltd., a Colorado
limited partnership ("Borrower"), in connection with the transactions
contemplated by the Loan Agreement dated as of November 20, 1992 (the
"Revolver/Term Loan Agreement"), both among Borrower, Norwest Bank Denver,
National Association and First American National Bank (collectively the
"Lenders') and Norwest Bank Denver, National Association, as agent for the
Lenders ("Agent"). The Revolver/Term Loan Agreement and the Working Capital
Agreement are referred to herein collectively as the "Loan Agreements."
I am rendering this opinion pursuant to subsection 3(a)(ii)(B) of the
Revolver/term Loan Agreement and subsection 4(a)(ii)(B) of the Working Capital
Loan Agreement. Capitalized terms used but not defined herein shall have the
meanings set forth in the Revolver/Term Loan Agreement, except that the term
"Collateral" shall have the meaning set forth in the Mortgages (as such term is
defined below).
Materials Examined:
-------------------
As a basis for the opinion hereinafter expressed, I have examined executed
counterparts (unless otherwise noted) of the following:
1. Revolver/Term Loan Agreement.
2. Working Capital Loan Agreement.
3. The Notes (as such term is defined in the Mortgages described below).
4. The Arkansas Leasehold Deed of Trust with Security Agreement,
Assignment of Rents and Leases and Financing Statement, dated as of November 20,
1992, by and among Borrower, as Grantor, the Trustees named therein and Agent,
as Beneficiary, including the Exhibits thereto (the "Arkansas Mortgage").
5. (a) The Mortgage, Security Agreement, Assignment of Profits and
Proceeds and Financing Statement, dated as of November 20, 1992, by and among
Borrower, as Mortgagor, and Agent, as Mortgagee, including the Exhibits thereto
(Siloam); and (b) the Mortgage, Security Agreement, Assignment of Profits and
Proceeds and FinanCing Statement, dated as of November 20, 1992, by and among
Borrower, as Mortgagor, and Agent, as Mortgagee, including the Exhibits thereto
(Boldman). ((a) and (b) are collectively called the "Kentucky Mortgages").
6. A Credit Line Deed of Trust with Security Agreement, Assignment of
Rents and Leases and Financing Statement, dated as of November 20, 1992, by and
among Borrower, as Grantor, the Trustee named therein and Agent, as Beneficiary,
including the Exhibits thereto (the "West Virginia Mortgage").
7. A Security Agreement dated as of November 20, 1992, between Borrower
and Agent (the "Security Agreement").
8. The financing statements for use in the States of Arizona, Arkansas,
Colorado, Kansas, Kentucky, Michigan and West Virginia, naming Borrower as
debtor, and Agent as secured party (collectively the "Financing Statements"),
relating to the Mortgages and the Security Agreement.
9. The Covenant Agreement of Stockholder dated as of November 20, 1992,
by John Fox in favor of Agent.
10. The Covenant Agreement of General Partner dated as of November 20,
1992, by the General Partner in favor of Agent.
11. The opinions of Rex M. Terry, Esq. of Hardin, Jesson, Dawson & Terry;
P. Bruce Leslie, Esq. of McBrayer, McGinnis, Leslie & Kirkland; and George A.
Patterson, Esq., of Bowles, Rice, McDavid, Groff & Love (the "Local Counsel
Opinions").
The documents described in paragraphs 1 through 10 collectively referred to
as the "Principal Documents". The Arkansas Mortgage and the Kentucky Mortgages
are herein collectively called the "Mortgages".
Assumptions:
------------
In rendering the opinions hereinafter expressed, I have made the following
assumptions:
2-
A. The Lenders are duly organized, validly existing and in good standing
under the laws of the states or governmental bodies under which they are
organized.
Bm
executed
Borrower).
Each of the Principal Documents has been duly authorized, and delivered by the
parties thereto (other than
C. The Principal Documents constitute legal, valid and binding
obligations of the parties thereto (other than Borrower), enforceable against
such parties (other than Borrower) in accordance with their respective terms,
and all parties (other than Borrower) to the Principal Documents have all
necessary power and authority to enter into and perform the transactions
contemplated thereby.
D. None of the execution, delivery or performance of the Principal
Documents by any party thereto (other than Borrower) will result in any
violation of or be in contravention of or constitute a default under the
charter, bylaws or other governing documents of such party, or any other
contract or agreement binding on such party or its properties.
E. The transactions provided for in the Principal Documents are
supported by sufficient and adequate consideration, and a loan has been made and
is currently outstanding, which loan is intended to be secured by the Mortgages.
F. All signatures are genuine, all documents submitted to me as
originals are authentic, and all documents submitted to me as photocopies,
telecopies or facsimiles conform to the original documents.
Opinion:
--------
Based upon the foregoing, and subject to the qualifications, limitations
and assumptions stated herein, I am of the opinion that:
1. (a) Borrower is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Colorado, and is
qualified to do business in Arkansas, Kentucky, Texas 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);
(b) Each of 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
Related Person, its business, operations, assets, property, prospects or
condition (financial or otherwise);
(c) Each Related Person has the power and authority to own the
property which it owns and to carry on its business as such business is now
conducted.
2. The execution, delivery and performance by the Borrower of the
Principal Documents and the borrowings thereunder and the consummation of the
transactions contemplated therein will not conflict with the limited partnership
agreement or other organizational or governing documents of any Related Person;
or conflict with any law, rule or regulation which conflict would result in a
materially adverse affect on Borrower, its business, operations, assets,
property, prospect or condition; or to the best of my knowledge, conflict with
or result in any breach of any mortgage, lien, lease, agreement, instrument,
order, judgment, decree or, any other restriction of any kind or character to
which any Related Person is a party or is subject or by which any Related Person
or its properties are bound or affected.
3. 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 in connection with the
execution, delivery or performance by Borrower of the Principal Documents or to
consummate any transactions contemplated thereby, or the incurring of
indebtedness by Borrower or the granting of the liens by Borrower under the
Mortgages.
4. Borrower has full power and authority to enter into the Principal
Documents. The execution and delivery of the Principal Documents, and the
performance and observance of their terms, conditions and obligations, have been
duly authorized by all necessary action by Borrower and the General Partner and
the Principal Documents are duly executed and delivered and are legal, valid and
binding obligations of Borrower, and to the extent a party thereto, the General
Partner, enforceable in accordance with their respective terms, except as such
similar laws of general application relating to the enforcement of creditors'
rights~
5. Except as disclosed in Exhibit H to the Loan Agreements, to my
knowledge, there are no actions, suits, proceedings or claim~ against any
Related Person or the General Partner of any of their respective properties
pending or 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 the ability of Borrower to perform its obligations under
any of the Principal Documents. To my knowledge, there exists no default or
breach by any Related Person 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 any of the Principal Documents result in
any such default or breach.
6. No Related Person is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
7. No Related person is a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of the
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
8. To the best of my knowledge, the General Partner is the sole general
partner of Borrower.
9. No state or local mortgage tax, stamp tax or other fee, tax or
governmental charge (other than filing and recording fees imposed by law) is
required to be paid in the State of Colorado in connection with the execution,
delivery, filing or recording of the Mortgages or the Financing Statements.
10. With respect to the law of the State of Colorado, the Security
Agreement creates a valid security interest in favor of Agent for the benefit of
the Lenders in the Collateral described therein consisting of fixtures, goods,
including equipment and inventory, and the other personal property collateral
governed by the UCC (as defined below), securing the Obligations. The filing of
the Financing Statements in the offices identified in Schedule I hereto and to
the Local Counsel Opinions will perfect such security interest in such fixtures
and personal property granted in the Security Agreement to the extent that the
security interest can be perfected by filing. It is not necessary to refile the
Financing Statements or to make any other recording or filing in order to
maintain the perfection of the security interest described above, except as
provided below.
Comments, Qualifications and Limitations:
-----------------------------------------
The opinions expressed herein are limited by and subject to the following
qualifications, limitations and assumptions:
A. General Qualifications. The validity, binding effect and
----------------------
enforceability of the Principal Documents may be subject to, or limited or
affected by, (i) bankruptcy, or similar statutes or rules of law affecting
creditors' rights generally, including, without limitation, statutes or rules of
law that limit the effect of waivers of rights by a debtor, guarantor or
grantor; (ii)
5-
general principles of equity (whether considered in a suit in equity or at law);
and (iii) the qualification that certain remedial provisions of the Principal
Documents may be unenforceable in whole or in part under the UCC or other
applicable state and federal law, but the inclusion of such provisions does not
render the other provisions of the Principal Documents invalid and does not make
the remedies afforded by the Principal Documents inadequate for the practical
realization of the benefits afforded thereby.
B. Title Matters. In rendering this opinion, I have made no
--------------
examination of and express no opinion with respect to (i) title to the
Collateral or the priority of the liens created by the Mortgages; or (ii) the
creation or perfection of the lien of the Mortgages with respect to water
rights. I have assumed that Borrower has rights in the Personal Property
Collateral sufficient to enable Borrower to grant liens on and security
interests in such property.
C. Foreclosure. Notwithstanding the terms and provisions of the
-----------
Mortgages relating to the foreclosure, in order to realize upon the Collateral,
the foreclosure provisions of the statutes of the State where the Mortgaged
Property is located must be complied with.
D. Certain Matters as to Personal Property Collateral. I have made the
---------------------------------------------------
following additional assumptions and qualifications in rendering the opinions
expressed in paragraph 6 above:
(i) The security interests created by the Mortgages are subject to the
rights of purchasers under Section 9-307 of the UCC.
E. After-Acquired Property.' Under applicable law, after-acquired
-----------------------
title provisions in a deed of trust or mortgage may be effective against the
parties thereto but not against third parties, because the deed of trust or
mortgage may be outside the chain of title to the after-acquired property.
F. Proceeds. With respect to proceeds (as such term is defined in
---------
the UCC) of Collateral, the effectiveness and perfection of security interests
that are purported to be created by the Mortgages are subject to and limited or
affected by the following: (i) the operation of Section 9-306 of the UCC and
the other provisions of the UCC referred to therein, and (ii) as to any proceeds
which consist of items of property not subject to perfection under the
provisions of Article 9 of the UCC, to the requirement that Agent's interest be
perfected in the appropriate manner under the laws governing perfection of liens
or security interests for that type of property.
s-
G. Factual Matters. As to certain factual matters we have relied,
----------------
without independent verification, upon information obtained from officers of the
general partner of Borrower.
H. Under applicable law, a financing statement filed in the State
of Colorado is effective for a period of five years from the date of filing (and
for an additional period in certain limited circumstances). The effectiveness of
a filed financing statement may be continued however, by filing a continuation
statement, in the manner prescribed by law, in the office in which the financing
statement was originally filed, within six months prior to the end of the five-
year period thereafter. Amendments or supplements to the Financing Statements or
additional financing statements may be required to be filed in the event of a
change in the name, identity, principal place of business, chief executive
office or corporate structure of Borrower, or in the event the Financing
Statements or the description of the Collateral otherwise becomes inaccurate,
incomplete or seriously misleading.
I. Limitations. I do not express any opinion as to matters governed
------------
by any law other than the federal law and laws of the State of Colorado. The
opinions expressed herein are rendered as of the date hereof. Any statement
herein which may be construed as an opinion regarding the law of any other state
should be construed only as a referral to the appropriate Local Counsel Opinion
if one exists, and if one does not exists, should not be construed or
interpreted as any statement or opinion concerning the law or the applicability
of the law of any other state. To the extent this opinion refers to Local
Counsel opinions, the reference is for convenience only. No independent .review
or examination of the matters covered by or opined on by Local Counsel was
undertaken by the undersigned, nor did the undersigned participate in the
selection or retention of West Virginia Local Counsel. I do not undertake to
advise you of matters that may come to my attention subsequent to the date
hereof and that may affect the opinions expressed herein, including without
limitation, future changes in applicable law.
W. Spector
7
SCHEDULE I
----------
Colorado Secretary of State
G. D. HARDIN (1884.-1-degree,64)
P. H. HARDIN
BRAOLEY O. JESSON ROBERT T. DAWSON
REX M. TERRY
RCBERT M, HONEA
J. LESLIE L-"VIII'S III
J. RODNEY MILLS + KIRKMAN T. DOUGHERTY .,.. CAROL WOODS FRAZtER
EXHIBIT F-1
ATTORNEY'S AT LAW
SUITE 500, SUPERIOR FEDERAL TOWER 5000 ROOERS AVENUE
P. O. BOX 10127
FORT SMITH, ARKANSAS 7291 7-0127 TELEFHONE (501) 452-2200
FAX (501) 452-9692
December 3, 1992
*'AI..SCI AJDMII'T"ED IN CXLA~UA
Norwest Bank Denver, National
Association, Individualiv and as Agent 1740 Broadway
Denver, Colorado 80274-8699
First American National Bank
4894 Poplar Avenue
Memphis, Tennessee 38117
Barry Spector, Esq.
1050 Seventeenth Street, Suite 330
Denver, Colorado 80265
Ladies and Gentlemen:
We have been asked to render an opinion concerning certain limited matters
of Arkansas law.
Materials Examined:
-------------------
As a basis for the opinions hereinafter expressed, we have examined
unexecuted counterparts (unless otherwise noted) of the "Execution Form" of the
following:
1. Arkansas Leasehold Deed of Trust with Security
Agreement, Assignment of Rents and Leases and Financing
Statement draft, dated as of November 18, 1992, by and
among MARKWEST HYDROCARBON PARTNERS, LTD., a limited
partnership organized and existing under the laws of the State of Colorado
(hereinafter called "Grantor" or "Borrower"), Mark Williamson, as Trustee
--------- ----------
(hereinafter called "Trustee" and NORWEST BANK DENVER, NATIONAL ASSOCIATION, a
---------
national banking association, as agent (hereinafter called "Beneficiary"), for
itself and First American National Bank, a national banking association, ("First
American"), NATIONAL including Exhibits "A", "B", and "C" thereto (the
"Mortgage"). Norwest Bank Denver,
----------
December 3, 1992 Page No. 2
National Association in its individual capacity is hereinafter called "Norwest".
---------
Norwest and First American are collectively referred to herein as "Lenders".
---------
2. The financing statement for use in the State of Arkansas, naming
Borrower as debtor, and Agent as secured party (the "Financing Statement").
We have not examined any other documents in connection with this
transaction and offer no opinion as to any such documents.
The documents described in paragraphs 1 and 2 are collectively referred to
as the "Principal Documents."
Assumptions:
------------
In rendering the opinions hereinafter expressed, we have made the following
assumptions:
A. The Lenders are duly organized, validly existing and in good standing
under the laws of the states or governmental bodies under which they are
organized. Borrower is duly organized, validly existing and in good standing as
a limited partnership under the laws of the State of Colorado. If any party is
doing business in the State of Arkansas it has properly qualified to transact
such business.
B. Each of the Principal Documents has been duly authorized, executed
and delivered by the parties thereto.
C. The Principal Documents constitute legal, valid and binding
obligations of the parties thereto (other than Borrower), enforceable against
such parties (other than Borrower) in accordance with their respective terms,
and all parties to the Principal Documents have all necessary power and
authority to enter into and perform the transactions contemplated thereby.
D. None of the execution, delivery or performance of the Principal
Documents by any party thereto will result in any violation of or be in
contravention of or constitute a default under the charter, bylaws or other
governing documents of such party, or any other contract or agreement binding on
such party or its properties.
E. The transactions provided for in the Principal Documents are
supported by sufficient and adequate
December 3, 1992 Page No. 3
consideration, and a loan has been made and is currently outstanding, which loan
is intended to be secured by the Mortgage.
F. All signatures are genuine, all documents submitted ~.c us as
originals are authentic, and all documents submitted to us as photocopies,
telecopies or facsimiles conform to the original documents.
G. MarkWest is not a public utility within the meaning of Arkansas law
and is not a regulated pipeline or other entity which would require approval
from the Arkansas Public Service Commission or other state entity prior to
obtaining mortgage financing.
Opinion:
--------
Based upon the foregoing, and subject to the qualifications, limitations
and assumptions stated herein, we are of the opinion that:
1. No approval, consent, exemption or other action by, or notice to or
filing with any governmental authority of this State pursuant to any statutory
law, treaty, rule or regulation is required in connection with the (a)
execution, delivery or performance by Borrower of its agreements in any of the
Principal Documents or the incurring of indebtedness by Borrower or the granting
of the liens by Borrower under the Mortgage, or (b) enforcement by Agent or the
Lenders of any of the Principal Documents; except that either or both clauses
(a) and (b) above are or may be subject to or limited or affected by: (i) the
filings and recordings referred to in paragraphs 5 and 6 below; (ii) notices to
or filings with appropriate county recorders under applicable state law relating
to nonjudicial foreclosure; and (iii) any notices, filings or other actions
under applicable state law required in connection with (A) judicial foreclosure,
(B) realization upon any assignment of rents, or (C) the appointment of
receivers.
2. The execution, delivery and performance by Borrower of its agreements
in the Principal Documents and the incurring of indebtedness by Borrower and the
granting of the liens described in and pursuant to the Mortgage do not and will
not violate or result in a breach of any statutory law, treaty, rule or
regulation of this State applicable to Borrower.
December 3, 1992 Page No. 4
3. No state or local mortgage tax, stamp tax or other fee, tax or
governmental charge (other than filing and recording fees imposed by law) is
required to be paid in the State of Arkansas in conection with the execution,
delivery, filing or recording of the Mortgage or the Financing Statement.
4. The Mortgage constitutes the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms.
5. The Mortgage is in form sufficient to create a lien in favor of
Trustee for the benefit of Agent and Lenders in and to the real property
described in the Mortgage and in Exhibits "A" and "B" to the Mortgage (including
fixtures that are real property under Arkansas law), securing payment of such
obligations as are stated in the Mortgage, and is in proper form for recording
in the respective office or offices identified in Schedule I attached hereto.
Upon recording of the Mortgage in the office or offices identified in Schedule I
hereto, the Mortgage will constitute constructive notice of the contents thereof
to subsequent purchasers and mortgagees of the real property described therein.
No other recordings or re-recordings are or will be necessary in order to
provide any subsequent purchasers and mortgagees of any such real property with
constructive notice of the contents of the Mortgage or to maintain the
perfection of the lien created by the Mortgage, except as stated in paragraph G
below.
6. The Mortgage and Exhibits "A" and "B" thereto is in form sufficient to
create a valid security interest in favor of Agent for the benefit of Lenders in
and to the personal property described in the Mortgage and Exhibits "A" and "B"
thereto (including fixtures that are personal property under Arkansas law)
consisting of fixtures, goods and other personal property which is within the
scope of the Uniform Commercial Code as adopted in Arkansas (the "UCC"),
securing the payment of such obligations as are stated in the Mortgage. The
recording of the Mortgage and the filing of the Financing Statement in the
offices identified in Schedule I hereto will perfect such security interest in
such fixtures and personal property to the extent that such security interest
can be perfected by filing. The Principal Documents are effective as a fixture
filing from the date of their filing and/or recording in the offices identified
in Schedule I hereto. It is not necessary to rerecord the Mortgage or refile the
Financing
December 3, 1992 Page No. 5
Statement or to make any other recording or filing in order to maintain the
perfection of the security interest described above, except as provided in
paragraphs "D", "E", "F," and "G" below.
Comments, Oualifications and Limitations:
-----------------------------------------
The opinions expressed herein are limited by and subject to the following
qualifications, limitations and assumptions:
A. General Qualifications. The validity, binding effect and
-----------------------
enforceability of the Principal Documents may be subject to, or limited or
affected by, (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar statutes or rules of law affecting creditors' rights
generally, including, without limitation, statutes or rules of law that limit
the effect of waivers of rights by a debtor, guarantor or grantor; (ii) general
principles of equity (whether considered in a suit in equity or at law); and
(iii) the qualification that certain remedial provisions of the Principal
Documents may be unenforceable in whole or in part under the UCC or other
applicable state and federal law, but the inclusion of such provisions does not
render the other provisions of the Principal Documents invalid; (iv) the
validity and enforcement of the Principal Documents is subject to the terms of
the underlying ground leases; and (v) the rights of the secured parties may be
further subject to the Arkansas Code provisions with regard to landlord's liens,
Arkansas Code Annotated, Sec. 18-16-108. The ramifications of this statute are
more particularly discussed in a letter dated June 18, 1992, from Rex M. Terry
to Barry W. Spector which by this reference is incorporated herein.
B. Title Matters. In rendering this opinion we have made no examination
--------------
of and express no opinion with respect to (i) title to the property conveyed in
the Mortgage or the priority of the liens created by the Mortgage; or (ii) the
creation or perfection of the lien of the Mortgage with respect to water rights.
We have assumed that Borrower has rights in the personal property conveyed in
the Mortgage sufficient to enable Borrower to grant liens on and security
interests in such property.
C. Foreclosure. Notwithstanding the terms and provisions of the
------------
Mortgage relating to foreclosure, in order to realize upon the property conveyed
therein as
December 3, 1992 Page No. 6
collateral, the foreclosure provisions of the statutes and case law of this
State must be complied with. In our opinion, as a practical matter, in Arkansas,
judicial foreclosure is required as to the interest in real estate in order to
establish marketable title in the event of default despite the terms of the
Mortgage providing for non-judicial sale.
D. Certain Matters as to Personal Property Collateral. We have made the
---------------------------------------------------
following additional assumptions and qualifications in rendering the opinions
expressed in paragraph 6 above.
(i) Our opinion as to perfection of the security interest
with respect to the fixtures (as that term is used in the UCC), is
based upon the following assumptions:
(a) Any portion of the property conveyed in the Mortgage
consisting of goods that are or are to become fixtures is and will be
located on the real estate described in Exhibit "A" to the Mortgage;
and
(b) Borrower has an interest of record in the real property
described in the Mortgage sufficient to support a security interest in
fixtures attached to or placed upon such property.
(ii) Our opinion as to perfection of the security
interests with respect to the personal property included in the
Mortgage is limited to those items that constitute goods under the UCC
and proceeds thereof; but excluding consumer goods, standing timber,
goods covered by a certificate of title or warehouse receipt, goods in
the possession of a bailee, farm products and crops.
(iii) The security interests created by the Mortgage
are subject to the rights of the purchasers under Section 9-307 of
the UCC.
E. After-Acquired Property. Under applicable law, after-acquired
------------------------
title provisions contatined in the Principal Documents may be effective
against the parties thereto but not against third parties, because the
Principal Documents may be outside the chain of title to the after-acquired
property.
December 3, 1992 Page No. 7
F. Proceeds. With respect to proceeds (as such term is defined 'in the
---------
UCC) of property conveyed in the Mortgage, the effectiveness and perfection of
security interests that are purported to be created by the Mortgage are subject
to and limited or affected by the following: (i) the operation of Section 9-306
of the UCC and the other provisions of the UCC referred to therein, and (ii) as
to any proceeds which consist of items of property not subject to perfection
under the provisions of Article 9 of the UCC, to the requirement that Agent's
interest be perfected in the appropriate manner under the laws governing
perfection of liens or security interests for that type of property.
G. Continuation of Lien and Secured Interest. Under Arkansas law, a
------------------------------------------
mortgage, deed of trust or similar document may not be enforceable with respect
to real property collateral and the record thereof may cease to provide
constructive notice and has no more effect than an unrecorded instrument
immediately upon expiration of a period of five years next following the date
upon which acceleration of the indebtedness and payment of the indebtedness in
full may have first been permitted or demanded pursuant to the Principal
Documents and the indebtedness such documents secure.
Under Arkansas law, a financing statement filed in the State of Arkansas is
effective for a period of five years from the date of filing (and for an
additional period in certain limited circumstances). The effectiveness of a
filed financing statement may be continued, however, by filing a continuation
statement, in the manner prescribed by law, in the offices in which the
financing statement was originally filed, within six months prior to the end of
the five-year period, and by so filing subsequent continuation statements within
six months prior to the end of each five-year period thereafter. Amendments or
supplements to the Mortgage and the Financing Statement or additional financing
statements may be required to be filed in the event of a change in the name,
identity, principal place of business, chief executive office or corporate
structure of Borrower, or in the event the Mortgage or the Financing Statement
or the description of the Collateral otherwise becomes inaccurate, incomplete or
seriously misleading.
I. Filing Offices. For the purposes of determining the proper counties
---------------
or offices to record the Mortgage, we have relied upon the descriptions in
Exhibit
December 3, 1992 Page No. 8
"A" to the Mortgage for information concerning the counties in which the
property conveyed in the Mortgage is located.
J. Limitations. We do not express any opinion as to matters governed
------------
by any law other than the laws of the State of Arkansas. The opinions expressed
heroin are rendered as of the date hereof. We do not undertake to advise you of
matters that may come to our attention subsequent to the date hereof and that
may affect the opinions expressed herein, including without limitation, future
changes in applicable law.
K. Usury. No opinion is given with regard as to whether this
------
transaction complies with the Arkansas usury limitations.
L. Due on Sale. The Due on Sale provisions of Section 2j'8 of the
------------
Mortgage may be subject to the Arkansas case law provisions which require that
the mortgage holder have a valid reason not to permit a transfer. See,
Tucker vs. Pulaski Savings and Loan Association, ~1 S.W.2d 725 (1972) and Abrego
----------------------------------------------- ------
v. United PooDles Federal
-------------------------
Savings and Loan Association, 664 S.W.2d 858 (1~84).
----------------------------
Very truly yours,
HARDIN, JESSON, DAWSON & TERRY
/s/ Robert M. Honea
Robert M. Honea
SCHEDULE I
----------
A. Real Property.
--------------
To perfect a lien on real property in the State of Arkansas, the instrument
evidencing the lien must be filed in the land records of the Circuit Clerk and
Ex-Officio Recorder for the county in Arkansas in which the real property is
located. For Crittenden County, that address is:
Land Records
Circuit Clerk and Ex-Officio Recorder
Crittenden County Courthouse
100 Court Street
Marion, Arkansas 72364
B. UCC Filings
-----------
In order to perfect a security interest in personal property and fixtures
pursuant to the Uniform Commercial Code, as adopted in the State of Arkansas,
the instrument evidencing the lien must be filed in both the UCC Records of the
Circuit Clerk and Ex-Officio Recorder for the county in Arkansas in which the
personal property and/or fixtures are located, and in addition, must be filed in
the UCC records maintained by the Office of the Secretary of State for the State
of Arkansas. Those addresses are as follows:
UCC Records
Circuit Clerk and Ex-Officio Recorder
Grittendon County Courthouse
100 Court Street
Marion, Arkansas 72364
and
UCC Filings Division
Office of the Secretary of State
State of Arkansas
256 State Capitol Building
Little Rock, Arkansas 72201
BAR-~Y SPECTOR, ESQ.
LADIES & GENTLEMEN:
WE HAVE ACTED AS SPECIAL KENTUCKY COUNSEL FOR MARKWEST HYDROCARBON
PARTNERS, LTD., A COLORADO LIMITED PARTNERSHIP ("BORROWER"), IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED BY THE LOAN AGREEMENT DATED AS OF NOVEMBER 20,
1992 (THE "REVOLVER/TERM LOAN AGREEMENT") AND THE WORKING CAPITAL LOAN AGREEMENT
DATED AS OF NOVEMBER 20, 1992 (THE "WORKING CAPITAL LOAN AGREEMENT"), BOTH AMONG
BORROWER, NORWEST BANK DENVER, NATIONAL ASSOCIATION AND FIRST AMERICAN NATIONAL
BANK (COLLECTIVELY THE "LENDERS") AND NORWEST BANK DENVER, NATIONAL ASSOCIATION,
AS AGENT FOR THE LENDERS ("AGENT"). THE REVOLVER/TEN LOAN AGREEMENT AND THE
WORKING CAPITAL LOAN AGREEMENT ARE REFERRED TO HEREIN COLLECTIVELY AS THE "LOAN
AGREEMENTS".
WE RENDER THIS OPINION PURSUANT TO SUBSECTION 3(A)(II)(B) OF THE
REVOLVER/TEN LOAN AGREEMENT AND SUBSECTION 4(A)(II)(B) 'OF THE WORKING CAPITAL
LOAN AGREEMENT. CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE
MEANINGS SET FROTH IN THE REVOLVER/TERM LOAN AGREEMENT, EXCEPT THAT THE TEN
"COLLATERAL" SHALL HAVE THE MEANING SET FORTH IN THE MORTGAGE (AS SUCH TEN IS
DEFINED BELOW).
Nor-west Bank Denver, National McBRAYER, McGINNIS, LESLIE KIRKLAND
Association, Individually an as Agent
November 20, 1992 -Page 2
Materials Examined:
-------------------
As a basis for the opinions hereinafter expressed, we have examined
unexecuted counterparts (unless otherwise noted) of the "Execution Form" of the
following:
1. (a) The Mortgage, Security Agreement, Assignment of Profits and
Proceeds and Financing Statement, dated as of November 20, 1992 by and among
Borrower, as Mortgagor, and Agent, as Mortgagee, including the Exhibits thereto
(Siloam); (b) The Mortgage, Security Agreement, Assignment of Profits and
Proceeds and Financing Statement, dated as of November 20, 1992 by and among the
Borrower, as Mortgagor, and Agent, as Mortgagee, including the Exhibits thereto
(Boldman). ((a) and (b) are collectively called the "Mortgage").
2. The financing statement for use in the State of Kentucky naming Borrower
as debtor, and Agent as secured party (the "Financing Statement").
The documents described in paragraphs 1 and 2 are collectively referred to
as the "Principal Documents".
Assumptions:
------------
In rendering the opinions heroinafter expressed, we have made the following
assumptions:
A. The Lenders are duly organized, validly existing and in good standing
under the laws of the states or governmental bodies under which they are
organized. Borrower is duly organized, validly existing and in good standing as
a limited partnership under the laws of the State of Colorado.
B. Each of the Principal Documents has been duly authorized, executed
and delivered by the parties thereto.
C. The Principal Documents constitute legal, valid and binding obligations
of the parties thereto (other than Borrower), enforceable against such parties
(other than Borrower) in accordance with their respective terms; and all
parties to the Principal Documents have all necessary power and authority to
enter into and perform the transactions contemplated thereby.
D. None of the execution, delivery or performance of the Principal
Documents by any party thereto will result in any violation of or be in
contravention of or constitute a default under the charter, bylaws or other
governing documents of such party, or any other contract or agreement binding on
such party or its properties.
Norwest Bank Denver, National McBRAYER, McGINNIS, LESLIE & KIRKLAND
Association, Individually an as Agent November 20, 1992 Page 3
E. The transactions provided for in the Principal Documents are supported
by sufficient and adequate consideration, and a loan has been made and is
currently outstanding, which loan is intended to be secured by the Mortgage.
F. All signatures are genuine, all documents submitted to us as originals
are authentic, and all documents submitted to us as photocopies, telecopies or
facsimiles conform to the original documents.
Opinion:
--------
Based upon the foregoing, and subject to the qualifications, limitations
and assumptions stated heroin, we are of the opinion that:
1. No approval, consent, exemption or other action by, or notice to or
filing with any governmental authority of this State pursuant to any statutory
law, treaty, rule or regulation is required in connection with the execution,
delivery or performance of Borrower of its agreements in any of the Principal
Documents or in the incurring of indebtedness by Borrower or the granting of the
liens by Borrower under the Mortgage.
2. The execution, delivery and performance by Borrower of its agreements in
the Principal Documents and the incurring of indebtedness by Borrower and the
granting of the liens described in and pursuant to the Mortgage do not and will
not violate or result in a breach of any statutory law, treaty, rule or
regulation of this State ("Requirement of Law") applicable to Borrower nor
result in or require the creation or imposition of any lien on any properties or
revenues of Borrower pursuant to any Requirement of Law.
3. No state or local mortgage tax, stamp tax or other fee, tax or
governmental charge (other than filing and recording fees imposed by law) is
required to be paid in the State of Kentucky in connection with the execution,
delivery, filing or recording of the Mortgage or the Financing Statement.
4. The Mortgage constitutes the legal, valid and binding obligation of
Borrower, enforceable against Borrower in according with its terms.
5. The Mortgage, including the form of description contained in Exhibit A
and B thereto, are in form sufficient to create a lien in favor of Agent for the
benefit of Agent and the Lenders on the title and interest of Borrower in the
real property (including improvements located thereon and fixtures thereto)
described in Exhibit A and B thereto, securing payment and performance of the
Obligations (as defined therein), and is in proper form for recording in the
Norwest Bank Denver, National McBRAYER, McGINNIS, LESLIE & KIRKLAND
Association, Individually an as Agent November 20, 1992 Page 4
respective office' or offices identified for the Mortgage in Schedule I. Upon
such recording, the Mortgage will constitute constructive notice of the contents
thereof to subsequent purchasers and mortgagees of the real property described
therein. No other recordings or re-recordings are or will be necessary in order
to provide any subsequent purchasers and mortgagees of any such real property
with constructive notice of the contents of the Mortgage or to maintain the
perfection of the lien described above.
6. The Mortgage is in form sufficient to create a valid security interest
in favor of Agent for the benefit of the Lenders in the Collateral described
therein consisting of fixtures, goods and the other personal property collateral
governed by the UCC (as defined below), securing the Obligations. The recording
of the Mortgage and the filing of the Financing Statement in the offices
identified in Schedule I hereto will perfect such security interest in such
fixtures and personal property granted in the Mortgage to the extent that the
security interest can be perfected by filing. The Mortgage is, among other
things, a financing statement and is effective as a fixture filing from the date
of its recording in the offices identified in Schedule I hereto. It is not
necessary to re-record the Mortgage or refile the Financing Statement or to make
any other recording or filing in order to maintain the perfection of the
security interest described above, except as provided below.
Comments, Qualifications & Limitations:
---------------------------------------
The opinions expressed heroin are limited by and subject to the following
qualifications, limitations and assumptions:
A. General Qualifications. The validity, binding effect and
-----------------------
enforceability of the Principal Documents may be subject to, or limited or
affected by, (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar statutes or rules of law affecting creditors' rights
generally, including, without limitation, statutes or rules of law that limit
the effect of waivers of rights by a debtor, guarantor cr grantor; (ii) general
principles of equity (whether considered in a suit in equity or at law); and
(iii) the qualification that certain remedial provisions of the Principal
Documents may be unenforceable in whole or in part under the UCC or other
applicable state and federal law, but the inclusion of such provisions does not
render the other provisions of the Principal Documents invalid and does not make
the remedies afforded by the Principal Documents inadequate for the practical
realization of the benefits afforded thereby.
B. Tiitle Matters. In rendering this opinion we have made no examination of
---------------
and express no opinion with respect to (i) title to the Collateral or the
priority of the liens created by
Norwest Bank Denver, National McBRAYER, McGINNIS, LESLIE & KIRKLAND
Association, Individually an as Agent November 20, 1992 Page 5
the Mortgage; or (it) the creation or perfection of the lien of the Mortgage
with respect to water rights. We have assumed that Borrower has rights in the
personal property Collateral sufficient to enable Borrower to grant liens on and
security interests in such property.
C. Foreclosure. Notwithstanding the terms and provisions of the Mortgage
------------
relating to foreclosure, in order to realize upon the Collateral, the
foreclosure provisions of the statutes of this State must be complied with.
D. Certain Matters as to Personal Property Collateral. We have made the
---------------------------------------------------
following additional assumptions and qualifications in rendering
the opinions expressed in paragraph 6 above:
(i) Our opinion as to perfection of the security interest with
respect to the fixtures (as that term is used in the UCC), is based upon the
following assumptions:
(a) Any portion of the Collateral consisting of goods that are
or are to become fixtures is and will be located on the real estate described in
Exhibit A to the Mortgage; and,
(b) Borrower has an interest of record in the real estate
described in the Mortgage, or, as to Boldman, that Columbia Gas Transmission
Corporation is the owner of an interest of record in the real estate concerned.
(ii) Our opinion as to perfection of the security interests with
respect to the personal property included in the Collateral is limited to those
items of Collateral that constitute goods under the UCC and proceeds thereof;
but excluding consumer goods, standing timber( goods covered by a certificate of
title or warehouse receipt, goods in possession of a bailee, fan products and
crops.
(iii) The security interests created by the Mortgage are subject to
the rights of purchasers under Section 9-307 of the UCC.
E. After-Acquired Property. Under applicable law, after-acquired title
------------------------
provisions in a deed of trust or mortgage may be effective against the parties
thereto but not against third parties, because the deed of trust or mortgage may
be outside the chain of title to the after-acquired property.
F. Proceeds. With respect to proceeds (as such term is defined in the UCC)
---------
of Collateral, the effectiveness and perfection of security interests that are
purported to be created by the Mortgage are subject to and limited or affected
by the following: (i) the operation of Section 9-306 of the UCC and other
provisions of the UCC referred to therein, and (it) as to
Norwest Bank Denver, National MCBRAYER, McGINNIS, LESLIE & KIRKLAND
Association, Individually an as Agent November 20, 1992 Page 6
any proceeds which consist of items of property not subject to perfection under
the provisions of Article 9 of the UCC, to the requirement that Agent's interest
be perfected in the appropriate manner under the laws governing perfection of
liens or security interests for that type of property.
G. Factual Matters. As to certain factual matters we have relied, without
----------------
independent verification, upon information contained in certificates of an offer
of Borrower.
H. Continuation of Lien & Security Interest. Under applicable law, a
-----------------------------------------
financing statement filed in the State of Kentucky is effective for a period of
five years from the date of filing (and for an additional period in certain
limited circumstances). The effectiveness of a filed financing statement may be
continued however, by filing a continuation statement, in the manner prescribed
by law, in the office in which the financing statement was originally filed,
within six months prior to the end of the five-year period, and by so filing
subsequent continuation statements within six months prior to the end of each
five-year period thereafter. Amendments or supplements to the Mortgage and the
Financing Statement or additional financing statements may be required to be
filed in the event of change in the name, identity, principal place of business,
chief executive office or corporate structure of Borrower, or in the event the
Mortgage or the Financing Statement or the description of the Collateral
otherwise becomes inaccurate, incomplete or seriously misleading.
I. Filing Offices. For purposes of determining the proper counties or
---------------
offices to record the Mortgage, we have relied upon the descriptions in Exhibit
A to the Mortgage for information concerning the counties in which the Mortgaged
Property is located.
J. Limitations. We do not express any opinion as to matters governed by any
------------
law other than the laws of the State of Kentucky. The opinions expressed herein
are rendered as of the date hereof. We do not undertake to advise you of matters
that my come to our attention subsequent to the date hereof and that may affect
the opinions expressed herein, including without limitation, future changes in
applicable law.
Sincerely yours,
Phillip Bruce Leslie
EXHIBIT G
---------
THIS EXHIBIT INTENTIONALLY OMITTED
G-1
.
EXHIBIT H
LITIGATION
----------
1. In Re the Columbia Gas System, Inc. and Columbia Gas Transmission
-----------------------------------------------------------------
Corporation, Case Nos. 91-803 and 91-804, United States Bankruptcy Court,
------------
District of Delaware.
EXHIBIT I
---------
MARKWEST HYDROCARBON PARTNERS LTD. PARTNERSHIP INTEREST PERCENTAGES
GENERAL PARTNER
MarkWest Hydrocarbon inc.
TOTAL
LIMITED PARTNERS
ERIN Investments
Jon Crabtree
Majorie S. Fox
Lisbeth Fox Vance
James Hamilton
The Murray Company
Tom Reed
Brian O'Neill
Patrick Murray
Arthur Denney
William Adkins
Patricia Cameron
Steve Creamer
Daniel Deneault
Katherine Holland
Henry Nickel
Paul O'Neill
Mark Porth
Mike Price
Fred Shato
Eldon Smith
Kevin Timken
Total Limited Partners
GRAND TOTAL
69.7176% 69.7176%
10.9915% 4.7107% 1.6170% 1.0000% 0.0000% 2.6170% 0.9421% 4.4939% 1.7193%
0.8909% 0.0957% 0.0787% 0.1702% 0.1277% 0.0617% 0.0255% 0.1277% 0.0766% 0.
1702% 0.1277% 0.1277% 0.1106% 30.2824%
100.0000%
. ~ I - 1
GENERAL PARTNER' S SHAREHOLDERS MARKWEST HYDROCARBON, INC.
Percentage Ownership
---------
John M. and Marcella F. Fox
Anne Fox Mounsey
Kelley Fox
John M. Fox, Jr.
85.00% 5.00% 5.00% 5.00%
Address of above:
3482 E. Davies Place Littleton, Colorado
80122
.z!~ I-2
FIRST AMENDMENT TO LOAN AGREEMENT
---------------------------------
This First Amendment to Loan Agreement (this "Amendment") dated as of
September 14, 1993 is by and among MARKWEST HYDROCARBON PARTNERS, LTD., a
Colorado limited partnership (the "Borrower"), NORWEST BANK DENVER, NATIONAL
ASSOCIATION, a national banking association, ("Norwest"), FIRST AMERICAN
NATIONAL BANK, a national banking association ("First American") (Norwest and
--------
First American are referred to individually as a "Lender" and collectively as
---------
the "Lenders"), and NORWEST, AS AGENT FOR THE LENDERS (in such capacity, the
------------
"Agent").
---------
RECITALS
--------
1. Borrower, the Lenders and the Agent executed a Loan Agreement
dated as of November 20, 1992 (the "Loan Agreement"), whereby the Lenders agreed
to make Revolver Loans and a Term Loan to Borrower in accordance with the terms
and conditions set forth therein. The principal of and interest on the Term Loan
have been paid in full. Unless otherwise defined herein, capitalized terms used
herein shall have the meaning assigned to them in the Loan Agreement.
2. Borrower, the Agent and the Lenders now desire to amend the Loan
Agreement to provide, among other things, for an increase in the principal
amount of the Revolver Loan from $20,000,000 to $25,000,000 and to add
additional collateral to secure the Loans.
AGREEMENT
---------
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Borrower, the Agent and each of the
Lenders hereby agree as follows.:
1. Amendment of Section 1. The definitions of Borrowing Base,
------------------------
Mortgages, Revolver Commitment and Revolver Note set forth in section 1 of the
Loan Agreement shall be amended in the following manner:
"Borrowing Base": shall be amended by deleting the figure
------------------
"$20,000,000" in the last line of that definition and substituting the phrase
"'the Maximum Principal Amount" therefor;
"Mortgages": shall be amended by changing the period at the end of the
-----------
present definition to a comma and adding to the end thereof the following: "and
(f) Borrower's interest in the Florida Mesa Project and the Herford Project."
"Revolver Commitment": shall be amended by deleting the figure
-----------------------
"$20,000,000" in the fourth line of that definition and substituting the phrase
"the Maximum Principal Amount" therefor; and
"Revolver Note": shall be amended by restating the definition of the
-----------------
term "Revolver Note" in its entirety to read as follows:
"Revolver Note" shall mean a note dated November 20, 1992,
---------------
substantially in the form of Exhibit B attached hereto, made by
Borrower and payable to the order of Norwest or to First American, as
appropriate, with appropriate insertions, as amended by an Allonge
dated September 14, 1993, to increase the principal amount of such
note to $12,500,000.00, together with any and all renewals,
extensions, amendments and changes of, or substitutions for said note;
collectively, the "Revolver Notes."
-----------------
B. The following additional definitions are hereby added to Section
1 of the Loan Agreement in their appropriate alphabetical order:
"Allonge" shall refer individually to each Allonge dated September 14,
----------
1993, between Borrower and either Norwest or First American, as appropriate,
which amends the Revolver Note payable to such Lender to increase the principal
amount of such note from $10,000,000 to $12,500,000, and which are in the form
attached hereto as Exhibits A-1 and A-2, and the term "Allonges" shall refer to
both Allonges.
"Amended Notes" shall refer to each Revolver Note as amended by the
---------------
Allonge for the appropriate Lender.
"Amendment Documents" shall refer to this Amendment, the Allonges, the
-----------
First Mortgage Amendments and the Florida Mesa Mortgage.
"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
Borrower in
-2-
connection with the Initial Advance and the Second Advance on the Term Loan 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.
"Florida Mesa Deed of Trust" shall refer to the Deed of Trust to
-----------------------------
Public Trustee, Mortgage, Security Agreement, Assignment of Production and
Proceeds and Financing Statement dated as of September 14, 1993 from Borrower to
the Public Trustee of La Plata County, Colorado, for the benefit of the Agent,
covering Borrower's interest in the Florida Mesa Project and its interest in the
Herford Project.
"Maximum Principal Amount" shall be $25,000,000.
---------------------------
2. Amendment of Section 4(c). Section 4(c) is hereby amended to
---------------------------
delete the figure "$20,000,000" in the third line and substitute the phrase "the
Maximum Principal Amount" therefor.
3. Amendment of Section 9(c). Section 9(c) is hereby amended to
---------------------------
delete the following language:
(i) guarantees by Borrower of Debt incurred by MarkWest Energy
Partners, Ltd. in connection with the Florida Mesa Project so
long as such guarantees do not exceed $1,000,000 in the aggregate
at any one time, and (ii)
4. Amendment of Section 13(b). Section 13(b) shall be amended by
----------------------------
changing the address of Norwest in both the provision for Norwest, as Lender,
and Norwest, as Agent:
Norwest Bank Denver, National Association
1740 Broadway
Denver, CO 80274-8699
Attention: Energy and Minerals Group
Fax No.: (303) 863-5196
-3-
5. Conditions Precedent. The amendments provided for in this
----------------------
Amendment shall not become effective until the Agent has received each of the
following:
A. This Amendment, executed by Borrower, the Agent and the
Lenders;
B. The Allonges, executed by Borrower and the appropriate
Lender;
C. Counterparts of the First Mortgage Amendments, duly
executed and acknowledged by Borrower and Agent, and to the extent applicable,
the trustee thereunder;
D. Counterparts of the Florida Mesa Deed of Trust duly
executed and acknowledged by Borrower;
E. A letter from each of John Fox and the General Partner
reconfirming their respective Covenant Agreement;
F. A duly executed and acknowledged Subordination Agreement
between RIMCO Partners, L.P., Resource Investors Management Company Limited
Partnership and the Agent, in form and substance acceptable to the Agent;
G. Results of UCC lien searches as to Borrower for the States
of Arkansas, Colorado and West Virginia and for the following counties:
Crittenden County, Arkansas; Boyd, Greenup and Pike Counties, Kentucky; and
Wayne and Kanawha Counties, West Virginia, and for all other relevant filing
jurisdictions as to the Collateral;
H. Evidence that the 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 8(f) of the
Loan Agreement with respect to the collateral subject to the Florida Mesa Deed
of Trust;
I. All legal matters incident to the Loans and the Amendment
Documents shall be satisfactory to counsel to the Agent, and the Agent shall
have received a favorable opinion addressed to the Agent and the Lenders of
Barry W. Spector, Esq., counsel for Borrowers, in form and substance
satisfactory to the Agent; and
J. All other documents and assurances which the Agent
reasonably requires or which it may reasonably request in connection with the
transactions contemplated by
-4-
this Agreement, and such documents shall be certified, when appropriate by
proper authorities.
6. Post-Closing Matters. On or before thirty (30) days after the
----------------------
recording of the Florida Mesa Deed of Trust in the real property records of La
Plata County, Colorado, Borrower shall have delivered to the Agent a security
opinion prepared by Barry W. Spector, Esq., showing the Florida Mesa Deed of
Trust as a perfected first priority lien and security interest in all of the
collateral subject to such Deed of Trust, subject only to those matters
acceptable to the Agent and its counsel.
7. Representations and Warranties. To induce the Agent and the
--------------------------------
Lenders to enter into this Amendment, Borrower hereby represents and warrants to
the Agent and each Lender that:
A. Non-Contravention. The execution, delivery and performance
-------------------
by the Borrower of this Amendment, and the other Amendment Documents and the
borrowings thereunder, 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, 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 is a party or
is subject or by which any Related Person 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.
B. 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 in connection with the execution, delivery or performance by
Borrower of this Amendment, or any other Amendment Document or to consummate any
transactions contemplated hereby or thereby.
C. Authorization; Binding Effect. Borrower has full power and
-------------------------------
authority to enter into this Amendment and the other Amendment Documents. The
execution and delivery of this Amendment, and the other Amendment Documents, and
the performance and observance of their terms, conditions and obligations, have
been duly authorized by all necessary action by Borrower and the General
Partner. This Amendment and the other Amendment Documents are the legal, valid
and binding obligations of Borrower, enforceable in accordance with their
-5-
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.
D. First Priority Security Interest. Upon filing and
----------------------------------
recording of the Florida Mesa Deed of Trust and the related financing statements
in the locations specified in the opinion provided to the Lenders pursuant to
paragraph 5(I) hereof, the Agent, on behalf of the Lenders will have a perfected
first priority lien or security interest in all of the Collateral subject to
such mortgage.
The foregoing representations and warranties shall be deemed to
be representations and warranties made in the Loan Agreement for all purposes.
8. Continuing Effect. Except as expressly amended hereby, the Loan
-------------------
Agreement shall continue to be and shall remain in full force and effect in
accordance with its terms. References in the Loan Agreement to "this Agreement",
"this instrument" and like terms shall be deemed to be references to the Loan
Agreement as amended by this Amendment. When used in this Amendment or in the
Loan Agreement, each reference to a term defined in the Loan Agreement, which is
amended by this Amendment, shall be deemed to be the term as amended by this
Amendment. Any reference to the "Revolver/Term Loan Agreement" in the Collateral
Documents shall be deemed to be a reference to the Loan Agreement as amended by
this Amendment. The Borrower hereby confirms and acknowledges that the term
"Obligations" as used in the Security Agreement, includes all obligations of the
Borrower with respect to the Revolver Loans as increased hereby and the Amended
Notes and all other costs, fees, indemnities and expenses in connection
therewith.
9. This Amendment shall be governed by and construed under the laws
of the State of Colorado and shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
10. This Amendment may be executed in one or more counterparts, with
each party signing on different counterparts, each of which shall be deemed an
original, and all of which together shall constitute but one and the same
instrument.
-6-
BORROWER:
MARKWEST HYDROCARBON PARTNERS, LTD.,
a Colorado limited partnership
By: MARKWEST HYDROCARBON, INC.,
General Partner
By:
Patrick W. Murray
Vice President
LENDERS:
NORWEST BANK DENVER, NATIONAL
ASSOCIATION, a national banking association
By:
Mark Williamson
Vice President
FIRST AMERICAN NATIONAL BANK,
a national banking association
By:
David C. May
Senior Vice President
AGENT:
NORWEST BANK DENVER, NATIONAL
ASSOCIATION, a national banking association
By:
Mark Williamson
Vice President
-7-
EXHIBIT A-1
-----------
FIRST ALLONGE
TO REVOLVER NOTE
THIS FIRST ALLONGE TO REVOLVER NOTE dated September 14, 1993, is
between MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership
("Borrower"), and NORWEST BANK DENVER, NATIONAL ASSOCIATION, a national banking
association (the "Lender").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and the Lender agree as follows:
1. This Allonge shall be attached to and shall become a part of the
Revolver Note dated November 20, 1992, made by Borrower and payable to the order
of the Lender, in the original principal amount of $10,000,000.00 (the "Note").
2. The Note is hereby amended by increasing the principal amount of
the Note from $10,000,000.00 to $12,500,000.00.
3. Except as amended hereby, the provisions of the Note are not
changed, altered or amended, and such provisions and the liens of the deeds of
trust and mortgages that secure the obligations under the Note are hereby
ratified and confirmed in all respects and remain in full force and effect.
4. This Allonge shall be binding upon and shall inure to the benefit
of the parties hereto and their heirs, administrators, executors, personal
representatives, successors and assigns.
EXECUTED as of the date first set forth above.
NORWEST BANK DENVER, MARKWEST HYDROCARBON PARTNERS
NATIONAL ASSOCIATION, LTD., a Colorado limited
a national banking association partnership
By: MarkWest Hydrocarbon, Inc., General
Partner
By:
Mark Williamson, Patrick W. Murray,
Vice President Vice President
EXHIBIT A-2
-----------
FIRST ALLONGE
TO REVOLVER NOTE
THIS FIRST ALLONGE TO REVOLVER NOTE dated September 14, 1993, is
between MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership
("Borrower"), and FIRST AMERICAN NATIONAL BANK, a national banking association
(the "Lender").
For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower and the Lender agree as follows:
1. This Allonge shall be attached to and shall become a part
of the Revolver Note dated November 20, 1992, made by Borrower and payable
to the order of the Lender, in the original principal amount of
$10,000,000.00 (the "Note").
2. The Note is hereby amended by increasing the principal
amount of the Note from $10,000,000.00 to $12,500,000.00.
3. Except as amended hereby, the provisions of the Note are
not changed, altered or amended, and such provisions and the liens of the
deeds of trust and mortgages that secure the obligations under the Note are
hereby ratified and confirmed in all respects and remain in full force and
effect.
4. This Allonge shall be binding upon and shall inure to the
benefit of the parties hereto and their heirs, administrators, executors,
personal representatives, successors and assigns.
EXECUTED as of the date first set forth above.
FIRST AMERICAN NATIONAL MARKWEST HYDROCARBON PARTNERS
BANK, LTD., a Colorado limited
a national banking association partnership
By: MarkWest Hydrocarbon, Inc.,
General Partner
By:
Mark Williamson, Patrick W. Murray,
Vice President, Vice President
FIRST ALLONGE
TO REVOLVER NOTE
THIS FIRST ALLONGE TO REVOLVER NOTE dated September 14, 1993, is
between MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership
("Borrower"), and FIRST AMERICAN NATIONAL BANK, a national banking association
(the "Lender").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and the Lender agree as follows:
1. This Allonge shall be attached to and shall become a part of the
Revolver Note dated November 20, 1992, made by Borrower and payable to the order
of the Lender, in the original principal amount of $10,000,000.00 (the "Note").
2. The Note is hereby amended by increasing the principal amount of
the Note from $10,000,000.00 to $12,500,000.00.
3. Except as amended hereby, the provisions of the Note are not
changed, altered or amended, and such provisions and the liens of the deeds of
trust and mortgages that secure the obligations under the Note are hereby
ratified and confirmed in all respects and remain in full force and effect.
4. This Allonge shall be binding upon and shall inure to the
benefit of the parties hereto and their heirs, administrators, executors,
personal representatives, successors and assigns.
EXECUTED as of the date first set forth above.
FIRST AMERICAN NATIONAL MARKWEST HYDROCARBON PARTNERS
BANK, LTD., a Colorado limited
a national banking association partnership
By: MarkWest Hydrocarbon, Inc.,
General Partner
By:
David C. May Patrick W. Murray,
Vice President Vice President
FIRST ALLONGE TO REVOLVER NOTE
THIS FIRST ALLONGE TO REVOLVER NOTE dated September 14, 1993, is
between MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership
("Borrower"), and NORWEST BANK DENVER, NATIONAL ASSOCIATION, a national banking
association (the "Lender").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and the Lender agree as follows:
1. This Allonge shall be attached to and shall become a part of the
Revolver Note dated November 20, 1992, made by Borrower and payable to the order
of the Lender, in the original principal amount of $10,000,000.00 (the "Note"').
2. The Note is hereby amended by increasing the principal amount of
the Note from $10,000,000.00 to $12,500,000.00.
3. Except as amended hereby, the provisions of the Note are not
changed, altered or amended, and such provisions and the liens of the deeds of
trust and mortgages that secure the obligations under the Note are hereby
ratified and confirmed in all respects and remain in full force and effect.
4. This Allonge shall be binding upon and shall inure to the
benefit of the parties hereto and their heirs, administrators, executors,
personal representatives, successors and assigns.
EXECUTED as of the date first set forth above.
NORWEST BANK DENVER, MARKWEST HYDROCARBON PARTNERS
NATIONAL ASSOCIATION, LTD., a Colorado limited
a national banking association partnership
By: MarkWest Hydrocarbon, Inc.,
General Partner
By:
Mark Williamson, Patrick W. Murray,
Vice President Vice President
SECOND AMENDMENT TO LOAN AGREEMENT
----------------------------------
This Second Amendment to Loan Agreement (this "Amendment") dated as of
---------
March 23, 1994 is by and among MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado
limited partnership (the "Borrower"), NORWEST BANK COLORADO, NATIONAL
--------
ASSOCIATION (successor to Norwest Bank Denver, National Association), a national
banking association, ("Norwest"), FIRST AMERICAN NATIONAL BANK, a national
-------
banking association ("First American") (Norwest and First American are referred
--------------
to individually as a "Lender" and collectively as the "Lenders"), and NORWEST,
------ -------
AS AGENT FOR THE LENDERS (in such capacity, the "Agent").
-----
RECITALS
--------
1. Borrower, the Lenders and the Agent executed a Loan Agreement
dated as of November 20, 1992 (the "Original Loan Agreement"), whereby the
-------- --------------
Lenders agreed to make Revolver Loans and a Term Loan to Borrower in accordance
with the terms and conditions set forth therein. The principal of and interest
on the Term Loan have been paid in full. Borrower, the Lenders and the Agent
executed a First Amendment to Loan Agreement dated as of September 14, 1993 (the
"First Amendment") whereby various terms of the Original Loan Agreement were
----- ---------
amended. The Original Loan Agreement, as amended by the First Amendment, is
herein referred to as the "Loan Agreement". Unless otherwise defined herein,
--------------
capitalized terms used herein shall have the meaning assigned to them in the
Loan Agreement.
2. Borrower, the Agent and the Lenders now desire to amend the Loan
Agreement to extend the Revolver Commitment Period from December 31, 1994 to
December 31, 1995, and to extend the maturity date from December 31, 1998 to
December 31, 1999.
AGREEMENT
---------
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Borrower, the Agent and each of the
Lenders hereby agree as follows:
1. Amendment of Section 1. A. The definitions of Loan Documents,
----------------------
Amended Notes, Revolver Commitment Period and Revolver Note set forth in Section
1 of the Loan Agreement shall be amended by restating the definition of each of
the following terms in their entirety to read as follows:
"Amended Notes" shall refer to each Revolver Note as amended by
-------------
the Allonge and Second Allonge for the appropriate Lender.
"Loan Documents" shall mean the Loan Agreement, as amended by
--------------
this Agreement, the Amended Notes, the Security Documents, the Covenant
Agreements and all other documents executed and delivered, from time to time, by
or on behalf of Borrower to the Agent or the Lenders in connection herewith or
therewith.
"Revolver Commitment Period" shall mean the period from November
--------------------------
20, 1992, to and including December 31, 1995, or such earlier date on which the
Revolver Notes become due and payable.
"Revolver Note" shall mean a note dated November 20, 1992,
-------------
substantially in the form of Exhibit B attached to the Original Loan Agreement,
---------
made by Borrower and payable to the order of Norwest or to First American, as
appropriate, with appropriate insertions, as amended by an Allonge dated
September 14, 1993, to increase the principal amount of such note to
$12,500,000.00, and as amended by Second Allonge dated March 23, 1994, to change
the maturity date from December 31, 1998 to December 31, 1999, together with any
and all renewals, extensions, amendments and changes of, or substitutions for
said note; collectively, the "Revolver Notes."
--------------
"Working Capital Facility" shall mean the loan provided for
------------------------
pursuant to that certain Working Capital Loan Agreement dated November 20, 1992,
between Borrower, the Lenders and the Agent, as such agreement may be amended
from time to time, in the maximum principal amount of $5,000,000, and which loan
is secured by various "Security Documents" (as such term is defined therein).
B. The following additional definitions are hereby added to
Section 1 of the Loan Agreement in
-1-
their appropriate alphabetical order:
"Second Allonge" shall refer individually to each Second Allonge
--------------
to Revolver Note dated March 23, 1994, between Borrower and either Norwest or
First American, as appropriate, which amends the Revolver Note payable to such
Lender to extend the maturity date from December 31, 1998 to December 31, 1999,
and which are in the form attached hereto as Exhibits A-1 and A-2, and the term
"Second Allonges" shall refer to both of the Second Allonges.
C. The term "Amendment Documents" when used in this Agreement shall
-------------------
refer to this Amendment and the Second Allonges.
2. Amendment of Section 2(b)(ii). Section 2(b)(ii) is hereby
-----------------------------
amended to (a) delete the date "March 31, 1995" in the twelfth and thirteenth
lines and substitute the date "March 31, 1996" therefor, and (b) delete the date
"December 31, 1998" in the fourteenth line and substitute the date "December 31,
1999" therefor.
3. Amendment of Section 9(j)(ii). Section 9(j)(ii) of the Loan
-----------------------------
Agreement is hereby deleted and restated in its entirety to read as follows:
(ii) So long as a Borrowing Base Deficiency does not exist and
no Event of Default or Unmatured Event of Default has occurred,
Borrower may make distributions in an aggregate cumulative amount
not to exceed 75 percent of Borrower's net income, determined in
accordance with GAAP and computed on a cumulative basis for all
periods since December 31, 1991, taking into account allowable
distributions previously declared or made since December 31, 1991;
provided however, that the distribution of $1,800,851 made in 1992
-------- -------
relating to 1991 earnings shall not be included in the calculation
of distributions declared or made since December 31, 1991;
notwithstanding any of the foregoing, distributions are allowable
only so long as they would not cause Borrower to be in
contravention of the financial covenants contained in Section
8(k), (l), (m) and (n).
4. Amendment of Section 13(b). Section 13(b) shall be amended by
--------------------------
changing the address of Norwest in both the provision for Norwest, as Lender,
and Norwest, as Agent to the following:
Norwest Bank Colorado, National Association
1740 Broadway
Denver, CO 80274-8699
Attention: Energy and Minerals Group
Fax No.: (303) 863-5196
5. Conditions Precedent. The amendments provided for in this
--------------------
Amendment shall not become effective until the Agent has received each of the
following:
A. This Amendment, executed by Borrower, the Agent and the
Lenders;
B. The Second Allonges, executed by Borrower and the
appropriate Lender;
C. A letter from each of John Fox and the General Partner
reconfirming their respective Covenant Agreement;
D. All legal matters incident to the Loans and the Amendment
Documents shall be satisfactory to counsel to the Agent, and the Agent shall
have received a favorable opinion addressed to the Agent and the Lenders of
Barry W. Spector, Esq., counsel for Borrowers, in form and substance
satisfactory to the Agent; and
E. 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.
6. Representations and Warranties. To induce the Agent and the
------------------------------
Lenders to enter into this Amendment, Borrower hereby represents and warrants to
the Agent and each Lender that:
-2-
A. Non-Contravention. The execution, delivery and performance
-----------------
by the Borrower of this Amendment, and the other Amendment Documents and the
borrowings thereunder, 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, 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 is a party or
is subject or by which any Related Person 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.
B. 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 in connection with the execution, delivery or performance by Borrower of
this Amendment, or any other Amendment Document or to consummate any
transactions contemplated hereby or thereby.
C. Authorization; Binding Effect. Borrower has full power and
-----------------------------
authority to enter into this Amendment and the other Amendment Documents. The
execution and delivery of this Amendment, and the other Amendment Documents, and
the performance and observance of their terms, conditions and obligations, have
been duly authorized by all necessary action by Borrower and the General
Partner. This Amendment and the other Amendment Documents are 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.
D. Representations and Warranties. All representations and
------------------------------
warranties contained in Section 7 of the Original Loan Agreement and in the
Security Documents shall be true on the date hereof as if then given, and
Borrower shall have performed or observed all terms, agreements, conditions and
obligations under the Loan Agreement and under the Security Documents to be
performed or observed on or prior to the date hereof.
E. No Default. No Event of Default or Unmatured Event of
----------
Default under the Loan Agreement shall have occurred and be continuing or would
result from the entering into of this Amendment.
The foregoing representations and warranties shall be deemed to
be representations and warranties made in the Loan Agreement for all purposes.
7. Continuing Effect. Except as expressly amended hereby, the Loan
-----------------
Agreement shall continue to be and shall remain in full force and effect in
accordance with its terms. References in the Loan Agreement to "this
Agreement", "this instrument" and like terms shall be deemed to be references to
the Loan Agreement as amended by this Amendment. When used in this Amendment or
in the Loan Agreement, each reference to a term defined in the Loan Agreement,
which is amended by this Amendment, shall be deemed to be the term as amended by
this Amendment. Any reference to the "Revolver/Term Loan Agreement" in the
Collateral Documents shall be deemed to be a reference to the Loan Agreement as
amended by this Amendment. The Borrower hereby confirms and acknowledges that
the term "Obligations" as used in the Security Agreement, includes all
obligations of the Borrower with respect to the Revolver Loans as extended
hereby and the Amended Notes and all other costs, fees, indemnities and expenses
in connection therewith.
8. This Amendment shall be governed by and construed under the laws
of the State of Colorado and shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
9. This Amendment may be executed in one or more counterparts, with
each party signing on different counterparts, each of which shall be deemed an
original, and all of which together shall constitute but one and the same
instrument.
BORROWER:
MARKWEST HYDROCARBON PARTNERS, LTD.,
a Colorado limited partnership
By: MARKWEST HYDROCARBON, INC.,
General Partner
-3-
By: _____________________________
Patrick W. Murray
Vice President
LENDERS:
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION (successor to Norwest Bank Denver,
National Association), a national banking association
By:_____________________________
Mark Williamson
Vice President
FIRST AMERICAN NATIONAL BANK,
a national banking association
By:______________________________
David C. May
Senior Vice President
AGENT:
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION (successor to Norwest Bank Denver,
National Association), a national banking association
By:_____________________________
Mark Williamson
Vice President
-4-
EXHIBIT A-1
SECOND ALLONGE
TO REVOLVER NOTE
THIS SECOND ALLONGE TO REVOLVER NOTE dated March 23, 1994 (this
"Allonge"), is between MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited
partnership ("Borrower"), and NORWEST BANK COLORADO, NATIONAL ASSOCIATION
(successor to Norwest Bank Denver, National Association), a national banking
association (the "Lender").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and the Lender agree as follows:
1. This Allonge shall be attached to and shall become a part of the
Revolver Note dated November 20, 1992, made by Borrower and payable to the order
of the Lender, in the original principal amount of $10,000,000.00 (the "Original
Note").
2. The Original Note was amended by increasing the principal amount
of the Original Note from $10,000,000.00 to $12,500,000.00 by First Allonge to
Revolver Note dated September 14, 1993 (the "First Allonge"). The Original
Note, as amended by the First Allonge, is herein referred to as the "Note".
3. All references in the Note to the "Loan Agreement" shall refer to
the Loan Agreement dated November 20, 1992 among Borrower, Lender, First
American National Bank, as a lender, and Norwest Bank Colorado, National
Association (successor to Norwest Bank Denver, National Association), as Agent,
as such agreement has been amended by First Amendment to Loan Agreement dated
September 14, 1993, and by Second Amendment to Loan Agreement dated as of the
date hereof, and as such agreement may be further amended from time to time.
4. The Note is hereby amended to extend the maturity date from
December 31, 1998 to December 31, 1999.
5. The Note is further amended by deleting the third full paragraph
of the Original Note and by substituting the following for it in its entirety:
As of December 31, 1995, the aggregate unpaid principal amount
outstanding under this Note shall be repaid to Lender in
sixteen equal quarterly installments, commencing March 31,
1996, 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 December 31, 1999.
6. Except as amended hereby, the provisions of the Note are not
changed, altered or amended, and such provisions and the liens of the deeds of
trust and mortgages that secure the obligations under the Note are hereby
ratified and confirmed in all respects and remain in full force and effect.
7. This Allonge shall be binding upon and shall inure to the benefit
of the parties hereto and their heirs, administrators, executors, personal
representatives, successors and assigns.
8. This Allonge is to be governed by and construed according to the
laws of the State of Colorado.
EXECUTED as of the date first set forth above.
NORWEST BANK COLORADO, MARKWEST HYDROCARBON PARTNERS
NATIONAL ASSOCIATION, LTD., a Colorado limited
(successor to Norwest partnership
-5-
Bank Denver, National
Association), By: MarkWest Hydrocarbon, Inc.,
a national banking General Partner
association
By:________________________ By:_________________________
Mark Williamson, Patrick W. Murray,
Vice President Vice President
-6-
EXHIBIT A-2
SECOND ALLONGE
TO REVOLVER NOTE
THIS SECOND ALLONGE TO REVOLVER NOTE dated March 23, 1994 (this
"Allonge"), is between MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited
partnership ("Borrower"), and FIRST AMERICAN NATIONAL BANK, a national banking
association (the "Lender").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and the Lender agree as follows:
1. This Allonge shall be attached to and shall become a part of the
Revolver Note dated November 20, 1992, made by Borrower and payable to the order
of the Lender, in the original principal amount of $10,000,000.00 (the "Original
Note").
2. The Original Note was amended by increasing the principal amount
of the Original Note from $10,000,000.00 to $12,500,000.00 by First Allonge to
Revolver Note dated September 14, 1993 (the "First Allonge"). The Original
Note, as amended by the First Allonge, is herein referred to as the "Note".
3. All references in the Note to the "Loan Agreement" shall refer to
the Loan Agreement dated November 20, 1992, among Borrower, Lender, and Norwest
Bank Colorado, National Association (successor to Norwest Bank Denver, National
Association), as a lender and as Agent, as such agreement has been amended by
First Amendment to Loan Agreement dated September 14, 1993, and by Second
Amendment to Loan Agreement dated as of the date hereof, and as such agreement
may be further amended from time to time.
4. The Note is hereby amended to extend the maturity date from
December 31, 1998 to December 31, 1999.
5. The Note is further amended by deleting the third full paragraph
of the Original Note and by substituting the following for it in its entirety:
As of December 31, 1995, the aggregate unpaid principal amount
outstanding under this Note shall be repaid to Lender in
sixteen equal quarterly installments, commencing March 31,
1996, 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 December 31, 1999.
6. Except as amended hereby, the provisions of the Note are not
changed, altered or amended, and such provisions and the liens of the deeds of
trust and mortgages that secure the obligations under the Note are hereby
ratified and confirmed in all respects and remain in full force and effect.
7. This Allonge shall be binding upon and shall inure to the benefit
of the parties hereto and their heirs, administrators, executors, personal
representatives, successors and assigns.
8. This Allonge is to be governed by and construed according to the
laws of the State of Colorado.
EXECUTED as of the date first set forth above.
FIRST AMERICAN NATIONAL MARKWEST HYDROCARBON PARTNERS
BANK, a national banking LTD., a Colorado limited
association partnership
By: MarkWest Hydrocarbon, Inc.,
General Partner
-7-
By:________________________ By:_________________________
David C. May Patrick W. Murray,
Senior Vice President Vice President
-8-
THIRD AMENDMENT TO LOAN AGREEMENT
---------------------------------
This Third Amendment to Loan Agreement (this "Amendment") dated as of
---------
September 8, 1995 is by and among MARKWEST HYDROCARBON PARTNERS, LTD., a
Colorado limited partnership (the "Borrower"), NORWEST BANK COLORADO, NATIONAL
--------
ASSOCIATION (successor to Norwest Bank Denver, National Association), a national
banking association, ("Norwest"), FIRST AMERICAN NATIONAL BANK, a national
-------
banking association ("First American"), and N M ROTHSCHILD AND SONS LIMITED, a
--------------
company organized and existing under the laws of England ("Rothschild")
----------
(Norwest, First American and Rothschild are referred to individually as a
"Lender" and collectively as the "Lenders"), and NORWEST, AS AGENT FOR THE
------- -------
LENDERS (in such capacity, the "Agent").
-----
RECITALS
--------
1. Borrower, Norwest, First American and Agent executed a Loan
Agreement dated as of November 20, 1992 (the "Original Loan Agreement"), whereby
-----------------------
Lenders agreed to make Revolver Loans and a Term Loan to Borrower in accordance
with the terms and conditions set forth therein. The principal of and interest
on the Term Loan have been paid in full. Borrower, Norwest, First American and
Agent executed a First Amendment to Loan Agreement dated as of September 14,
1993 (the "First Amendment") whereby various terms of the Original Loan
---------------
Agreement were amended. Borrower, Norwest, First American and Agent executed a
Second Amendment to Loan Agreement dated as of March 23, 1994 (the "Second
------
Amendment") whereby various terms of the Original Loan Agreement were further
---------
amended. The Original Loan Agreement, as amended by the First Amendment and
Second Amendment, is herein referred to as the "Loan Agreement". Unless
--------------
otherwise defined herein, capitalized terms used herein shall have the meaning
assigned to them in the Loan Agreement.
2. Borrower, Agent and Lenders now desire to amend the Loan Agreement,
among other things, to add Rothschild as a Lender, to reflect the execution of
replacement notes to reflect such addition of Rothschild, to extend the Revolver
Commitment Period from December 31, 1995 to June 30, 1997, to extend the
maturity date from December 31, 1999 to June 30, 2001, and to provide a LIBOR
interest option on Revolver Loans.
AGREEMENT
---------
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Borrower, Agent and each of Lenders
hereby agree as follows:
1. Amendment of Section 1. A. The definitions of Loan Documents,
----------------------
Loan Share,
Fixed Charge Coverage Ratio, Revolver Commitment Period, Revolver Loan and
Revolver Note set forth in Section 1 of the Loan Agreement shall be amended by
restating the definition of each of the following terms in their entirety to
read as follows:
"Fixed Charge Coverage Ratio" shall mean for the four most recent
-----------------------------
fiscal quarters, 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).
"Loan Documents" shall mean the Loan Agreement, as amended by this
--------------
Agreement, the Replacement Notes, the Security Documents, the Covenant
Agreements and all other documents executed and delivered, from time to time, by
or on behalf of Borrower to Agent or Lenders in connection herewith or
therewith.
"Loan Share" means with respect to each of Norwest and First American,
----------
forty percent and with respect to Rothschild, twenty percent.
"Revolver Commitment Period" shall mean the period from November 20,
--------------------------
1992, to and including June 30, 1997, or such earlier date on which the Revolver
Notes become due and payable.
"Revolver Loan" shall mean the loan provided for in Section 2(b)
-------------
hereof to Borrower by Lenders, in the form of a Base Rate Loan or a LIBOR Rate
Loan, all of which shall collectively be referred to as "Revolver Loans" or "the
-------------- ---
Revolver Loan," the maximum principal amount of which shall never exceed the
-------------
Revolver Commitment.
"Revolver Note" shall mean a Replacement Revolver Note dated September
-------------
8, 1995, substantially in the form of Exhibit A-1, A-2 or A-3 attached hereto,
-----------------------
made by Borrower and payable to the order of Norwest, First American or
Rothschild, as appropriate, with appropriate insertions, reissued in connection
with the assignment by Norwest and First American to Rothschild of a portion of
their interests in the Loan, in replacement of a note dated November 20, 1992,
substantially in the form of Exhibit B attached to the Original Loan Agreement
---------
made by Borrower and payable to the order of Norwest or First American, as
amended by an Allonge dated September 14, 1993, to increase the principal amount
of such note to $12,500,000.00, as amended by Second Allonge dated March 23,
1994, to change the maturity date from December 31, 1998 to December 31, 1999,
and which has a maturity date of June 30, 2001, together with any and all
renewals, extensions, amendments and changes of, or substitutions for said note;
collectively, the "Revolver Notes."
--------------
"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
Borrower in connection with this Amendment 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.
"Working Capital Facility" shall mean the loan provided for pursuant
------------------------
to that certain Working Capital Loan Agreement dated November 20, 1992, between
Borrower, Lenders and Agent, as such agreement may be amended from time to time,
in the maximum principal amount of $7,500,000, and which loan is secured by
various "Security Documents" (as such term is defined therein).
B. The following additional definitions are hereby added to Section
1 of the Loan Agreement in their appropriate alphabetical order:
"Applicable Margin" shall mean:
-----------------
(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 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 the Base Rate.
"Capital Adequacy Regulation" means any guideline, request or
---------------------------
directive of any
3
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.
"Conversion Date" means any date on which Borrower converts a Base
---------------
Rate Loan to a LIBOR Rate Loan, or a LIBOR Rate Loan to a Base Rate Loan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
------------------------
of the 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 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.
"Interest Payment Date" means, with respect to any LIBOR Rate Loan,
---------------------
the 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 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 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:
--------
(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;
(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
4
(c) no Interest Period may be selected by Borrower which would
extend beyond the last day of the Revolver Commitment Period.
"LIBOR Rate" shall mean, for any Interest Period, an interest rate per
----------
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
amount 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.
"LIBOR Rate Loan" shall mean a Revolver Loan that bears interest based
---------------
on the LIBOR Rate.
"Notice of Conversion/Continuation" means a notice given by Borrower
---------------------------------
to Agent pursuant to Section 2(b)(ii), in substantially the form of Exhibit N.
---------------- ---------
"Replacement Notes" shall refer to each Replacement Revolver Note for
-----------------
the appropriate Lender that is executed by Borrower, in connection with the
addition of Rothschild as a Lender, for the purpose of replacing each original
Revolver Note as amended by the Allonge and Second Allonge for the appropriate
Lender.
C. The definition of Amended Notes set forth in Section 1 of the
Loan Agreement shall be deleted in its entirety.
D. The term "Amendment Documents" when used in this Agreement shall
-------------------
refer to this Amendment, the Replacement Notes and the Second Mortgage
Amendments.
2. Amendment of Section 2(b)(i). Section 2(b)(i) of the Loan Agreement
----------------------------
is hereby deleted and restated in its entirety to read as follows:
(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 C 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 Day immediately preceding the day such
Revolver Advance is requested to be made in
5
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) Unless Agent shall otherwise state in writing, during
the existence of an Unmatured Event of Default or an Event of Default,
Borrower may not elect to have a Revolver Advance made as a LIBOR Rate
Loan.
(D) After giving effect to any LIBOR Rate Loan, there shall
not be more than six different Interest Periods in effect.
(E) 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.
(F) All Revolver Advances requested by Borrower shall be
made pro rata by each Lender in proportion to such Lender's Loan Share.
6
3. Amendment of Section 2(b)(ii). Old Sections 2(b)(ii) and 2(b)(iii)
-----------------------------
shall be renumbered to be Sections 2(b)(iii) and 2(b)(iv), and a new Section
2(b)(ii) shall be inserted to read in its entirety as follows:
(ii) Conversion and Continuation Elections.
-------------------------------------
(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
7
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.
(D) Unless Agent shall otherwise state in writing, during
the existence of an Unmatured Event of Default or Event of Default,
Borrower may not elect to have a Revolver Loan converted into or continued
as a LIBOR Rate Loan.
(E) 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.
4. Amendment of new Section 2(b)(iii). Section 2(b)(iii) as renumbered
----------------------------------
under paragraph 3 above is hereby amended to (a) delete the date "March 31,
1996" in the twelfth and thirteenth lines and substitute the date "September 30,
1997" therefor, and (b) delete the date "December 31, 1999" in the fourteenth
line and substitute the date "June 30, 2001" therefor.
5. Amendment of new Section 2(b)(iv). Section 2(b)(iv) as renumbered
---------------------------------
under paragraph 3 above is hereby deleted and restated in its entirety to read
as follows:
(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(g). 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(g). 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
8
Rate Loan then outstanding and then to LIBOR Rate Loans with the shortest
Interest Periods remaining.
6. Amendment of Section 2(d). Section 2(d) is hereby deleted and
-------------------------
restated in its entirety to read as follows:
(d) 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.
7. Amendment of Section 2(e). Section 2(e) is hereby amended by adding
-------------------------
the following phrase at the end of such paragraph:
, 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.
8. Amendment of Section 2(g). Section 2(g) is hereby amended by deleting
-------------------------
the last sentence thereof and restating such sentence in its entirety to read as
follows:
Any such prepayment of principal under this Section 2 shall be applied pro
rata in
9
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.
9. New Section 3A. A new Section 3A is hereby added to read in its
--------------
entirety as follows:
SECTION 3A. 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 3A(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
10
additional sums payable under this Section 3A(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.
(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 3A(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
11
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 September
5, 1995, 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 (X) to immediately convert all outstanding
LIBOR Rate Loans to Base Rate Loans in accordance with Section 2(b)(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 Revolver Loans, credits or other obligations 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(b)(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);
12
(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(b)(iv);
----------------
(iv) the prepayment (including pursuant to Section 2(b)(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(b)(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 3A, Agent shall deliver to Borrower a
certificate setting forth in reasonable detail the amount payable to
Lenders hereunder and such certificate shall be
13
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 3A shall survive the payment of all other Obligations.
10. Amendment of Section 4(a). Section 4(a) is hereby amended to delete
-------------------------
the figure "20,000,000" in the fourth line and substitute the phrase "the
Maximum Principal Amount" therefor.
11. Amendment of Section 8(1). Section 8(1) is hereby amended to delete
-------------------------
the figure "65%" in the second line and substitute the figure "60%" therefor.
12. Amendment of Section 8(m). Section 8(m) is hereby deleted and
-------------------------
restated in its entirety to read as follows:
(m) Tangible Net Worth. Borrower shall maintain a Tangible Net Worth equal
------------------
to or greater than the sum of $18,000,000 plus 40 percent of consolidated
net income determined in accordance with GAAP and earned by Borrower after
December 31, 1994 (but excluding any net losses).
13. Amendment of Section 8(n). Section 8(n) is hereby amended to delete
-------------------------
the figure "1.5" in the last line and substitute the figure "2.0" therefor.
14. Amendment of Section 9(j)(i). Section 9(j)(i) is hereby amended by
----------------------------
adding the following phrase to the end of the first sentence in line 8:
, including without limitation distributions to its partners in the
aggregate not to exceed $1,250,000 associated with the deferred gain on the
sale of oil and gas properties; provided that such distributions associated
with deferred gain are made on or before April 15, 1996, and after which
date distributions associated with deferred gain may not be made by
Borrower.
15. Amendment of Section 9(j)(ii). Section 9(j)(ii) of the Loan Agreement
-----------------------------
is hereby deleted and restated in its entirety to read as follows:
(ii) So long as a Borrowing Base Deficiency does not exist and no
Event of
14
Default or Unmatured Event of Default has occurred and is
continuing, Borrower may make distributions in an aggregate cumulative
amount not to exceed 60 percent of Borrower's net income, determined
in accordance with GAAP and computed on a cumulative basis for all
periods since December 31, 1994, taking into account allowable
distributions previously declared or made since December 31, 1994;
provided, however, that the distribution of $2,078,297 made in 1995
-----------------
relating to 1994 earnings shall not be included in the calculation of
distributions declared or made since December 31, 1994;
notwithstanding any of the foregoing, distributions are allowable only
so long as they would not cause Borrower to be in contravention of the
financial covenants contained in Section 8(k), (l), (m) and (n).
16. Amendment of Section 13(b). Section 13(b) shall be amended by adding
--------------------------
the following address of Rothschild to the Lenders section:
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
17. New Exhibit N. A new Exhibit N is hereby added to read in its
-------------
entirety as Exhibit N attached hereto--"Notice of Conversion/Continuation."
18. Conditions Precedent. The amendments provided for in this Amendment
--------------------
shall not become effective until Agent has received each of the following:
A. This Amendment, executed by Borrower, Agent and Lenders;
B. The Replacement Note, executed by Borrower for each of the
Lenders;
C. Counterparts of the Second Mortgage Amendments, duly executed and
acknowledged by Borrower and Agent, and to the extent applicable, the trustee
thereunder;
D. A letter from each of John Fox and the General Partner
reconfirming their
15
respective Covenant Agreement;
E. Evidence acceptable to Agent that the indebtedness secured by the
RIMCO Mortgages (as defined in that certain Subordination Agreement dated as of
September 14, 1993 between RIMCO Partners, L.P., Resource Investors Management
Company Limited Partnership and the Agent) has been fully paid and that the
RIMCO Mortgages have been released or will be released in due course.
F. Results of UCC lien searches as to Borrower for the States of
Arkansas, Colorado and West Virginia and for the following counties: Crittenden
County, Arkansas; Boyd, Greenup and Pike Counties, Kentucky; and Wayne and
Kanawha Counties, West Virginia, and for all other relevant filing jurisdictions
as to the Collateral;
G. All legal matters incident to the Loans and the Amendment
Documents shall be satisfactory to counsel to Agent, and Agent shall have
received a favorable opinion addressed to Agent and Lenders of Barry W.
Spector, Esq., counsel for Borrowers, in form and substance satisfactory to
Agent; and
H. All other documents and assurances which 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.
19. Representations and Warranties. To induce Agent and Lenders to enter
------------------------------
into this Amendment, Borrower hereby represents and warrants to Agent and each
Lender that:
A. Non-Contravention. The execution, delivery and performance by
-----------------
Borrower of this Amendment, and the other Amendment Documents and the borrowings
thereunder, 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, 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 is a party or is subject or by which any
Related Person 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.
B. 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 in connection with the execution, delivery or performance by Borrower of
this Amendment, or any other Amendment Document or to consummate any
transactions contemplated hereby or thereby.
16
C. Authorization; Binding Effect. Borrower has full power and
-----------------------------
authority to enter into this Amendment and the other Amendment Documents. The
execution and delivery of this Amendment, and the other Amendment Documents, and
the performance and observance of their terms, conditions and obligations, have
been duly authorized by all necessary action by Borrower and the General
Partner. This Amendment and the other Amendment Documents are 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.
D. Representations and Warranties. All representations and
------------------------------
warranties contained in Section 7 of the Original Loan Agreement and in the
Security Documents shall be true on the date hereof as if then given, and
Borrower shall have performed or observed all terms, agreements, conditions and
obligations under the Loan Agreement and under the Security Documents to be
performed or observed on or prior to the date hereof.
E. No Default. No Event of Default or Unmatured Event of Default
----------
under the Loan Agreement shall have occurred and be continuing or would result
from the entering into of this Amendment.
The foregoing representations and warranties shall be deemed to be
representations and warranties made in the Loan Agreement for all purposes.
20. Continuing Effect. Except as expressly amended hereby, the Loan
-----------------
Agreement shall continue to be and shall remain in full force and effect in
accordance with its terms. References in the Loan Agreement to "this
Agreement", "this instrument" and like terms shall be deemed to be references to
the Loan Agreement as amended by this Amendment. When used in this Amendment or
in the Loan Agreement, each reference to a term defined in the Loan Agreement,
which is amended by this Amendment, shall be deemed to be the term as amended by
this Amendment. Any reference to the "Revolver/Term Loan Agreement" in the
Collateral Documents shall be deemed to be a reference to the Loan Agreement as
amended by this Amendment. Borrower hereby confirms and acknowledges that the
term "Obligations" as used in the Security Agreement, includes all obligations
of Borrower with respect to the Revolver Loans as extended hereby and the
Replacement Notes and all other costs, fees, indemnities and expenses in
connection therewith. In connection with the execution of this Amendment and
the issuance by Borrower of the Replacement Notes, the Lenders acknowledge and
agree that the original notes dated as of November 20, 1992 (as amended by the
First and Second Allonges) held by Norwest and First American have been marked
"Replaced in rearrangement, but not in extinguishment or discharge, of
indebtedness represented hereby by Replacement Notes dated September 8, 1995"
and evidence of such notation has been provided to Borrower.
17
21. Governing Law. This Amendment shall be governed by and construed
-------------
under the laws of the State of Colorado and shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
22. Assignment. Norwest and First American hereby assign and transfer to
----------
Rothschild, without any warranties either express or implied, a sufficient part
of all their rights, title and interest in, to and under the Loan 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 - 40%
First American - 40%
Rothschild - 20%
23. Counterparts. This Amendment may be executed in one or more
------------
counterparts, with each party signing on different counterparts, each of which
shall be deemed an original, and all of which together shall constitute but one
and the same instrument.
BORROWER:
MARKWEST HYDROCARBON PARTNERS, LTD.,
a Colorado limited partnership
By: MARKWEST HYDROCARBON, INC.,
General Partner
By: _____________________________
John M. Fox
President
LENDERS:
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION (successor to Norwest Bank Denver,
18
National Association), a national banking association
By:_____________________________
Thomas M. Foncannon
Vice President
FIRST AMERICAN NATIONAL BANK,
a national banking association
By:______________________________
David C. May
Executive Vice President
N M ROTHSCHILD AND SONS LIMITED,
a company organized and existing under
the laws of England
By:______________________________
Name:_________________________
Title:________________________
AGENT:
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION (successor to Norwest Bank Denver,
National Association), a national banking association
By:_____________________________
Thomas M. Foncannon
Vice President
19
Exhibit A-1
-----------
REPLACEMENT REVOLVER NOTE
-------------------------
$10,000,000.00 Denver, Colorado
September 8, 1995
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), 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,
------
2001, the principal sum of Ten Million Dollars ($10,000,000.00), or so much
thereof as may be advanced by Lender pursuant to the Loan Agreement dated
November 20, 1992, as amended, between Borrower, Norwest Bank Colorado, National
Association, individually and as agent, First American National Bank and N M
Rothschild and Sons Limited (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 replacement and
rearrangement, but not in extinguishment or discharge, of the original Revolver
Notes, as amended by the First and Second Allonges, in connection with the
assignment by Norwest and First American to Rothschild of a portion of their
interests in the Loan. 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 has been amended by
First Amendment to Loan Agreement dated September 14, 1993, by Second Amendment
to Loan Agreement dated as of March 23, 1994, and by Third Amendment to Loan
Agreement dated as of the date hereof, and as such agreement may be further
amended from time to time.
As of June 30, 1997, the aggregate unpaid principal amount outstanding
under this Note shall be repaid to Lender in sixteen equal quarterly
installments, commencing September 30, 1997, 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, 2001.
Interest shall accrue daily, shall be payable in arrears on the Interest
Payment Date, commencing September 30, 1995 and at the maturity of this Note,
and shall be calculated on the
A-1-1
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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc., General Partner
By ___________________________________________
John M. Fox, President
A-1-3
Exhibit A-2
-----------
REPLACEMENT REVOLVER NOTE
-------------------------
$10,000,000.00 Denver, Colorado
September 8, 1995
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), 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 ("Lender"), on or before June 30, 2001, the principal sum of Ten
------
Million Dollars ($10,000,000.00), or so much thereof as may be advanced by
Lender pursuant to the Loan Agreement dated November 20, 1992, as amended,
between Borrower, Norwest Bank Colorado, National Association, individually and
as agent, First American National Bank and N M Rothschild and Sons Limited (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 replacement and
rearrangement, but not in extinguishment or discharge, of the original Revolver
Notes, as amended by the First and Second Allonges, in connection with the
assignment by Norwest and First American to Rothschild of a portion of their
interests in the Loan. 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 has been amended by
First Amendment to Loan Agreement dated September 14, 1993, by Second Amendment
to Loan Agreement dated as of March 23, 1994, and by Third Amendment to Loan
Agreement dated as of the date hereof, and as such agreement may be further
amended from time to time.
As of June 30, 1997, the aggregate unpaid principal amount outstanding
under this Note shall be repaid to Lender in sixteen equal quarterly
installments, commencing September 30, 1997, 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, 2001.
Interest shall accrue daily, shall be payable in arrears on the Interest
Payment Date, commencing September 30, 1995 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
A-2-1
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.
Borrower, and all endorsers, sureties and guarantors of this Note, hereby
severally waive
A-2-2
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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc., General Partner
By ___________________________________________
John M. Fox, President
A-2-3
Exhibit A-3
-----------
REPLACEMENT REVOLVER NOTE
-------------------------
$5,000,000.00 Denver, Colorado
September 8, 1995
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), with an address of 5613 DTC Parkway, Suite 400, Englewood, CO
--------
80111, for value received, hereby promises to pay to the order of N M Rothschild
and Sons Limited, a company organized and existing under the laws of England
("Lender"), on or before June 30, 2001, the principal sum of Five Million
-------
Dollars ($5,000,000.00), or so much thereof as may be advanced by Lender
pursuant to the Loan Agreement dated November 20, 1992, as amended, between
Borrower, Norwest Bank Colorado, National Association, individually and as
agent, First American National Bank and N M Rothschild and Sons Limited (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 replacement and
rearrangement, but not in extinguishment or discharge, of the original Revolver
Notes, as amended by the First and Second Allonges, in connection with the
assignment by Norwest and First American to Rothschild of a portion of their
interests in the Loan. 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 has been amended by
First Amendment to Loan Agreement dated September 14, 1993, by Second Amendment
to Loan Agreement dated as of March 23, 1994, and by Third Amendment to Loan
Agreement dated as of the date hereof, and as such agreement may be further
amended from time to time.
As of June 30, 1997, the aggregate unpaid principal amount outstanding
under this Note shall be repaid to Lender in sixteen equal quarterly
installments, commencing September 30, 1997, 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, 2001.
Interest shall accrue daily, shall be payable in arrears on the Interest
Payment Date, commencing September 30, 1995 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
A-3-1
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.
Borrower, and all endorsers, sureties and guarantors of this Note, hereby
severally waive
A-3-2
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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc., General Partner
By _____________________________________________
John M. Fox, President
A-3-3
EXHIBIT N
MARKWEST HYDROCARBON PARTNERS, LTD.
Notice of Conversion/Continuation
To Norwest Bank Colorado, National Association:
This Notice of Conversion/Continuation is given pursuant to Section 2(b)(ii) of
that certain Loan Agreement, dated as of November 20, 1992 as the same may have
been amended to the date hereof (the "Loan Agreement"), between Markwest
Hydrocarbon Partners, Ltd. ("Borrower"), Norwest Bank Colorado, National
Association ("Norwest"), First American National Bank ("First American"), N M
Rothschild and Sons Limited ("Rothschild") (Norwest, First American and
Rothschild 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;
[ ] (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 PARTNERS, LTD.
By: Markwest Hydrocarbon, Inc., General Partner
By:_______________________________________________
Title:____________________________________________
N-2
FOURTH AMENDMENT TO LOAN AGREEMENT
----------------------------------
This Fourth Amendment to Loan Agreement (this "Amendment") dated as of May
---------
31, 1996, is by and among MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado
limited partnership (the "Borrower"), NORWEST BANK COLORADO, NATIONAL
--------
ASSOCIATION (successor to Norwest Bank Denver, National Association), a national
banking association, ("Norwest"), FIRST AMERICAN NATIONAL BANK, a national
-------
banking association ("First American"), and N M ROTHSCHILD AND SONS LIMITED, a
--------------
company organized and existing under the laws of England ("Rothschild")
----------
(Norwest, First American and Rothschild are referred to individually as a
"Lender" and collectively as the "Lenders"), and NORWEST, AS AGENT FOR THE
------- -------
LENDERS (in such capacity, the "Agent").
-----
RECITALS
--------
1. Borrower, Norwest, First American and Agent executed a Loan Agreement
dated as of November 20, 1992 (the "Original Loan Agreement"), whereby Lenders
-----------------------
agreed to make Revolver Loans and a Term Loan to Borrower in accordance with the
terms and conditions set forth therein. The principal of and interest on the
Term Loan have been paid in full. Borrower, Norwest, First American and Agent
executed a First Amendment to Loan Agreement dated as of September 14, 1993 (the
"First Amendment") whereby various terms of the Original Loan Agreement were
---------------
amended. Borrower, Norwest, First American and Agent executed a Second
Amendment to Loan Agreement dated as of March 23, 1994 (the "Second Amendment")
----------------
whereby various terms of the Original Loan Agreement were further amended.
Borrower, Norwest, First American, Rothschild, and Agent executed a Third
Amendment to Loan Agreement dated as of September 8, 1995 (the "Third
-----
Amendment") whereby various terms of the Original Loan Agreement were further
---------
amended and Rothschild was added as one of the Lenders. The Original Loan
Agreement, as amended by the First Amendment, Second Amendment and Third
Amendment, is herein referred to as the "Loan Agreement". Unless otherwise
--------------
defined herein, capitalized terms used herein shall have the meaning assigned to
them in the Loan Agreement.
2. Borrower, Agent and Lenders now desire to amend the Loan Agreement,
among other things, to increase the principal amount of the Revolver Loan from
$25,000,000 to $40,000,000, to extend the Revolver Commitment Period from June
30, 1997 to June 30, 1998, to extend the maturity date from June 30, 2001 to
June 30, 2002, and to add additional collateral to secure the Loans.
AGREEMENT
---------
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Borrower, Agent, and each of
Lenders hereby agree as follows:
1. Amendment of Section 1. A. The definitions of Allonge, Columbia
----------------------
Contracts, Fixed Charge Coverage Ratio, Loan Documents, Loan Share, Maximum
Principal Amount,
Revolver Commitment Period and Revolver Note set forth in Section 1 of the Loan
Agreement shall be amended by restating the definition of each of the following
terms in their entirety to read as follows:
"Allonge" shall refer individually to each First Allonge dated as of
-------
May 31, 1996, between Borrower and Norwest, First American, or Rothschild, as
appropriate, which amends the Replacement Revolver Note payable to such Lender
to increase the principal amount of such note to $13,333,333.33, to extend the
Revolver Commitment Period from June 30, 1997 to June 30, 1998, and to extend
the maturity date from June 30, 2001 to June 30, 2002, and which are in the form
attached hereto as Exhibits A-1, A-2 and A-3. The term "Allonges" shall refer
to all three Allonges.
"Columbia Contracts" shall mean (a) Natural Gas Liquids Purchase
------------------
Agreement dated as of April 26, 1988 between Columbia Gas Transmission
Corporation ("Columbia") and Borrower as amended November 4, 1988, July 31,
1989, December 24, 1990 and January 28, 1991 (Siloam); (b) Natural Gas Liquids
Purchase Agreement dated as of December 24, 1990, between Columbia and Borrower
as amended January 28, 1991 (Boldman); (c) Contract for Construction and Lease
of Boldman Plant dated December 24, 1990 between Columbia and Borrower; (d)
Letter Agreement dated March 9, 1995 between Columbia and Borrower; 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-Construction Premises (the "Demolition
----------
Agreement"), (iii) Purchase and Demolition Agreement-Remaining Premises (the
---------
"Purchase Agreement"), and (iv) Processing Agreement-Kenova Processing Plant
-------------------
(the "Processing Agreement"), all dated March 15, 1995 between Columbia and
--------------------
Borrower, 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 Borrower and
any shippers on Columbia's system covering processing of such shippers' gas at
the Kenova Processing Plant.
"Fixed Charge Coverage Ratio" shall mean for the 12 most recent
---------------------------
consecutive 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).
"Loan Documents" shall mean the Loan Agreement, as amended by this
--------------
Amendment, the Amended Notes, the Security Documents, the Covenant Agreements
and all other documents executed and delivered, from time to time, by or on
behalf of Borrower to Agent or Lenders in connection herewith or therewith.
"Loan Share" means with respect to each of Norwest, First American,
----------
and Rothschild, thirty-three and one-third percent.
"Maximum Principal Amount" shall be $40,000,000.
------------------------
"Revolver Commitment Period" shall mean the period from November 20,
--------------------------
1992,
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to and including June 30, 1998, or such earlier date on which the Revolver
Notes become due and payable.
"Revolver Note" shall mean a Replacement Revolver Note dated September
-------------
8, 1995, substantially in the form of Exhibits A-1, A-2 and A-3 attached to the
Third Amendment, made by Borrower and payable to the order of Norwest, First
American or Rothschild, as appropriate, with appropriate insertions, as amended
by a First Allonge dated as of May 31, 1996, to increase the principal amount of
such note to $13,333,333.33 and to change the maturity date from June 30, 2001
to June 30, 2002, together with any and all renewals, extensions, amendments and
changes of, or substitutions for said note; collectively the "Revolver Notes."
--------------
B. The following additional definitions are hereby added to Section
1 of the Loan Agreement in their appropriate alphabetical order:
"Amended Notes" shall refer to each Replacement Revolver Note as
-------------
amended by the Allonge for the appropriate lender.
"Amendment to Security Agreement" shall refer to the Amendment to
-------------------------------
Security Agreement dated as of May 31, 1996, executed by Borrower and Agent in
connection with this Amendment, 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.
"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
Borrower in connection with this Amendment 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.
C. The definition of Second Allonge set forth in Section 1 of the
Loan Agreement shall be deleted in its entirety.
D. The term "Amendment Documents" when used in this Agreement shall
-------------------
refer to this Amendment, the Allonges, the Amendment to Security Agreement, the
Third Mortgage Amendments and any necessary amendments to Financing Statements.
2. Amendment of Section 2(b)(iii). Section 2(b)(iii) is hereby
------------------------------
amended to (a) delete the date "September 30, 1997" in the twelfth and
thirteenth lines and substitute the date
-3-
"September 30, 1998" therefor, and (b) delete the date "June 30, 2001" in the
fourteenth line and substitute the date "June 30, 2002" therefor.
3. Amendment of Section 4(c)(i). Section 4(c)(i) is hereby deleted and
----------------------------
restated in its entirety to read as follows:
(i) The Lenders shall determine the Borrowing Base (which shall
never exceed the Maximum Principal Amount) semi-annually, as of June 15 and
December 15 of each year that this Agreement is in effect, commencing June 15,
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.
4. Amendment of Section 8(b). Section 8(b) is hereby amended by
-------------------------
adding the following new subsection 8(b)(vii) at the end, to read as follows:
"(vii) On or before November 15 of each year an annual budget for
Borrower's operations for the next calendar year."
5. Amendment of Section 8(m). Section 8(m) is hereby amended by adding
-------------------------
the following phrase to the end of such section:
"plus 50 percent of the net proceeds of any public offering by
Borrower."
6. New Section 8(q). A new Section 8(q) is hereby added to Section 8 to
----------------
read as follows:
"(q) Capital Expenditure Review. Borrower shall consult with Lenders
--------------------------
concerning the details of any single project with estimated capital expenditures
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.
7. Amendment of Section 9(c). Section 9(c) is hereby amended to insert
-------------------------
the following phrase after the word "except" in line 12 and before the phrase
"endorsements of negotiable instruments":
"(i) guarantees by Borrower of Debt incurred by MarkWest Coalseam
Development Company L.L.C. 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
-4-
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) ..."
8. Conditions Precedent. The amendments provided for in this Amendment
--------------------
shall not become effective until Agent has received each of the following:
A. A commitment fee of $75,000, representing 1/2 of one percent of
$15,000,000, the increase in the Maximum Principal Amount from $25,000,000 to
$40,000,000.
B. This Amendment, executed by Borrower, Agent and Lenders;
C. The Allonge, executed by Borrower for each of the Lenders;
D. Counterparts of the Third Mortgage Amendments, the Amendment to
Security Agreement, and any financing statements or amendments to financing
statements necessary to perfect security interests in any personal property
included in the collateral covered by the Third Mortgage Amendments or the
Amendment to Security Agreement, duly executed and acknowledged by Borrower and
Agent, and to the extent applicable, the trustee thereunder;
E. A letter from each of John Fox and the General Partner
reconfirming their respective Covenant Agreement;
F. The following items concerning the Kenova Processing Plant:
(i) The Columbia Assessment and Remediation Plan (as defined
in the Construction Agreement) shall be acceptable to the Lenders in their
sole discretion;
(ii) A Certificate executed by the President of Borrower's
general partner certifying that (a) the Kenova Processing Plant has
satisfactorily passed the performance tests required to be ready for
"Unrestricted Service" as set forth in the Construction Agreement or
setting forth in reasonable detail deficiencies still to be corrected; (b)
such plant is currently operating in substantial compliance with the
Processing Agreement; (c) Borrower has obtained with regard to the Kenova
Processing Plant all governmental permits, licenses and approvals (other
than FERC approvals) necessary for the construction and operation of such
plant by Borrower; and (d) such plant is ready for Unrestricted Service and
has been accepted in such condition by Columbia.
G. Updated title commitment covering the Siloam Facility
demonstrating to Lenders' satisfaction that Agent will have a valid first lien
on such collateral to the full extent of the Maximum Principal Amount;
-5-
H. Results of UCC lien searches as to Borrower for the States of
Arkansas, Colorado, 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, and for all other relevant filing jurisdictions as to the Collateral;
I. All legal matters incident to the Loans and the Amendment
Documents shall be satisfactory to counsel to Agent, and Agent shall have
received a favorable opinion addressed to Agent and Lenders of Barry W. Spector,
Esq., counsel for Borrower, in form and substance satisfactory to Agent;
J. Revised versions of Exhibits I, J, K and L to the Loan
Agreement, current as of May 22, 1996;
K. Photocopies of all executed documents relating to Borrower's
investment in West Shore Processing Company, LLC and Basin Pipeline, L.L.C. and
the related refinancing transaction with Bank of America Illinois; and
L. All other documents and assurances which 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.
9. Amended Exhibits. Exhibits I, J, K and L to the Loan Agreement shall
----------------
be amended and restated in the form of Exhibits I, J, K and L attached hereto.
10. Representations and Warranties. To induce Agent and Lenders to enter
------------------------------
into this Amendment, Borrower hereby represents and warrants to Agent and each
Lender that:
A. Non-Contravention. The execution, delivery and performance by
-----------------
Borrower of this Amendment, and the other Amendment Documents and the borrowings
thereunder, 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, 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 is a party or is subject or by which any
Related Person 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.
B. 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 in connection with the execution, delivery or performance by Borrower of
this Amendment, or any other Amendment Document or to consummate any
transactions contemplated hereby or thereby.
-6-
C. Authorization; Binding Effect. Borrower has full power and
-----------------------------
authority to enter into this Amendment and the other Amendment Documents. The
execution and delivery of this Amendment, and the other Amendment Documents, and
the performance and observance of their terms, conditions and obligations, have
been duly authorized by all necessary action by Borrower and the General
Partner. This Amendment and the other Amendment Documents are 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.
D. Representations and Warranties. All representations and
------------------------------
warranties contained in Section 7 of the Original Loan Agreement and in the
Security Documents shall be true on the date hereof as if then given, and
Borrower shall have performed or observed all terms, agreements, conditions and
obligations under the Loan Agreement and under the Security Documents to be
performed or observed on or prior to the date hereof.
E. No Default. No Event of Default or Unmatured Event of Default
----------
under the Loan Agreement shall have occurred and be continuing or would result
from the entering into of this Amendment.
F. First Priority Security Interest. Upon proper filing and
--------------------------------
recording of the Third Mortgage Amendment and related financing statements
covering the Kenova Processing Plant, the Agent, on behalf of Lenders will have
a perfected first priority lien or security interest in all of the Collateral
subject to such mortgage.
The foregoing representations and warranties shall be deemed to be
representations and warranties made in the Loan Agreement for all purposes.
11. Kenova Title. 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.
12. Continuing Effect. Except as expressly amended hereby, the Loan
-----------------
Agreement shall continue to be and shall remain in full force and effect in
accordance with its terms. References in the Loan Agreement to "this Agreement",
"this instrument" and like terms shall be deemed to be references to the Loan
Agreement as amended by this Amendment. When used in this Amendment or in the
Loan Agreement, each reference to a term defined in the Loan Agreement, which is
amended by this Amendment, shall be deemed to be the term as amended by this
Amendment. Any reference to the "Revolver/Term Loan Agreement" in the Collateral
-7-
Documents shall be deemed to be a reference to the Loan Agreement as amended by
this Amendment. Borrower hereby confirms and acknowledges that the term
"Obligations" as used in the Security Agreement, includes all obligations of
Borrower with respect to the Revolver Loans as increased hereby and the Amended
Notes and all other costs, fees, indemnities and expenses in connection
therewith.
13. Governing Law. This Amendment shall be governed by and construed
-------------
under the laws of the State of Colorado and shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
14. Assignment. Norwest and First American hereby assign and transfer to
----------
Rothschild, without any warranties either express or implied, a sufficient part
of all their rights, title and interest in, to and under the Loan Agreement, the
Loans, the Amended 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 - 33-1/3 %
First American - 33-1/3 %
Rothschild - 33-1/3 %
15. Counterparts. This Amendment may be executed in one or more
------------
counterparts, with each party signing on different counterparts, each of which
shall be deemed an original, and all of which together shall constitute but one
and the same instrument.
BORROWER:
MARKWEST HYDROCARBON PARTNERS, LTD.,
a Colorado limited partnership
By: MARKWEST HYDROCARBON, INC.,
General Partner
By: _____________________________
John M. Fox
President
LENDERS:
NORWEST BANK COLORADO, NATIONAL
-8-
ASSOCIATION (successor to Norwest Bank Denver,
National Association), a national banking association
By:_____________________________
Thomas M. Foncannon
Vice President
FIRST AMERICAN NATIONAL BANK,
a national banking association
By:______________________________
Mariah G. Lundberg
Assistant Vice President
N M ROTHSCHILD AND SONS LIMITED,
a company organized and existing under
the laws of England
By:______________________________ By:________________________________
Name: ________________________ Name:___________________________
Title: _________________________ Title:__________________________
AGENT:
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION (successor to Norwest Bank Denver,
National Association), a national banking association
By:_____________________________
Thomas M. Foncannon
Vice President
-9-
REVOLVER NOTE
-------------
$10,000,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited
partnership, ("Borrower"), 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 Denver, National Association, a national banking association
("Lender"), on or before December 31, 1998, the principal sum of Ten Million
----------
Dollars ($10,000,000.00), or so much thereof as may be advanced by Lender
pursuant to the Loan Agreement of even date herewith between Borrower, Norwest
Bank Denver, National Association, individually and as agent, and First American
National Bank (the "Loan Agreement"), together with interest on the outstanding
---- ---------
unpaid principal balance at the Adjusted Prime Rate 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. All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Loan Agreement.
As of December 31, 1994, the aggregate unpaid principal amount
outstanding under this Note shall be repaid to Lender in sixteen equal quarterly
installments, commencing March 31, 1993, 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 December 31, 1998.
Interest shall accrue daily, shall be payable on the last day of
each calendar quarter, commencing December 31, 1992 and at the maturity of this
Note, and shall be calculated on the basis of a 365 or 366-day year, as
appropriate. 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 tot he 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.
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, as set forth on
Schedule I hereto; 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.
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
-2-
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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray,
Vice President
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Schedule I
----------
Principal Outstanding
Amount Amount of Principal
Date of Advance Payment Balance
---- ---------- ------- -------
A-1
REVOLVER NOTE
-------------
$10,000,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited
partnership, ("Borrower"), 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 December 31, 1998, the principal sum of Ten Million Dollars
($10,000,000.00), or so much thereof as may be advanced by Lender pursuant to
the Loan Agreement of even date herewith between Borrower, Norwest Bank Denver,
National Association, individually and as agent, and First American National
Bank (the "Loan Agreement"), together with interest on the outstanding unpaid
------
principal balance at the Adjusted Prime Rate 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. All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Loan Agreement.
As of December 31, 1994, the aggregate unpaid principal amount
outstanding under this Note shall be repaid to Lender in sixteen equal quarterly
installments, commencing March 31, 1993, 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 December 31, 1998.
Interest shall accrue daily, shall be payable on the last day of
each calendar quarter, commencing December 31, 1992 and at the maturity of this
Note, and shall be calculated on the basis of a 365 or 366-day year, as
appropriate. 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.
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, as set forth on
Schedule I hereto; 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.
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
-2-
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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray,
Vice President
-3-
Schedule I
----------
Principal Outstanding
Amount Amount of Principal
Date of Advance Payment Balance
---- ---------- ------- -------
A-1
TERM NOTE
---------
$6,750,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), 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
Denver, National Association, a national banking association ("Lender"), on or
before December 31, 1998, the principal sum of Six Million Seven Hundred Fifty
Thousand Dollars ($6,750,000.00), together with interest on the outstanding
unpaid principal balance at the Adjusted Prime Rate as provided in the Loan
Agreement of even date herewith between Borrower, Norwest Bank Denver, National
Association, individually and as agent, and First American National Bank (the
"Loan Agreement").
-----
This Note is one of the notes referred to in the Loan Agreement
as the Term Notes, and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Loan Agreement.
The outstanding principal amount of this Note shall be payable as
provided in the Loan Agreement, in twenty-four equal quarterly installments due
on the last day of each calendar quarter, commencing March 31, 1993, as more
fully described in the Loan Agreement. The entire outstanding principal balance
of this Note shall be due and payable on or before December 31, 1998 (unless
payable sooner pursuant to the terms of the Loan Agreement), together with
accrued and unpaid interest thereon.
Interest shall accrue daily, shall be payable on the last day of
each calendar quarter, commencing December 31, 1992 and at the maturity of this
Note, and shall be calculated on the basis of a 365 or 366-day year, as
appropriate. 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.
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 the advances hereunder and all
payments made on this Note until Lender has been repaid in full, as set forth on
Schedule I hereto; 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.
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
-2-
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 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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray,
Vice President
-3-
Schedule I
----------
Principal Outstanding
Amount Amount of Principal
Date of Term Loan Payment Balance
---- ------------ ------- -------
A-1
TERM NOTE
$6,750,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), 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 December
31, 1998, the principal sum of Six Million Seven Hundred Fifty Thousand Dollars
($6,750,000.00), together with interest on the outstanding unpaid principal
balance at the Adjusted Prime Rate as provided in the Loan Agreement of even
date herewith between Borrower, Norwest Bank Denver, National Association,
individually and as agent, and First American National Bank (the "Loan
----
Agreement").
This Note is one of the notes referred to in the Loan Agreement
as the Term Notes, and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Loan Agreement.
The outstanding principal amount of this Note shall be payable as
provided in the Loan Agreement, in twenty-four equal quarterly installments due
on the last day of each calendar quarter, commencing March 31, 1993, as more
fully described in the Loan Agreement. The entire outstanding principal balance
of this Note shall be due and payable on or before December 31, 1998 (unless
payable sooner pursuant to the terms of the Loan Agreement), together with
accrued and unpaid interest thereon.
Interest shall accrue daily, shall be payable on the last day of
each calendar quarter, commencing December 31, 1992 and at the maturity of this
Note, and shall be calculated on the basis of a 365 or 366-day year, as
appropriate. 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.
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 the advances hereunder and all
payments made on this Note until Lender has been repaid in full, as set forth on
Schedule I hereto; 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.
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
-2-
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 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 PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray,
Vice President
-3-
Schedule I
----------
Principal Outstanding
Amount Amount of Principal
Date of Term Loan Payment Balance
---- ------------ ------- -------
A-1
WORKING CAPITAL NOTE
--------------------
$2,500,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), 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
Denver, National Association, a national banking association ("Lender"), on or
before December 31, 1994, the principal sum of Two Million Five Hundred Thousand
Dollars ($2,500,000.00), or so much thereof as may be advanced by Lender
pursuant to the Working Capital Loan Agreement of even date herewith between
Borrower, Norwest Bank Denver, National Association, individually and as agent,
and First American National Bank (the "Loan Agreement"), together with interest
on the outstanding unpaid principal balance at the Adjusted Prime Rate as
provided in the Loan Agreement.
This Note is one of the notes referred to in the Loan Agreement as the
Working Capital Notes and is issued pursuant to, and is subject to the terms and
provisions of, the Loan Agreement. All capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Loan Agreement.
The entire outstanding principal balance of this Note shall be due on
or before December 31, 1994 (unless payable sooner pursuant to the terms of the
Loan Agreement), together with accrued and unpaid interest thereon. Interest
shall accrue daily, shall be payable on the last day of each calendar quarter,
commencing December 31, 1992, and at the maturity of this Note, and shall be
calculated on the basis of a 365 or 366-day year, as appropriate. 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.
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 advances hereunder and all payments
made on this Note until Lender has been repaid in full, as set forth on Schedule
I hereto; 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.
Lender shall maintain a record of all advances hereunder and payments
made on this Note and letters of credit issued under this Note until Lender has
been repaid in full, as set forth on Schedule I hereto; 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.
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
-2-
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.
-3-
THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED' ACCORDING TO THE LAWS OF
THE STATE OF COLORADO.
MARKWEST HYDROCARBON PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray,
Vice President
-4-
Schedule I
----------
Principal Outstanding
Amount Principal
of Advance Balance
(plus draws (including draws
under Letters Amount of under letters
Date of Credit) Payment of Credit)
---- ---------- ------- ----------
A-1
WORKING CAPITAL NOTE
--------------------
$2,500,000.00 Denver, Colorado
November 20, 1992
MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado limited partnership,
("Borrower"), 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 December
31, 1994, the principal sum of Two Million Five Hundred Thousand Dollars
($2,500,000.00), or so much thereof as may be advanced by Lender pursuant to the
Working Capital Loan Agreement of even date herewith between Borrower, Norwest
Bank Denver, National Association, individually and as agent, and First American
National Bank (the "Loan Agreement"), together with interest on the outstanding
unpaid principal balance at the Adjusted Prime Rate as provided in the Loan
Agreement.
This Note is one of the notes referred to in the Loan Agreement
as the Working Capital Notes and is issued pursuant to, and is subject to the
terms and provisions of, the Loan Agreement. All capitalized terms used herein
but not otherwise defined shall have the meanings set forth in the Loan
Agreement.
The entire outstanding principal balance of this Note shall be
due on or before December 31, 1994 (unless payable sooner pursuant to the terms
of the Loan Agreement), together with accrued and unpaid interest thereon.
Interest shall accrue daily, shall be payable on the last day of each calendar
quarter, commencing December 31, 1992, and at the maturity of this Note, and
shall be calculated on the basis of a 365 or 366-day year, as appropriate. 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.
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 advances hereunder and all payments
made on this Note until Lender has been repaid in full, as set forth on Schedule
I hereto; 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.
Lender shall maintain a record of all advances hereunder and payments
made on this Note and letters of credit issued under this Note until Lender has
been repaid in full, as set forth on Schedule I hereto; 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.
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
-2-
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.
-3-
THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF
THE STATE OF COLORADO.
MARKWEST HYDROCARBON PARTNERS, LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray,
Vice President
--4--
Schedule I
----------
Principal Outstanding
Amount Principal
of Advance Balance
(plus draws (including draws
under letters Amount of under Letters
Date of Credit) Payment of Credit)
---- ---------- ------- ----------
A-1
WORKING CAPITAL
LOAN AGREEMENT
Among
MARKWEST HYDROCARBON PARTNERS, LTD.
and
NORWEST BANK DENVER, NATIONAL ASSOCIATION,
individually and as Agent,
and
FIRST AMERICAN NATIONAL BANK
November 20, 1992
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TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS 1
SECTION 2. THE WORKING CAPITAL LOAN 13
(a) Terms of the Working Capital Loan 13
(b) Borrowing Procedures 13
(c) The Loan Date 14
(d) Computation and Payment of Interest; Late Payment Rate 14
(e) Payments by Borrower 14
(f) Payments to Lenders 15
(g) Optional Payments 15
(h) Mandatory Payments. 15
(i) Fees 16
(j) Adjustments 16
(k) Increased Capital 17
SECTION 3. LETTERS OF CREDIT 17
(a) Issuance of Standby Letters of Credit 17
(b) Payments Treated as an Advance 18
(c) Restriction on Liability 18
(d) No Duty to Inquire 19
(e) Reimbursement by Lenders 20
SECTION 4. CONDITIONS OF LENDING 20
(a) Initial Advance 20
(b) Subsequent Advances 23
SECTION 5. BORROWING BASE 24
(a) Initial Borrowing Base 24
(b) Information 24
(c) Subsequent Determinations of Borrowing Base 24
SECTION 6. BORROWING BASE DEFICIENCY 26
(a) Add Additional Collateral 26
(b) Repay Excess Debt 26
SECTION 7. SECURITY 26
SECTION 8. REPRESENTATIONS AND WARRANTIES 27
(a) Existence 27
(b) Non-Contravention 27
(c) Third Party Authorization 28
(d) Authorization; Binding Effect 28
(e) Litigation 28
(f) Taxes 28
(g) Liens 29
(h) Names and Places of Business 29
(i) Use of Proceeds 29
(j) Other Obligations 29
(k) Full Disclosure 29
(l) Margin Stock 30
(m) ERISA 30
(n) Security Documents 30
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(o) Compliance with Laws 30
(p) Financial Condition 31
(q) Environmental Matters 31
(r) Investment Company Act 31
(s) Public Utility Holding Company Act 31
(t) Title to Properties; First Priority Security Interest 31
(u) Partners, Shareholders and Subsidiaries of Borrower and of Related Persons 32
(v) Location of Inventory 32
(w) Eligibility of Items Included in Borrowing Base 32
SECTION 9. AFFIRMATIVE COVENANTS 32
(a) Payment and Performance of Working Capital Loan 32
(b) Financial Statements 32
(c) Preservation of Existence, Etc. 34
(d) Maintenance of Property 34
(e) Payment of Other Obligations 34
(f) Insurance 35
(g) Inspection of Property, Books and Records;
Confidentiality Agreement 36
(h) Notices 37
(i) Compliance with Laws 38
(j) Further Assurances 38
(k) Current Ratio 39
(l) Funded Debt to Total Capitalization 39
(m) Tangible Net Worth 39
(n) Fixed Charge Coverage Ratio 39
(o) Environmental Matters 39
SECTION 10. NEGATIVE COVENANTS 39
(a) Debt 40
(b) Liens 40
(c) Guaranty Obligations 41
(d) Loans and Advances 41
(e) Limitation on Investments and New Businesses 42
(f) Mergers and Consolidations 42
(g) Location of Inventory 43
(h) Burdensome Undertakings 43
(i) Change in Location of Business 43
(j) Restricted Distributions 43
(k) Disposition of Assets 44
(l) ERISA 44
(m) Use of Proceeds 44
(n) Transactions with Affiliates 45
(o) Contracts; Take-or-Pay Agreements 45
(p) Amendments to Organizational Documents 45
(q) Amendments to RIMCO Loan Documents 46
SECTION 11. EVENTS OF DEFAULT 46
(a) Non-Payment 46
(b) Certain Default 46
(c) Other Defaults 46
(d) Representation or Warranty 46
(e) Security Documents and Covenant Agreements 46
(f) Judgments 47
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(g) Insolvency 47
(h) Bankruptcy, Etc. 47
(i) Cross-Default 48
(j) ERISA 48
(k) Loan Documents 48
(l) Material Adverse Change 48
(m) Partners of Borrower 49
(n) Ownership of the General Partner 49
(o) Failure to be a Partnership 49
(p) Columbia Contracts 49
(q) Regulatory Change 49
SECTION 12. REMEDIES 49
(a) Automatic Acceleration of Loan 49
(b) Optional Acceleration of Loan 49
(c) Setoff 50
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 54
(i) Successor Agent 54
(j) Borrower Entitled to Rely on Agent 54
SECTION 14. MISCELLANEOUS 54
(a) No Waiver; Cumulative Remedies 54
(b) Notices 55
(c) Counterpart Execution 56
(d) Governing Law; Entire Agreement 56
(e) Amendments and Waivers 56
(f) Costs, Expenses and Indemnity 56
(g) Inconsistent Provisions; Severability 58
(h) Incorporation of Exhibits and Schedules 58
(i) Amendment of Defined Instruments 58
(j) References and Titles 59
(k) Calculations and Determinations 59
(l) Usury 59
(m) Waiver of Right to Trial by Jury 59
(n) Successors and Assigns 60
(o) Term of Agreement 60
(p) Jurisdiction 60
LIST OF EXHIBITS
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Exhibit Title
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A Form of Working Capital Note
B Credit and Collection Policy of Borrower
C Request for Advance
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D Covenant Agreement
E Borrower's Counsel Opinion
F Local Counsel Opinion
G Borrowing Base Certification
H Litigation
I Limited Partners of Borrower and Shareholders of the General Partner
J Location of Borrower's Products and Inventory
K Compliance Certificate
L Loans and Advances to Officers and Employees
M Letter of Credit Application Form
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WORKING CAPITAL LOAN AGREEMENT
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THIS WORKING CAPITAL LOAN AGREEMENT (this "Agreement"), dated as of
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November 20, 1992, is among MARKWEST HYDROCARBON PARTNERS, LTD., a Colorado
limited partnership, ("Borrower") with an address of 5613 DTC Parkway, Suite
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400, Englewood, Colorado 80111, NORWEST BANK DENVER, NATIONAL ASSOCIATION, a
national banking association ("Norwest"), with an address of 1740 Broadway,
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Denver, Colorado 80274-8699, FIRST AMERICAN NATIONAL BANK, a national banking
association ("First American"), with an address of 4894 Poplar Ave., Memphis,
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Tennessee 38117, (Norwest and First American are referred to individually as a
"Lender" and collectively as the "Lenders"), and NORWEST, AS AGENT FOR THE BANKS
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(in such 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 #. DEFINITIONS. As used herein, each of the following
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capitalized terms shall have the meaning given it in this Section 1:
"Adjusted Prime Rate" shall mean an annual rate which equals the
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sum of the floating commercial loan rate of the Agent announced from time to
time as its prime rate but which may not be the lowest or best rate charged by
the Agent to any customer (the "Prime Rate") plus one percentage point per year,
adjusted in each case as of the banking day in which a change in the Prime Rate
occurs.
"Advances" shall have the meaning given it in Section 2(a).
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"Affiliate" shall mean as to any Person, each other Person which,
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directly or indirectly (through one or more intermediaries or otherwise), is in
control of, is controlled by, or is under common control with, such Person.
"Borrowing Base" shall mean, at the particular time in question,
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either the 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 event shall the Borrowing Base exceed $5,000,000.
"Borrowing Base Certification" shall have the meaning set forth
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in Section 5(b).
"Borrowing Base Deficiency" shall have the meaning set forth in
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Section 6. "Business Day" shall mean a day other than Saturdays or Sundays on
which commercial banks are open for business with the public in Denver, Colorado
and Memphis, Tennessee .
"Cash Collateral" means Cash Collateral Instruments pledged by
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Borrower to the Agent on behalf of the Lenders in which the Agent has a
perfected, first priority security interest, together with any funds on deposit
in, or otherwise to the credit of, any deposit account of Borrower with the
Agent, to the extent such deposit account is pledged as collateral to the Agent
on behalf of the Lenders.
"Cash Collateral Instruments" means, collectively, (a) open
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market commercial paper maturing within 120 days after acquisition therof, which
has the highest credit rating of either Standard & Poor's Corporation or Moody's
Investors Service, Inc., (b) certificates of deposit maturing within six (6)
months from the date thereof issued by the Agent, (c) direct obligations of the
United States Government or any agency thereof maturing within one hundred
eighty (180) days after the acquisition thereof, and (d) other instruments that
have been previously approved by the Lenders in writing for inclusion as Cash
Collateral Instruments.
"Code" means the Internal Revenue Code of 1986, as amended,
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together with the regulations promulgated thereunder.
"Collateral" shall mean all tangible or intangible, real or
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personal property subject to any of the Security Agreements, including without
limitation, all right, title and interest of Borrower in and to its Receivables,
Products, inventory, Eligible
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Product Inventory, Exchange Balances, contract rights (including the Contracts),
general intangibles and Cash Collateral.
"Columbia Contracts" shall mean (a) the Natural Gas Liquids
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Purchase Agreement dated as of April 26, 1988 between Columbia Gas Transmission
Corporation and Borrower 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 Gas Transmission
Corporation and Borrower as amended January 28, 1991 (Boldman); and (c) the
Contract for Construction and Lease of Boldman Plant dated December 24, 1990
between Columbia Gas Transmission Corporation and Borrower, 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.
"Commitment" means the amount of the Borrowing Base at the time
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in question minus the aggregate face amount of all outstanding Letters of Credit
at the time in question; provided that in no event shall the Commitment exceed
$5,000,000 at any time from the date hereof until and including December 31,
1994.
"Commitment Period" shall mean the period from the date of this
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Agreement to and including December 31, 1994, or such earlier date on which the
Working Capital Notes become due and payable.
"Consolidated" refers to the consolidation of any Person, in
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accordance 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.
"Contract" means a contract or contractual arrangement, whether
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oral or written (or both), between Borrower and an Obligor evidencing a valid
and binding obligation of such Obligor to pay for Products purchased from, or
services rendered by, Borrower.
"Controlled Group" means the Borrower and all Persons under
common control 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.
"Covenant Agreements" shall mean a letter agreement in the form
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of Exhibit D attached hereto, one from each of the General Partner and John Fox.
"Credit and Collection Policy" means those credit and collection
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policies and practices of Borrower in effect on the date hereof relating to
Borrower's Receivables, except for modifications that would not impair the
collectability of any Eligible Receivable of Borrower or any Eligible Hidro Gas
Receivable, and modifications consented to by Agent. The Credit and Collection
Policy of Borrower is described in Exhibit B hereto.
"Current Ratio" shall mean the ratio of Borrower's current assets
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to current liabilities, both determined in accordance with GAAP.
"Debt" shall mean as to any Person, at a particular date, the sum
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(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 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.
"Delinquent Receivable" means a Receivable of Borrower:
(i) as to which any payment, or part thereof, remains
unpaid for 45 days from the original invoice date for
such payment; or
(ii) which, consistent with the Credit and Collection
Policy of Borrower, would otherwise be classified as
delinquent by Borrower.
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"Designated Obligor" means, at any time, all Obligors except
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Hidro Gas; provided, however, that any Obligor shall cease to be a Designated
Obligor with respect to receivables or Exchange Balances upon five (5) Business
Days' notice thereof by Agent to Borrower, which notice shall set forth the
reason for such cessation.
"Determination Date" has the meaning given it in Section
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5(c)(ii).
"Eligible Exchange Balances" means an Exchange Balance which:
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(i) arises under a Products Agreement;
(ii) arises with a customer located in the United States
and relates to refined petroleum products in good and salable
condition located in the United States;
(iii) is not in dispute in any material respect;
(iv) is not owed by an Obligor who is generally unable to
fulfill its obligations;
(v) with respect to which the likelihood of payment or
performance thereof is not impaired by virtue of three-party exchange
or circumstances whereby the Obligor might satisfy its obligations by
means of satisfying an obligation of Borrower to a third party;
(vi) the Obligor of which is a Designated Obligor; and
(vii) has been previously approved in writing by the
Lenders for inclusion in Eligible Exchange Balances.
"Eligible Hidro Gas Receivables" shall mean at any time those
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Receivables of Borrower for which Hidro Gas is the Obligor and which otherwise
satisfy the provisions of paragraphs (iii) through (x) of the definition of
Eligible Receivable; provided, however, that the amount of such Receivables to
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be included in determining the Borrowing Base hereunder shall never exceed the
amount of all outstanding letters of credit that have been issued in support of
such Receivables, which letters of credit shall each be in form and substance
satisfactory to Agent and shall have been issued or confirmed by a United States
bank (state or national bank) acceptable to the Lenders, and which letter of
credit shall have been assigned to the Agent as additional collateral under the
Security Agreement, if so requested by the Agent.
"Eligible Product Inventory" means any Products:
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(i) to which Borrower has title and which are stored in
Borrower owned facilities or facilities for which Borrower has
contracted for storage, whether by lease or otherwise, and such
contract is subject to a perfected, first priority lien in favor of
Agent on behalf of the Lenders;
(ii) in which the Agent on behalf of the Lenders has a
perfected, first priority security interest; and
(iii) as to which Borrower has furnished to Agent
reasonably detailed information in a Borrowing Base Certification;
reduced by all charges of all kinds against such Products, and transportation,
processing and other handling charges for such Products.
"Eligible Product Inventory Value" means as of any Determination
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Date an amount equal to the market value of the Products comprising the Eligible
Product Inventory. The market value of the Products comprising the Eligible
Product Inventory for any Determination Date shall be the price determined by
reference to a published index, such price to be adjusted for transportation,
and market differential; which determination, including the index and the
adjustments, must be acceptable to Lenders. Oil Price Information Service is
acceptable to all parties hereto.
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"Eligible Receivable" means a Receivable of Borrower:
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(i) the Obligor of which is a United States resident, is
not an Affiliate of any of the parties to this Agreement, and is not a
government or a governmental subdivision or agency;
(ii) the Obligor of which is a Designated Obligor;
(iii) the Obligor of which is not the Obligor of any
Delinquent Receivables;
(iv) which is not a Delinquent Receivable;
(v) the Products for which such Receivable represents
the right to payment have been delivered to the purchaser thereof;
(vi) in which Lender has a perfected, first priority
security interest prior to all other Liens;
(vii) which is denominated and payable only in United
States dollars in the United States;
(viii) which arises under a Contract which has been duly
authorized and which, together with the Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of
the Obligor of such receivable enforceable in accordance with its
terms and is not subject to any dispute, offset, counterclaim or
defense whatsoever;
(ix) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation, laws,
rules and regulations relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party
to the Contract related thereto is in violation of any such law, rule
or regulation in any material respect;
(x) which satisfies all applicable requirements of the
Credit and Collection Policy; and
(xi) as to which the Agent has not notified Borrower that
the Lenders have determined, in their sole discretion, that such Receivable
(or class of Receivables) is not acceptable collateral.
"Employee Option Agreement" shall mean the Option Plan of
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MarkWest Hydrocarbon Partners, Ltd. dated April 6, 1992 (without regard to any
future amendments, modifications or changes thereto without the Required Lenders
prior consent).
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as 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
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Section 302 of 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).
"Event of Default" shall have the meaning set forth in Section
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11.
"Exchange Balance" means a right of Borrower to the delivery of
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refined petroleum products created as a result of a Products Agreement between
Borrower and a customer.
"First American Loan" shall mean the loan to Borrower pursuant to
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a Loan Agreement dated June 19, 1992 in the principal amount not to exceed
$3,500,000 and secured by an Arkansas Leasehold Deed of Trust with Security
Agreement and Assignment of Rents and Leases dated June 19, 1992.
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"Fiscal Quarter" shall mean a three-month period ending on the
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last day of each March, June, September and December of any year.
"Fiscal Year" shall mean a twelve-month period ending on December
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31 of any year.
"Fixed Charge Coverage Ratio" shall mean for any period, the
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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) and the principal portion of Debt required to be
repaid during such period.
"Florida Mesa Project" shall mean the project in which the
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Borrower has invested, whose purpose is the drilling, production, and gathering
of coal bed methane gas located in La Plata County, Colorado.
"Funded Debt" shall mean the aggregate amount of Debt for
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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 this Working Capital Loan.
"GAAP" shall mean generally accepted accounting principles and
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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.
"General Partner" means MarkWest Hydrocarbon, Inc., a Colorado
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corporation.
"Hidro Gas" shall mean Hidro Gas Juarez S.A. DE C.V., a
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corporation formed under the laws of Mexico, or its affiliate, Texas Gas and
Oil, Ltd., a corporation formed under the laws of the Bahamas.
"Initial Financial Statements" shall mean the audited financial
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statements of Borrower for the Fiscal Year ending December 31, 1991, and the
unaudited quarterly financial statements (consisting of a current balance sheet
and profit and loss statement) for Borrower as of September 30, 1992.
"Issuer" shall mean Norwest, in its capacity as the issuer of
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Letters of Credit hereunder, and its successors in such capacity.
"Late Payment Rate" shall have the meaning set forth in Section
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2(d)(ii).
"Letter of Credit" shall mean any standby letter of credit issued
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by the Issuer pursuant to Section 3, and all letters of credit so issued shall
be collectively referred to as the "Letters of Credit."
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"Letter of Credit Balance" shall mean the Lenders' maximum
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aggregate liability under all Letters of Credit outstanding at the time in
question.
"Loan Date" shall have the meaning set forth in Section 2(c).
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"Loan Documents" means this Agreement, the Working Capital Notes,
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the Letters of Credit, the Security Documents, the Covenant Agreements 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 and First
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American, fifty percent.
"Mortgages" shall have the meaning set forth in the Revolver/Term
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Facility.
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"NationsBank Loan" shall mean the loan to Borrower pursuant to a
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Credit Agreement with NationsBank of Texas, N.A., formerly known as NCNB Texas
National Bank, dated April 16, 1990, as may have been amended prior to the date
hereof, in the principal amount of $7,000,000 and secured by a Security
Agreement dated as of April 16, 1990 by Borrower in favor of NationsBank of
Texas, N.A.
"Net Eligible Exchange Balance" means an amount as of any
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Determination Date determined as the difference between (i) the aggregate amount
presently due to Borrower under all Eligible Exchange Balances (such amount to
be determined by multiplying the quantities of Products due Borrower in
accordance with the terms of the Products Agreement giving rise to such Eligible
Exchange Balances times the then applicable Mt. Belvieu price for such Products;
provided that such amounts shall be included only to the extent they satisfy all
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applicable requirements of the Credit and Collection Policy), and (ii) the
aggregate amount owed by Borrower under all Eligible Exchange Balances (such
amount to be determined by multiplying the quantities of Products Borrower owes
to third parties in accordance with the terms of the Products Agreement giving
rise to such Eligible Exchange Balance times the then applicable Mt. Belvieu
price for such Products).
"Obligations" means all Debt from time to time owing by Borrower
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to the Lenders under or pursuant to any of the Loan Documents.
"Obligor" shall mean when used with respect to Receivables, a
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Person party to a Contract and obligated to make payments pursuant thereto and
when used with respect to Exchange Balances, the party obligated to Borrower
pursuant to a Products Agreement.
"Ordinary Course of Business" shall mean, in respect of any
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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, and, as applied to Borrower, shall include the
acquisition of natural gas reserves and investments or participation in the
Florida Mesa Project or other coal bed methane gas projects.
"Person" shall mean an individual, partnership, corporation,
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association, 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.
"Products" shall mean all oil, natural gas, unprocessed natural
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gas, natural gas liquids, gaseous or liquid hydrocarbons, processed natural gas,
butane, isobutane, propane, natural gasoline, gasoline, MTBE, other products
obtained from the processing of natural gas or fractionating or processing of
natural gas liquids, now or hereafter located in or on, transported through,
processed in or otherwise related to the Collateral subject to any of the
Mortgages including, without limitation, any and all of the same held as
inventory.
"Products Agreement" shall mean a standard written refined
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petroleum products reciprocal exchange agreement.
"Receivable" means the indebtedness of any Obligor under a
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Contract arising from a sale of Products by Borrower or from services rendered
by Borrower, and includes the right to payment of any interest or finance
charges and other obligations of such Obligor with respect thereto.
"Related Person" shall mean any of Borrower and each Subsidiary
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of Borrower.
"Request for Advance" shall mean a request for Advance meeting
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the requirements of Section 2(b) hereof.
"Required Lenders" shall mean at any time Lenders, the Loan
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Shares of which aggregate 100 percent.
"Responsible Person" shall mean any officer of the General
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Partner and any other Person employed by either a Related Person or the General
Partner and who should be aware of the terms of this Agreement.
"Revolver/Term Facility" shall mean the loan provided for
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pursuant to that certain Loan Agreement of even date herewith between Borrower,
the Lenders and the Agent, providing for (a) a six-year term loan, and (b)
a two-year revolving loan, the principal balance of which at the termination of
the revolving period shall be amortized over sixteen equal quarterly principal
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payments; which loans shall not exceed $20,000,000 in aggregate principal amount
outstanding at any one time and are secured by various "Security Documents" (as
such term is defined therein).
"RIMCO Loan" shall mean the loan to Borrower pursuant to the Note
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Agreement dated December 15, 1989 in principal amount up to $11,500,000, and
secured by a Mortgage and Security Agreement dated as of April 29, 1988, to
Rimco Partners, L.P., as modified by a First Modification and Amendment of
Mortgage and Security Agreement dated as of January 15, 1990 between Borrower
and Rimco Partners, L.P., as agent for itself and others, and by Second
Modification and Amendment of Mortgage and Security Agreement dated as of
October 1, 1990, between Borrower and RIMCO Partners, L.P., the Resigning Agent,
and Resource Investors Management Company Limited Partnership, the Successor
Agent.
"Security Agreements" shall mean one or more chattel mortgages,
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acts of collateral mortgage, security agreements and assignments of proceeds of
even date herewith, in favor of the Agent on behalf of the Lenders, covering all
or any part of the Collateral.
"Security Documents" means the Mortgages and Security Agreements
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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 Revolver/Term Facility.
"Subsidiary" means, with respect to any Person, any corporation,
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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 partners' equity of Borrower
------------------
less intangible assets.
"Total Capitalization" means the sum of Funded Debt plus
--------------------
partners' 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 Loan" or "Loan" shall mean the loan provided for
--------------------
in Section 2(a) hereof, together with each additional loan, if any, made to
Borrower by the Lenders, at the option of the Lenders, existing as well as
contemplated, excluding the Revolver/Term Facility.
"Working Capital Note" or "Note" shall mean a note substantially
------------------------------
in the form of Exhibit A attached hereto, made by Borrower and payable to the
order of Norwest or to First American, as appropriate, with appropriate
insertions as to date, together with any and all renewals, extensions,
amendments and changes of, or substitutions for said note; collectively, the
"Working Capital Notes" or "Notes."
--------------------------------
SECTION #. THE WORKING CAPITAL LOAN.
------------------------
(a) Terms of the Working Capital Loan.
---------------------------------
Subject to the terms and conditions of this Agreement, each Lender agrees to
make advances to Borrower (such advances are called the "Advances") from time to
time during the Commitment Period, in an aggregate principal amount not to
exceed its Loan Share of the Commitment. Advances under the Working Capital
Loan shall be evidenced by the Working Capital Notes. So long as an Event of
Default or an Unmatured Event of Default has not occurred, during the Commitment
Period Borrower may borrow, repay and reborrow under the Working Capital Notes
in accordance with Section 2(b) below. The entire outstanding principal balance
of, together with accrued interest on, the Working Capital Loan shall be due and
payable on December 31, 1994.
(b) Borrowing Procedures. (i) Each Request for Advance under
--------------------
the Working Capital Loan shall be in the form of Exhibit C attached hereto and
---------
shall be submitted to the Agent on or before 11:00 a.m. Denver, Colorado time on
the Business Day immediately preceding the day such Advance is requested to be
made. Upon receipt of a Request for Advance, the Agent shall promptly notify
each Lender thereof. Not later than 11:00 a.m. Denver time on the next Business
Day, each
-12-
Lender shall make available to the 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 the Lenders shall not be obligated to make any
-------- -------
Advance to Borrower that would result in the aggregate unpaid principal balance
outstanding under the Working Capital Notes exceeding the Commitment. If all
conditions precedent to such Advance have been met, Agent will on the date
requested make such Advance available to Borrower in immediately available funds
at Agent's office in Denver, Colorado.
(ii) Each Advance under the Working Capital Loan shall be
in an amount of at least $100,000 or such lesser amount equal to the
unadvanced portion of the Working Capital Loan. Each Advance shall be
evidenced by the Working Capital Notes.
(iii) All Advances requested by Borrower shall be made pro
rata by each Lender in proportion to such Lender's Loan Share.
(c) The Loan Date. The initial Advance under the Working
-------------
Capital Loan 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 4(a) below have been satisfied or waived by the Lenders.
(d) Computation and Payment of Interest; Late Payment Rate.
------------------------------------------------------
(i) Interest on the Working Capital Loan shall accrue
daily and shall be computed on the basis of a year of 365 or 366 days,
as appropriate. Interest on the Working Capital Loan shall be payable
in arrears on the last day of each Fiscal Quarter, beginning December
31, 1992.
(ii) 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 Adjusted Prime Rate (the "Late Payment
---- -------
Rate)", until paid, and shall be due and payable immediately.
----
(e) 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 and without set-off or counterclaim or deduction of any kind. If any
payment to be made by Borrower hereunder or under the Working Capital 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.
(f) Payments to Lenders. Each payment by Borrower to the Agent
-------------------
on account of principal of and interest on the Working Capital Loan 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 payment, the portion of the aggregate amount received by Agent
on such day multiplied by the Loan Share of such Lender.
(g) Optional Payments. During the Commitment Period, Borrower
-----------------
may make optional payments on the outstanding principal balance of the Working
Capital 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 interest on the principal
amount so paid. Borrower shall give the Agent one Business Day's notice in
advance of any optional payment on the Working Capital Loan.
(h) Mandatory Payments. If at any time, or from time to time, a
------------------
Borrowing Base Deficiency exists, Borrower shall, within three Business Days
after Agent on behalf of Lenders gives written notice of such fact to Borrower
pursuant to Section 6 hereof, make a mandatory prepayment to Agent for
distribution to Lenders in the principal amount of such Borrowing Base
Deficiency, together with all accrued and unpaid interest on, and fees related
to, the principal amount so prepaid, unless Borrower has satisfied the condition
set out in Section 6(a) hereof. Any such prepayment of principal under this
Section 2 shall be applied pro rata in accordance with each Lender's Loan Share
to the unpaid principal balance of the Working Capital Loan thereof until
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the Working Capital Loan is paid in full.
(i) Fees.
----
(i) During the Commitment Period, Borrower shall pay
to the Lenders an unused commitment fee on the average
daily difference between the Commitment and the
aggregate outstanding principal amount under the
Working Capital 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, 1992 (for the
period from the date hereof through December 31, 1992)
and ending on the last day of the Commitment Period.
(ii) Borrower shall pay to the Lenders on the Loan
Date a one-time commitment fee of $25,000 in the aggregate.
(iii) The fee for each Letter of Credit shall be an
amount equal to the greater of 1.25% per annum of the face amount of
such Letter of Credit, or $250. The Agent shall retain for its own
account annually the first $250.00 of the Letter of Credit fee for
each Letter of Credit, and shall promptly remit to each Lender pro
rata according to the Loan Share of such Lender, the Letter of Credit
fee actually received in excess of $250.00. The first year's fee shall
be payable by Borrower at the time a Letter of Credit is issued.
Subsequent annual fees shall be due and payable on the anniversary
date of the applicable Letter of Credit. Annual fees shall be prorated
for any period less than a year that any Letter of Credit remains
outstanding pursuant to the terms of such Letter of Credit other than
as the result of one or more draws thereunder.
(j) Adjustments. If any Lender (a "benefitted Lender") shall at
-----------
any time receive any payment of all or part of its Working Capital Loan, 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 Lender such portion of such other Lender's Working Capital Loan, or shall
provide such other Lender 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 Lender; 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 any
Lender so purchasing a portion of another Lender's Working Capital Loan 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.
(k) 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 Issuer or 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 Issuer or any Lender
or any corporation controlling Issuer or any Lender and Issuer or such Lender
determines that the amount of such capital is increased by or based upon the
existence of the Letters of Credit or similar contingent obligations or the
existence of the Revolver Commitment and other commitments of this type then,
upon demand by Issuer or such Lender, Borrower shall immediately pay to Issuer
or such Lender, from time to time as specified by Issuer or such Lender,
additional amounts sufficient to compensate Issuer or such Lender in light of
such circumstances, to the extent that Issuer or such Lender reasonably
determines such increase in capital to be allocable to the issuance or
maintenance of Letters of Credit or the Revolver Commitment. Issuer or such
Lender claiming compensation under this Section 2(k) shall provide Borrower with
a certificate setting forth in reasonable detail the amount payable to Issuer or
such Lender, the reason for the additional compensation and the calculation of
the additional compensation.
SECTION #. LETTERS OF CREDIT.
-----------------
(a) Issuance of Standby Letters of Credit. Each request of
-------------------------------------
Borrower for the issuance of a Letter of Credit hereunder shall be on the form
of the application for issuance of a Letter of Credit attached hereto as Exhibit
-------
M, properly completed, and shall be received by the Issuer at least three
-
Business Days prior to the date of proposed issuance. Upon receipt of an
application for the issuance of a Letter of Credit and upon meeting the
Conditions of Lending set forth in Section 4 hereof, the Issuer shall issue
standby Letters of Credit during the Commitment Period, and such Letters of
Credit shall be issued in such amounts and
-14-
under such circumstances as the Issuer deems appropriate consistent with its
existing policies. Notwithstanding anything to the contrary set forth herein,
the Issuer shall not be obligated to issue, extend or amend any Letter of Credit
such that the Letter of Credit (i) would result in an aggregate unpaid principal
balance outstanding under the Working Capital Notes (including, without
limitation, the face amount of any other Letters of Credit that are still in
effect) which exceeds the Commitment, or (ii) has an expiration date later than
the Commitment Period.
(b) Payments Treated as an Advance. Each payment by the Issuer
------------------------------
under any outstanding Letter of Credit shall be deemed to be an Advance bearing
interest at the Adjusted Prime Rate from the date of such payment, shall be
entitled to all of the benefits of the Security Documents and shall be subject
to all terms of this Agreement. Each Lender, upon receipt of a written advice of
any payment under a Letter of Credit, shall make available to the Agent for the
account of the Issuer, whether or not the conditions of lending set forth in
Section 4 have been complied with, an amount in immediately available funds
equal to its Loan Share of the amount of the drawing, whereupon the Lenders
shall each be deemed to have made an Advance. A written advice(s) setting forth
in reasonable detail the amounts owing under this Section 3, submitted by Issuer
to Borrower from time to time, shall be conclusive, absent manifest error, as to
the amounts thereof.
(c) Restriction on Liability. The beneficiary of each Letter of
------------------------
Credit shall be deemed the agent of Borrower (provided that this shall not
preclude Borrower from pursuing such rights and remedies it may have against
such beneficiary at law or under any other agreement) and none of the Issuer,
the Agent, either Lender or their respective correspondents shall be responsible
for:
(i) the use which may be made of any Letter of Credit or
for any actions or omissions of the beneficiary of any Letter of
Credit;
(ii) the existence or nonexistence of a default under any
instrument secured or supported by any Letter of Credit or any other
event which gives rise to a right to call upon any Letter of Credit;
(iii) the validity, sufficiency or genuineness of any
document delivered in connection with any Letter of Credit, even if
such document should in fact prove to be in any or all respects
invalid, fraudulent or forged;
(iv) except as specifically required by a Letter of Credit,
failure of any instrument to bear any reference or adequate reference
to any Letter of Credit, or failure of documents to accompany any
draft at negotiation, or failure of any person to note the amount of
any draft on the reverse of any Letter of Credit or to surrender or
take up any Letter of Credit; or
(v) errors, omissions, interruptions or delays in
transmission or delivery of any messages by mail, cable, telegraph,
wireless, or otherwise.
The Issuer, the Agent and the Lenders shall not be responsible for any act,
error, neglect or default, omissions, insolvency or failure in the business of
any of the correspondents of the Issuer, for any refusal by the Issuer or any of
its correspondents to pay or honor drafts drawn under any Letter of Credit
because of any applicable law, decree or edict, legal or illegal, of any
governmental agency now or hereafter in force, or for any matter beyond the
control of such Person. The happening of any one or more of the contingencies
referred to in the preceding clauses of this Section shall not affect, impair or
prevent the vesting of any of the rights or powers of the Issuer, the Agent and
the Lenders under this Agreement or the obligation of Borrower to make
reimbursements hereunder. In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, Borrower agrees that any action,
not contrary to the terms of any Letter of Credit, which is taken by Issuer in
issuing such Letter of Credit or by any correspondent of Issuer under or in
connection with such Letter of Credit shall be binding on Borrower and shall not
put Issuer or any of Issuer's correspondents under any resulting liability to
Borrower unless it is the result of such Person's gross negligence or willful
misconduct and Borrower makes a like agreement as to any inaction or omission on
the part of Issuer or any of its correspondents unless it is the result of such
Person's gross negligence or willful misconduct.
(d) No Duty to Inquire. Borrower agrees that Issuer is
------------------
authorized and instructed to accept and pay drafts under any Letter of Credit
without requiring, and without responsibility for, the determination as to the
existence of any event giving rise to said draft, either at the time of
acceptance of payment or thereafter, other than obtaining any documents
expressly required by the Letter of Credit. Borrower agrees that Issuer is under
no duty to ascertain or inquire as to the validity or accuracy of any such
-15-
document or the authority of the Person executing or delivering such document or
draft or making such a demand (whether by tested telex or otherwise). Borrower
agrees to hold the Issuer, the Agent and the Lenders harmless from and
indemnified against any liability or claim in connection with or arising out of
the foregoing provisions and the subject matter of this Section 3.
(e) Reimbursement by Lenders. Issuer irrevocably agrees to grant
------------------------
and hereby grants to each Lender, and, to induce Issuer to issue Letters of
Credit hereunder, each Lender irrevocably agrees to accept and purchase and
hereby accepts and purchases from Issuer, on the terms and conditions
hereinafter stated, for such Lender's own account and risk an undivided interest
equal to such Lender's Loan Share of Issuer's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by Issuer
thereunder.
SECTION #. CONDITIONS OF LENDING.
---------------------
(a) Initial Advance. (i) The Lenders shall have no obligation to
---------------
make the initial Advance under the Working Capital Loan 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 Working Capital Notes;
(C) Counterparts of the Security Documents, duly
executed and acknowledged by Borrower, together with the appropriate
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) Evidence satisfactory to the Agent that all
amounts outstanding under each of the First American Loan and the
NationsBank Loan are being simultaneously paid in full from the
proceeds of the Revolver/Term Facility, or, as to the NationsBank
Loan, from the proceeds hereof, by Borrower and all commitments of the
lenders thereunder have been terminated and released and the liens and
security interests securing such loans have been or simultaneously
herewith are being fully released or reconveyed;
(E) Results of UCC lien searches as to Borrower for
the Secretaries of State of Arizona, Arkansas, Colorado, Kansas,
Michigan, Texas and West Virginia and for the following counties:
Crittenden County, Arkansas; Boyd, Greenup and Pike Counties, Kentucky
and Wayne County, West Virginia, and for all other relevant filing
jurisdictions as to the Collateral;
(F) Evidence that the 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);
(G) The Covenant Agreements, executed by the parties
thereto;
(H) A duly executed and acknowledged subordination
agreement between Resource Investors Management Company Limited
Partnership and the Agent, in form and substance acceptable to the
Agent;
(I) A certificate, dated the Loan Date and executed on
behalf of Borrower by the president or a vice president of the General
Partner, stating the substance of Subsections 4(a)(ii)(A), (C) and
(D);
(J) A certificate, dated the Loan Date and executed on
behalf of Borrower by an appropriate party, which shall certify to the
correctness and completeness of the following exhibits attached
thereto: copies of any partnership authorization of Borrower
authorizing the execution of the Loan Documents and the consummation
of the transactions contemplated herein and therein; copies of the
limited partnership agreement of Borrower and all amendments thereto,
and the certificate of limited partnership of Borrower;
-16-
(K) A certificate, dated the Loan Date and executed by
the Secretary or assistant Secretary of the General Partner, which
shall contain the names and signature of the officers of the General
Partner authorized to execute the Loan Documents on behalf of the
Borrower, and which shall certify to the correctness and completeness
of the articles of incorporation and bylaws of the General Partner,
and the resolutions duly adopted by the Board of Directors of the
General Partner authorizing the execution of the Loan Documents and
the consummation of the transactions contemplated herein and therein;
(L) Certificates from the Colorado Secretary of State
as to the good standing of Borrower and of the General Partner; and
(M) 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 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 Working Capital
Loan shall be satisfactory to counsel to the Agent, and the Agent
shall have received on the Loan Date a favorable opinion addressed to
the Agent and the Lenders of (x) Barry Spector, Esq., counsel for
Borrower, substantially in the form set forth in Exhibit E, together
with the certificate provided for in such Exhibit, which opinion 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, and (y) Rex M. Terry, Esq. of Hardin,
Jesson, Dawson & Terry, local counsel for Arkansas; and P. Bruce
Leslie, Esq. of McBrayer, McGinnis, Leslie & Kirkland, local counsel
for Kentucky, substantially in the form of Exhibit F attached hereto;
(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, 1991, there has been no
material adverse change in the business, financial position or results
of operations of Borrower.
(b) Subsequent Advances.The obligation of the Lenders to make
-------------------
subsequent Advances under the Working Capital Loan as set forth in Section 2 and
issue Letters of Credit is subject to satisfaction of the conditions set forth
in such Section and the following conditions precedent:
(i) A certificate, dated the date of the requested
Advance or issuance of the Letter of Credit, and executed
on behalf of Borrower by the president or a vice
president of the General Partner, stating the substance
of Subsections 4(a)(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, 1991, there has been no material
adverse change in the
-17-
business, financial position or results of operations of Borrower;
(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.
SECTION #. BORROWING BASE.
--------------
(a) Initial Borrowing Base. During the period from the date
----------------------
hereof to the first Determination Date, the Borrowing Base shall be
$4,343,278.00.
(b) Information. Within 10 days of the end of each calendar
-----------
month, commencing November 10, 1992, Borrower shall submit to the Agent, a
"Borrowing Base Certification," which shall be substantially in the form of
----------------------------
Exhibit G hereto, incorporating the requested information as of the end of the
---------
month for the immediately preceding calendar month as to Borrower's Eligible
Receivables, Eligible Hidro Gas Receivables, Eligible Product Inventory Value,
Net Eligible Exchange Balances and Cash Collateral and such other information
requested by the Agent, all in form and substance acceptable to the Agent
relating to the Collateral, to be used by the Lenders in determining the
Borrowing Base.
(c) Subsequent Determinations of Borrowing Base. (i) Subject to
-------------------------------------------
the other provisions of this Section 5(c), the Borrowing Base shall be
designated on each Determination Date (as defined below) as the amount equal to
the sum of:
(A) eighty percent (80%) of the Eligible Receivables,
plus
(B) one hundred percent (100%) of the Eligible Hidro
Gas Receivables, plus
(C) eighty percent (80%) of the Eligible Products
Inventory Value, plus
(D) eighty percent (80%) of the Net Eligible Exchange
Balances, plus
(E) one hundred percent (100%) of the Cash Collateral
as set forth in the Borrowing Base Certification provided to Agent
pursuant to Section 5(b); provided that the aggregate of the Eligible
--------
Products Inventory Value and the Net Eligible Exchange Balances
included as components of the Borrowing Base shall never exceed
$3,000,000 of the Borrowing Base in any calendar month (except that
such $3,000,000 limit shall not apply in the months of August,
September and October of any Fiscal Year); and provided further that
-------- -------
if in any calendar month the Net Eligible Exchange Balances is a
negative amount, then such negative amount will be deducted from the
Eligible Products Inventory Value in determining the Borrowing Base
for such calendar month.
(ii) Lenders shall have five (5) days after the receipt of
a Borrowing Base Certification to dispute the
calculation of the Borrowing Base in such Borrowing Base
Certification. If either Lender disputes the calculation
it shall give Agent notice thereof within the five-day
period. If Agent has received notice from any Lender of
any dispute, it shall within the same five-day period
notify Borrower of such dispute and of the amount of the
Borrowing Base as recalculated by the Lenders. The
amount of the Borrowing Base as so recalculated by the
Lenders and set forth in such notice shall take effect
on the date specified therein which may not be earlier
than the date on which such notice is received by
Borrower and shall continue in effect until the next
Determination Date. Any such recalculation shall be made
by the Lenders in good faith based on the information in
such Borrowing Base Certification and any other
information available to the Lenders at the time in
question regarding the Eligible Receivables, Eligible
Hidro Gas Receivables, Eligible Product Inventory,
Eligible Product Inventory Value, Net Eligible Exchange
-18-
Balances and Cash Collateral.
The date on which the Borrowing Base is so designated either by Agent
or by operation of the Borrowing Base Certification if Agent does not
give timely notice objecting thereto, shall be called a "Determination
Date". A Determination Date may occur during the period between the
date on which a Request for Advance is submitted and the day on which
such Advance is to be made. Until the Borrowing Base has been
determined pursuant to this Section 5(c) for any period, the Borrowing
Base shall be the amount determined pursuant to this Section 5 for the
immediately preceding period.
(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.
SECTION #. BORROWING BASE DEFICIENCY. If the aggregate unpaid
-------------------------
principal amount outstanding under the Working Capital Notes plus the aggregate
face amount of all outstanding Letters of Credit 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) Add Additional Collateral. Within 3 Business Days following
-------------------------
receipt of such notice from the Agent, provide sufficient additional collateral
or security for the Working Capital Loan, in form and substance acceptable to
the Lenders in their sole discretion; or
(b) Repay Excess Debt. Within 3 Business Days following receipt
-----------------
of such notice from the Agent, make a mandatory prepayment on the Working
Capital Loan in accordance with Section 2(h) in an amount equal to the Borrowing
Base Deficiency.
Failure of Borrower to comply with this Section 6 shall be an immediate Event of
Default.
SECTION #. SECURITY. The repayment of the Working Capital Loan and
--------
the Working Capital Notes and all extensions and renewals thereof, and the
performance of all obligations of Borrower hereunder, shall be secured by the
Security Documents.
SECTION #. REPRESENTATIONS AND WARRANTIES. Borrower represents and
------------------------------
warrants to the Agent and each Lender that:
(a) Existence.
---------
(i) Borrower is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Colorado, and is qualified to do business in Arkansas, Kentucky, 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);
(ii) Each of 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
Related Person, its business, operations, assets, property, prospects
or condition (financial or otherwise);
(iii) Each Related Person 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 has all franchises, permits,
licenses and similar agreements
-19-
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, 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 is a party or
is subject or by which any Related Person 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.
(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 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 and the General Partner.
This Agreement and the Working Capital 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 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 H attached
---------- ---------
hereto, there are no actions, suits, proceedings or claims against any Related
Person or the General Partner 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 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 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 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 Security Agreements 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 pursuant to the First American Loan and the
NationsBank Loan both of which will be released simultaneously with the
execution of this Agreement.
(h) Names and Places of Business. No Related Person has been
----------------------------
known by, or used any other partnership, trade, or fictitious name. The chief
executive office and principal place of business of Borrower and the General
Partner 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 places
where Borrower keeps its books and records concerning the Collateral is at
Borrower's address set forth for notices 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 Working Capital Loan
---------------
shall be used solely for working capital purposes of Borrower, including
repayment in full of any outstanding loans or obligations under the NationsBank
Loan, and the issuance of standby Letters of Credit pursuant to the terms of
this Agreement. In no event shall funds from any Advance be used directly or
indirectly by any Person for personal, family, household or agricultural
purposes.
(j) Other Obligations. No Related Person 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
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Related 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 the
General Partner 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 the General Partner 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 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.
(o) Compliance with Laws. Each Related Person 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 Borrower's financial position at the date thereof and the results of
Borrower's operations and cash flows for the period thereof. Since December 31,
1991, there has been no material adverse change in the business, financial
position or results of operations of Borrower.
(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 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 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 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 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 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.
-21-
(t) Title to Properties; First Priority Security Interest. Each
-----------------------------------------------------
Related Person and the General Partner have 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. Upon filing and recording of the
Security Agreements and the related financing statements in the locations
specified in the opinions provided to the Lenders pursuant to Section
4(a)(ii)(B) hereof, the Agent, on behalf of the Lenders will have a perfected
first priority lien or security interest in all of the Collateral.
(u) Partners, Shareholders and Subsidiaries of Borrower and of
----------------------------------------------------------
Related Persons. The General Partner is the sole general partner of Borrower.
---------------
The identity of the limited partners of Borrower and their respective limited
partnership interests are set forth in Exhibit I hereto and the identity and
---------
percentage ownership interest of the shareholders of the General Partner are set
forth in Exhibit I. Borrower does not presently have any Subsidiaries or own any
---------
stock or equity interest in any corporation, partnership, joint venture or
association, except for Borrower's interests in the Florida Mesa Project and
except, after the date hereof, interests acquired as permitted by Section 10(e)
hereof.
(v) Location of Inventory. The location of all of Borrower's
---------------------
Products and inventory is set forth in Exhibit J hereto.
---------
(w) Eligibility of Items Included in Borrowing Base. Borrower
-----------------------------------------------
represents and covenants to and with the Agent and Lenders that each item
included in a Borrowing Base Certificate at any time and from time to time is
one of the following: an Eligible Receivable, an Eligible Hidro Gas Receivable,
Eligible Product Inventory, an Eligible Exchange Balance or Cash Collateral.
SECTION #. AFFIRMATIVE COVENANTS. Until payment in full of the
---------------------
Working Capital Loan 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 Working Capital Loan. Borrower
-----------------------------------------------
shall duly and punctually pay or cause to be paid in lawful money of the United
States, the principal and interest on the Working Capital Loan 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 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, 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);
(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;
(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 financial officer of the General
Partner of Borrower in the form of Exhibit K 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;
-22-
(iv) Within 120 calendar days after the end of each Fiscal
Year, annual unaudited Consolidated financial statements of the
General Partner, together with all notes thereto, prepared in
reasonable detail in accordance with GAAP applied on a basis
consistent with prior years; provided, however, that if the General
-------- -------
Partner has an audited financial statement prepared for any reason, at
any time, then such audited financial statement shall be promptly
furnished to the Agent together with any opinion obtained from its
independent certified public accountants relating thereto;
(v) As soon as available, and in any event within 10 days
after the end of each month, a Borrowing Base Certification as
provided in Section 5(b);
(vi) 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 the General
Partner may make to, or file with, the Securities and Exchange
Commission or any stock exchange; and
(vii) 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.
(c) Preservation of Existence, Etc. (i) Borrower shall maintain
-------------------------------
in full force and effect Borrower's existence as a limited partnership and its
good standing under the laws of the State of Colorado and its right to
transact business in the States of Arkansas, Kentucky, Texas and West
Virginia; and (ii) each Related Person 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 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. (i) Each Related Person 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 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 cancelled, 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
-23-
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 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, 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 Working Capital Loan or the Working
Capital 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 Working Capital Notes or in a foreclosure of any of the
Security Documents.
(h) Notices. Borrower shall give written notice to the Agent
-------
within 3 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 or any other Related Person;
(ii) Any Event of Default or Unmatured Event of Default;
(iii) The institution of any litigation or other proceeding
before any governmental body or official against any Related Person 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 or such Related Person,
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
-24-
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 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) 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 Working Capital Loan becomes 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 Working Capital Loan be in
compliance with all applicable state and federal laws, at its sole cost and
expense.
(k) Current Ratio. Borrower shall maintain a Current Ratio of
-------------
not less than 1.1 to 1.0.
(l) Funded Debt to Total Capitalization. Borrower's Funded Debt
-----------------------------------
shall not exceed 65% of its Total Capitalization.
(m) Tangible Net Worth. Borrower shall maintain a Tangible Net
------------------
Worth equal to or greater than the sum of $15,000,000 plus 25 percent of
consolidated net income determined in accordance with GAAP and earned by
Borrower after December 31, 1991 (but excluding any net losses).
(n) Fixed Charge Coverage Ratio. Borrower shall maintain a Fixed
---------------------------
Charge Coverage Ratio, determined as of the end of any Fiscal Quarter,
commencing with the Fiscal Quarter ending December 31, 1992, calculated on a
rolling four quarter basis, of not less than 1.5.
(o) Environmental Matters. No Related Person 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.
SECTION #. NEGATIVE COVENANTS. Until payment in full of the Working
------------------
Capital Loan and termination of all Commitments by the Lenders to make advances
hereunder, neither Borrower 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 Working Capital Loan and the Revolver/Term
Facility;
(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
-25-
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 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
options contracts does not exceed $1,000,000 in the aggregate at any
one time outstanding, and (B) recourse is limited to Borrower's or any
Related Person's position in futures contracts;
(v) Current accounts and charges, payable or accrued,
incurred in the ordinary course of Borrower's or any Related Person's
business; and
(vi) Debt under the RIMCO Loan in a maximum principal
amount not to exceed at any one time outstanding (A) $11,500,000 from
the date hereof through and including December 1, 1992, and (B)
$500,000 thereafter.
(b) Liens. Create, assume or permit to exist any mortgage,
-----
pledge, security interest, lien or other encumbrance upon any 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;
(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 (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 Energy Partners, Ltd. in
connection with the Florida Mesa Project so long as such guarantees do not
exceed $1,000,000 in the aggregate at any one time, and (ii) 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 in
Exhibit L.
(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 exploration and production, (iii) make any acquisitions of or
capital contributions to or other investments in any Person 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
-26-
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 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 either 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 receives
within 10 days after such merger or consolidation a certificate from the chief
financial officer or any Vice President of the General Partner 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 J 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. Make any dividends or
------------------------
distributions of assets or declare or pay any cash or liquidating distribution
or dividends or make any other distribution to any of its partners or
shareholders, other than the following:
(i) Whether or not an Event of Default or Unmatured Event
of Default has occurred or is continuing, Borrower may make
distributions to each of its partners in an amount equal to such
partner's estimated federal and state income tax liabilities (assuming
each partner is taxable at the maximum marginal income tax rates)
resulting from such partner's interest in Borrower. Such distribution
shall not occur earlier than 30 days prior to the date such payments
are due;
(ii) So long as a Borrowing Base Deficiency does not exist
and no Event of Default or Unmatured Event of Default has occurred,
Borrower may make distributions in an aggregate cumulative amount not
to exceed 75 percent of Borrower's net income, determined in
accordance with GAAP and computed on a cumulative basis for all
periods since December 31, 1991, taking into account allowable
distributions previously declared or made since December 31, 1991;
provided, however, that such distributions are allowable so long as
-------- -------
they would not cause Borrower to be in contravention of the financial
covenants contained in Sections 9(k), (l), (m) and (n); and
(iii) 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:
-27-
(i) sales, transfers, leases, exchanges or other
dispositions of assets by Borrower or any other Related Person in the
Ordinary Course of Business; and
(ii) sales, transfers, leases, exchanges or other
dispositions of assets by Borrower and the other Related Persons 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 Working Capital Loan
---------------
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 Related Person's business and that is upon fair and reasonable terms no
less favorable to such Related Person than would obtain in a comparable arm's-
length transaction with a Person not an Affiliate of such Related Person.
(o) Contracts; Take-or-Pay Agreements. Amend or modify 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.
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
--------------------------------------
partnership agreement of Borrower or any other organizational documents of any
Related Person.
(q) Amendments to RIMCO Loan Documents. Amend, modify or waive,
----------------------------------
or consent or acquiesce in the amendment, modification, or waiver of any term
or provision of any document evidencing or securing the RIMCO Loan, or any
other document executed in connection with the RIMCO Loan.
SECTION #. 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 Working Capital Notes, any fees or other
amounts payable hereunder or under the Working Capital Notes or any of the
Security
-28-
Documents within three Business Days after its due date, or (ii) comply with the
provisions of Section 6 within the 3-day period set forth therein.
(b) Certain Defaults. Failure by Borrower to perform or observe
----------------
any term, covenant, agreement, condition or provision contained in any of
Sections 9(b), (c)(ii), (g), (h), (k), (l), (m) or (n), or Sections 10(a)
through (q), 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 Working Capital 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 and Covenant Agreements.
-------------------------------------------
(i) Occurrence of any of the events of default defined in
any of the Security Documents or Covenant Agreements.
(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) Any of the Covenant Agreements shall cease to be in
full force and effect.
(iv) Failure of the General Partners or John Fox, as
applicable, to perform or observe any covenant, agreement, condition
or provision contained in its or his respective Covenant Agreement.
(v) 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 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 the General Partner 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.
(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 the General Partner (except for an involuntary petition
against any Related Person or the General Partner, 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 the General Partner 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 the General Partner by the Lenders or either of them,
including without limitation the Revolver/Term Facility, or by any third party,
including without limitation, the RIMCO Loan, 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.
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(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 Working Capital Notes,
--------------
any of the other Loan Documents or any of the Covenant Agreements 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).
(m) Partners of Borrower. The General Partner ceases to be the
--------------------
sole general partner of Borrower. Any change occurs in the identity or ownership
interests of any limited partner of Borrower owning at least a 10% interest at
such time, other than pursuant to the Employee Option Agreement or pursuant to
the RIMCO Loan documents.
(n) Ownership of the General Partner. John Fox and the members
--------------------------------
of his immediate family cease to own collectively at least seventy-five percent
(75%) of the issued and outstanding voting stock of General Partner.
(o) Failure to be a Partnership. Borrower is not treated as a
---------------------------
partnership for federal income tax purposes.
(p) Columbia Contracts. Any of the Columbia Contracts shall
------------------
cease to be in full force and effect for any reason, including, without
limitation, as the result of being rejected or disaffirmed by Columbia Gas
Transmission Corporation, a debtor in possession under federal bankruptcy
laws.
(q) 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 #. 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 Working Capital Loan shall
automatically terminate and the unpaid principal amount of the Working Capital
Loan and all interest and other amounts payable hereunder, under the Working
Capital 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
may, from time to time, do any or all of the following:
(i) Declare all or any part of the Working Capital Loan 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;
-30-
(iii) With respect to any and all contingent, unmatured or
unliquidated obligations of Borrower hereunder, including without
limitation any and all outstanding Letters of Credit, 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 Working Capital Notes, the Security Documents or any contract,
agreement or undertaking supplemental hereto and 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 Working Capital Loan 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 #. 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 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 Working
Capital 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 Working Capital 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 Working
Capital Note as the
-31-
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 Working Capital 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
Working Capital 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, 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 Working Capital Loan 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. 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 Working
Capital 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 Working Capital 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 Lender, as the case may be,
hereunder and under the other Loan Documents. With respect to Advances made by
it and any Working Capital 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 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 Working Capital 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
-32-
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) Borrower Entitled to Rely on Agent. Borrower shall be
----------------------------------
entitled to rely upon the Agent's written actions and representations.
SECTION #. 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 Working
Capital 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 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 Partners, Ltd.
5613 DTC Parkway, Suite 400
Englewood, Colorado 80111
Attention: Finance Department
Fax. No.: (303) 290-8769
If to the Lenders, to:
Norwest Bank Denver, National Association
1700 Broadway
Denver, Colorado 80274-0099
Attention: Energy and Minerals Group
Fax. No.: (303) 863-5196
First American National Bank
4894 Poplar Avenue
Memphis, TN 38117
Attention: National Accounts
Fax. No.: (901) 762-5665
If to the Agent, to:
-33-
Norwest Bank Denver, National Association
1700 Broadway
Denver, Colorado 80274-0099
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
-------------------------------
WORKING CAPITAL 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 Working Capital Notes, the Covenant Agreements 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.
(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 Working Capital Notes and the other Loan Documents, subject
-------
however to the terms of the letter agreement between Borrower and the Agent
-------
regarding the maximum legal fees to be charged by the Agent's counsel for the
preparation and execution of the Loan Documents to be delivered at closing, (ii)
the enforcement of this Agreement, the Working Capital 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
Security Agreements, the violation of or failure to comply with any statute,
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law, rule, regulation or order now existing or hereafter occurring, including
without limitation, "Environmental Laws" (as defined in the Security Agreements)
and statutes, laws, rules, regulations and orders relating to "Hazardous
Substances" (as defined in the Security Agreements). 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 14, 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 Security Agreements, 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 Working Capital Loan
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 Working Capital 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 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
Working Capital 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 TO 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.
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(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 Working Capital Note, 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.
EXECUTED to be effective as of the day and year first above written.
MARKWEST HYDROCARBON PARTNERS,
LTD.
By: MarkWest Hydrocarbon, Inc.
General Partner
By:
Patrick W. Murray,
Vice President
NORWEST BANK DENVER,
NATIONAL ASSOCIATION,
individually and as Agent
By: ____________________________
Mark Williamson,
Vice President
FIRST AMERICAN NATIONAL BANK
By: ____________________________
David C. May,
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Vice President
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Dates Referenced Herein and Documents Incorporated by Reference
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