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
EX-10.15 — Processing Agreement
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PROCESSING AGREEMENT
KENOVA PROCESSING PLANT
This PROCESSING AGREEMENT ("Agreement") made this 15th day of March 1995
between COLUMBIA GAS TRANSMISSION CORPORATION ("Columbia"), and MARKWEST
HYDROCARBON PARTNERS, LTD., ("Processor").
WHEREAS, Columbia desires to deliver natural gas to Processor at
Processor's Facilities for the purpose of extracting liquid hydrocarbons
therefrom, under the terms and conditions hereof; and
WHEREAS, Processor desires to receive natural gas at Processor's Facilities
from Columbia for the purpose of extracting liquid hydrocarbons therefrom, under
the terms and conditions hereof.
Columbia and Processor agree as set forth below:
ARTICLE I. EXTENT OF CONTRACT
1.1 Processor agrees to process at its sole risk and expense all natural
gas volumes made available by Columbia at Processor's Facilities described on
Exhibit 1, to be attached hereto and made a part hereof promptly following its
preparation, (herein referred to as Processor's Facilities) in order to deliver
to Columbia residue gas as specified in Article IV hereof. Columbia shall accept
delivery of all residue gas volumes meeting the specifications as set forth
herein in Article IV and to reimburse Processor for processing each million
British thermal units (MMBtu) of natural gas delivered to and processed by
Processor, as set forth herein in Article VI.
1.2 Columbia agrees to use reasonable, diligent efforts to avoid taking
any action not compelled by law or regulation which will reduce the volume of
natural gas being supplied to the Processor's Facilities, or reduce the recovery
of natural gas liquids at Processor's Facilities or divert elsewhere the streams
of natural gas that would otherwise flow through and be processed by Processor's
Facilities. Processor and Columbia agree that the streams of natural gas are
being shipped by Columbia for third party shippers for delivery to regulated and
unregulated distribution companies, producers and industries for service to the
public and Columbia's control of said natural gas streams to meet its public
service obligations at the lowest reasonable cost shall be paramount. Columbia
shall have the right to manage the streams of natural gas in the manner in which
Columbia, in its sole discretion, deems most appropriate to meet its public
service obligation at the lowest reasonable cost, without any liability to
Processor on account thereof. That right shall specifically include, but not be
limited to, the right to curtail, interrupt, or divert the natural gas streams
for such periods as Columbia, in its sole judgment, deems necessary. It is
provided, however, that should Columbia divert the natural gas streams,
otherwise deliverable to the Processor's Plant, to other extraction plants not
operated by Processor, the liquids extracted from those streams shall be made
available to Processor at those extraction plants, under the terms of this
Agreement.
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1.3 In addition to the foregoing and not by way of limitation, Columbia
agrees to use reasonable, diligent efforts to deliver or cause to be delivered
approximately 115 MMCfd of natural gas to Processor's Facilities. Processor
acknowledges and agrees that a portion of the natural gas delivered by Columbia
to Processor's Facilities will have already been processed at the Boldman
Processing Plant or have, at its point of delivery into Columbia's facilities, a
lower Btu than the average Btu of quantities at the outlet of Processor's
Facility, and in accordance with Section 25.3 of the General Terms and
Conditions of Columbia's FERC Gas Tariff, as currently in effect and as may be
amended, will not be charged for processing at Processor's Facilities. All other
natural gas delivered to Processor's Facilities will be charged for processing
and will hereinafter be referred to as "Billable Quantities". The average Btu at
the outlet of Processor's Facility shall be posted on Columbia's Electronic
Bulletin Board System and redetermined on an annual basis. The volume of gas and
the heating value will be calculated at 14.73 psi at 60 degrees Fahrenheit and
the gas will be assumed to be dry. Additionally, Columbia will use reasonable,
diligent efforts to divert previously processed gas (excluding gas processed at
the Boldman Plant) received by Columbia, including without limitation, processed
gas received at the Beaver Creek Compressor Station, away from Line P so that
such previously processed gas will not be delivered to Processor's Facilities.
Processor also acknowledges and agrees there will be events, including but not
limited to, maintenance, repair, replacement and outages on Line KA, which will
require previously processed gas to be delivered to Processor's Facilities;
provided, Columbia will use its reasonable, diligent efforts to minimize the
duration and frequency of those
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occurrences. Further, to the extent within Columbia's reasonable control,
Columbia will not reduce, or permit a reduction of the amount of the Billable
Quantities delivered to Processor.
ARTICLE II. TERM
2. This Agreement shall be effective upon the date Processor's Facilities
begin Unrestricted Service as defined in Article II Section 2.5(c) of the Design
and Construction Agreement between the parties hereto dated March 15, 1995 and
shall continue in full force through December 31, 2010 (the "Primary Term").
Thereafter, this Agreement shall continue for successive periods of two (2)
years each, subject to successful renegotiation of a processing fee, until
either party gives written notice of termination to the other party at least one
(1) year prior to the end of the Primary Term, or one year prior to the end of
each succeeding 2-year period.
ARTICLE III. INLET QUALITY
3. The inlet gas delivered to Processor by Columbia shall meet the
following specifications:
Minimum Heating Value: 1200 BTU/SCF (HHV/dry)/1/
Minimum Temperature: 90 degrees F/2/
1 Columbia will use best efforts to meet the specification but will not
incur additional costs or otherwise change its operations to the
detriment of Columbia or its customers.
2 In the event Processor requires a specified temperature, including the
90 degrees F referred to herein, unable to be maintained by Columbia's
existing equipment, Processor agrees to pay for any modification of
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Maximum Temperature: 110 degrees F/3/
Maximum Water Content: 25 pounds/MMSCF
Delivery Pressure Range
@ Plant Inlet: 315 psig to 360 psig/4/
Further, Processor will accept gas meeting Columbia's pipeline tariff
gas specifications for H2S and total sulfur. In the event Columbia delivers gas
with H2S and/or total sulfur which is in excess of Columbia's pipeline tariff
quality specification, then upon notice from Processor, Columbia will endeavor
to identify the source of the excess and take appropriate action to bring gas
back into quality specifications. Except for the above, the inlet gas delivered
to Processor by Columbia shall conform to the gas quality specifications of
Columbia's FERC Gas Tariff.
ARTICLE IV. RESIDUE QUALITY
4.1 As long as the inlet gas delivered by Columbia to Processor meets the
quality specifications in Article III herein, the residue gas delivered to
Columbia by Processor shall meet the following specifications:
Minimum heating value: 967 BTU/SCF (LHV/dry basis)
Maximum heating value: 1125 BTU/SCF (LHV/dry basis)
Columbia's existing equipment and normal operating procedures to meet
the requirement.
3 Unless ambient conditions cause a higher temperature.
4 Unless operating failures do not permit.
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Minimum temperature: 50 degrees F
Maximum temperature: 110 degrees F1
Maximum water content: 7 lbs/MMSCF of gas
Maximum allowable pressure drop
across the plant: 25 psig
1 Unless ambient conditions cause a higher temperature.
Processor will return residue gas to Columbia containing no more H2S and total
sulfur than Processor receives from Columbia at the inlet of the Processor's
Facilities. The residue gas shall meet, at a minimum, a -30 degrees F
cricondentherm (maximum hydrocarbon dew point). The residue gas returned shall
have Ninety-Nine and One-Half percent (99.5%) of liquid and solid particles
greater than three (3) microns removed at maximum flowing conditions and at all
times be commercially free from particulates or other solid or liquid matter
which might interfere with its merchantability or cause injury to or
interference with proper operation of the lines, regulators, meters and other
equipment of Columbia.
4.2 Failure to meet the quality specifications set forth in Articles III
and IV will be deemed a default under Article XIV of this Agreement.
ARTICLE V. OPERATION
5.1 Processor shall have the exclusive responsibility for the ownership,
operation and maintenance of Processor's Facilities.
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5.2 Processor shall process and dehydrate the natural gas stream made
available by Columbia to meet or exceed the residue gas quality specified in
Article IV herein except for a maximum of 30 calendar days per year, to be
mutually agreed upon by the parties hereto, necessary for turnaround time,
maintenance or repair time.
5.3 Except as herein stated, Processor is and shall forever be responsible
for all risk and all costs in connection with Processor's ownership, operation
and maintenance of Processor's Facilities. Such costs may include, but are not
limited to, personal property taxes, real property taxes assessed against
Processor's Facilities and other taxes attributable to Processor's facilities,
insurance, fees, permits and utilities.
5.4 Processor must immediately notify Columbia's Gas Control Department,
telephone (304) 357-2505 and the Area Manager, telephone (304) 691-5205, or such
other telephone number as may be provided by Columbia from time to time, of all
material processing interruptions. Processor and Columbia shall coordinate, on a
best efforts basis, necessary facility outages, including but not limited to,
annual plant turnarounds, pipeline replacements and compressor overhauls, so as
to minimize the disruption of each other's operations.
5.5 In conducting its activities hereunder, Processor shall (i) comply
with any and all applicable local, state and/or federal laws, regulations,
orders and agreements, including, but not limited to, those laws, regulations,
orders, and agreements directed at protecting the environment, (ii) obtain, from
the governmental authorities having jurisdiction over the premises, such permits
and
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approvals as may be required to lawfully conduct Processor's activities,
including, without limitation, all permits and approvals required under local,
state and/or federal environmental laws and regulations, and (iii) timely
provide the governmental authorities having jurisdiction over the premises with
all notifications required under applicable local, state and/or federal laws,
regulations, orders and agreements.
5.6 Columbia shall allow Processor to utilize the electrical substation
located on Columbia's property, adjacent to Columbia's Kenova Compressor
Station, to purchase electric power from American Electric Power Company.
ARTICLE VI. PROCESSING FEE
6.1 For purposes of this Agreement the "Transitional Period" is defined
herein as the period commencing upon the start of Unrestricted Service as
defined in Article 2.5(c) of the Agreement to Design and Construct New
Facilities and continue until the effective date of any necessary abandonment
authorization to be granted by the FERC regarding Columbia's facilities and the
service provided thereby at the Kenova Plant. During the Transitional Period,
Processor agrees to initiate the service of processing Columbia's shippers' gas
for either: 1) a processing fee applicable to all Billable Quantities of
10.35c/Dth and fuel retainage at the rate provided for in Columbia's FERC Gas
Tariff, currently 0.67%, which amount would be billed to Columbia and paid to
Processor, or 2) under arrangements to be agreed upon separately by and between
Processor and Columbia's shippers. During the Transitional Period, Columbia will
bill shippers at its FERC approved processing fee plus fuel retainage for all
Billable
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Quantities. All amounts due from Columbia shall be payable in accordance with
Article IX. If Processor has negotiated an alternative arrangement with any or
all shippers prior to the end of the Transition Period, then upon notification
to Columbia by Processor of such alternative arrangement, Columbia will
discontinue Processing Fee billings to those affected shippers.
6.2 It is recognized that during the Transitional Period, Processor may
desire adjustments to its processing fee in order to reflect increases in costs.
Processor may request such changes after January l, 1997. Columbia will seek
approval of adjustments to the processing fee requested by Processor only in the
context of any general Section 4(e) Rate Case filings. In the event Columbia
determines that it will file a General Section 4(e) Rate Case, Columbia will
notify Processor of the impending filing and Processor may provide any
information it deems necessary to support any processing fee adjustments
requested by Processor. It is understood and agreed between Columbia and
Processor that in no event will Columbia file any Rate Case solely due to any
adjustment needed by Processor, and that the level of any adjustments and any
method of presentation remains the sole control of Columbia. In the event the
requested fee adjustment is approved by FERC, the fee paid by Columbia to
Processor shall be adjusted to reflect the FERC approved adjustment.
6.3 By the end of the Transitional Period, Processor will have negotiated
arrangements with all shippers transporting gas on Columbia upstream of
Processor's Facilities, or will have offered all shippers a "default contract"
and will no longer be paid by Columbia for processing. At the end of the
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Transitional Period, Processor will be paid by and look solely to Columbia's
shippers for payment for that shipper's Billable Quantities.
ARTICLE VII. MEASUREMENT
7.1 The following four natural gas streams shall be measured at Columbia
and Processor's facilities hereinafter collectively referred to as the Gas
Measurement Facilities: 1) the inlet natural gas stream measured at a point
downstream of Columbia's Kenova Plant bypass (Inlet Stream); 2) the residue gas
stream measured at a point upstream of Columbia's Kenova Plant bypass (Outlet
Stream); 3) plant fuel utilized in Processor's Facilities (Plant Fuel); and 4)
plant flare which may be required to be estimated because of safety reasons
(Plant Flare). The natural gas liquid product stream shall be measured at a
facility installed and operated as described in this Agreement and hereinafter
referred to as the Liquid Measurement Facility.
7.2 Columbia shall be responsible for providing the Inlet and Outlet
Streams Measurement. Processor shall be responsible for providing the Plant fuel
and Plant Flare Measurement. The Gas Measurement Facilities shall be designed
and constructed in accordance with industry standards and consistent with
Columbia standards. The Inlet and Outlet streams shall include equipment,
specified by Columbia for the accurate chromatographic analysis of those streams
and shall be tested monthly. The Liquid Measurement Facility shall be designed,
constructed and operated by Processor to standards established in the latest
edition of American Petroleum Institute's Manual of Petroleum Measurement
Standards. The Liquid Measurement Facility shall include equipment, reasonably
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specified by Columbia, for the accurate chromatographic analysis of the natural
gas liquids product stream. Columbia shall have the opportunity to review the
type of meters selected for Liquid Measurement, Plant Fuel and Plant Flare as
well as all associated instrumentation. Processor shall operate, maintain and
determine the accounting quantities measured by the Plant Fuel and Plant Flare.
To the extent measurement facilities are existing for these purposes, the
parties will utilize those facilities.
7.3 Columbia shall operate, maintain and determine the accounting
quantities measured by the Inlet an Outlet Streams. For the Gas Measurement
Facilities required herein, all measurement practices, calculations, testing and
rectification of errors shall be in accordance with Columbia's FERC Gas Tariff,
General Terms and Conditions, Section 26, effective November l, 1993 and as it
may be subsequently amended. For the Liquid Measurement Facility required
herein, all measurement practices, calculations, testing and rectification of
errors shall be in accordance with the Liquid Products Industry Standards.
Columbia reserves the right to be present at all regularly scheduled and
unscheduled inspections and tests of the Liquid, Plant Fuel and Plant Flare
measurement facilities. The Processor's regularly scheduled liquid and gas
measurement facility inspections shall be performed at most quarterly and less
frequently when agreeable to both Columbia and Processor. Columbia agrees to
allow the Processor to be present at all inspections and tests of the gas
measurement facilities. Both Columbia and the Processor agree to conduct the
joint tests and inspections concurrently.
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7.4 Electronic measurement direct data outputs on the Inlet and Outlet
Streams shall be provided for use by Processor in accordance with Columbia's
Standard Electronic Measurement Agreement, attached hereto and made a part
hereof as Attachment A. Processor will permit Columbia to install, at Columbia's
sole risk, cost and liability, electronic measurement equipment in order to
obtain signals from Liquid Measurement, Plant Fuel and Flare measurement
facilities and for the liquid chromatograph, provided that electronic
measurement equipment does not interfere with Processor's operations.
7.5 Processor and Columbia agree to accept the measurements from
Measurement Facilities, operated by each party respectively, utilized for the
measurement of the Inlet Stream as the basis for determination of the monthly
processing payment, and the Liquid Measurement Facility. Plant Fuel and Plant
Flare as the basis for determining shrinkage reimbursement, subject nonetheless
to estimation procedures and rectification of errors as provided for in
Paragraph 7.3 of this Article.
ARTICLE VIII. BTU REIMBURSEMENT
8.1 Processor shall make Columbia whole by reimbursing Columbia for the
Btu equivalent of all natural gas liquids removed by Processor from the natural
gas stream delivered to the Processor's Facilities by Columbia and the fuel
consumed and gas flared in operating Processor's Facilities. Reimbursement shall
consist of a quantity of Btus in the form of natural gas conforming to
Columbia's FERC Gas Tariff effective at the time of reimbursement delivery.
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For purposes of calculating Btu's received by Processor hereunder, each of
the natural gas liquid products shall be deemed to have a gross heating value as
reported in the latest edition of the Gas Processors Suppliers Association's
Engineering Data Book, as revised from time to time, or any other industry
standard which is mutually agreed upon by Columbia and Processor. The most
recent edition of the Gas Processors Suppliers Association's Engineering Data
Book reports the gross heating values of the natural gas liquid products as
follows:
GROSS HEATING VALUE OF NATURAL GAS LIQUIDS
------------------------------------------
[Download Table]
Product Btu Per Gallon
------- ---------------
Ethane 65,727
Propane 90,823
Iso-butane 98,913
Normal butane 102,909
Isopentane 108,754
Normal pentane 110,080
Hexanes + 115,064/5/
8.2 The Btu Reimbursement in the form of natural gas, as required in this
Article VIII, shall be made by Processor to Columbia at any or all of the
receipt points into Columbia Gas Transmission Corporation's pipeline system
located in the states of Ohio, West Virginia, Virginia, Maryland, Pennsylvania,
New Jersey, Delaware, North Carolina, New York and Kentucky. The receipt of
natural gas at any receipt point shall be subject to physical capability of
Columbia to receive said natural gas and shall not preclude Columbia from
ceasing to receive natural
5 After the plant is fully operational, the BTU per gallon of
hexanes and heavier components may be revised periodically, but
not more than twice in one year, based upon the results of
extended chromatographic analysis of the liquids stream, using
the same components that Columbia uses to determine the heating
content of the gas Columbia transports under its FERC Gas Tariff.
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gas from time to time at any receipt points due to temporary changes in facility
operations or relocations, or ceasing to receive natural gas at any receipt
points due to abandonments, either by sale or retirement, or other permanent
changes in physical capability of its pipeline facilities used to receive said
natural gas.
8.3 (a) Measurement of the gas delivered at the receipt points hereunder
shall be computed in accordance with Columbia's or a downstream pipeline
company's tariff, as applicable.
(b) It is recognized that, due to operating conditions, the Btus of liquid
products recovered by Processor and the Btus of natural gas delivered to
Columbia may not be in balance in any one particular calendar month. Given
Columbia's gas transportation obligations to its shippers, Processor is required
to maintain its Btu reimbursements within a ten percent (10%) tolerance each
calendar month. In the event Processor fails to maintain its Btu reimbursements
within the ten percent (10%) tolerance for greater than a thirty (30) day
period, Processor will be in default under this Agreement.
(c) Columbia will provide notice to Processor of the Btu Reimbursement
owed to Columbia 30 days prior to the date delivery is due. Should Processor
fail to deliver Btu Reimbursement consistent with the provisions of this Article
VIII, Processor shall be subject to the monthly imbalance provisions of
Columbia's approved FERC tariff in effect of the time of the imbalance.
(d) Processor shall exercise due diligence in keeping its Btu
reimbursements within the stated tolerance.
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8.4 Processor shall be responsible for obtaining all transportation
arrangements required to deliver the natural gas to the receipt points, and
shall be responsible for all transportation costs incurred in delivering the
natural gas to the receipt points.
8.5 Processor shall be deemed to be in control of and have responsibility
for the natural gas to be processed by Processor after the delivery thereof to
Processor by Columbia and prior to the delivery of such gas to Columbia by
Processor. Processor shall be deemed to have no responsibility with respect to
such gas prior to Processor's receipt thereof, or after Processor's delivery
thereof to Columbia.
ARTICLE IX. BILLING AND PAYMENT
9. On or before the lOth day of each month, Columbia will submit the
Inlet and Outlet Streams accounting quantities to Processor. On or before the
20th day of each month, Processor will submit a statement and invoice to
Columbia indicating all amounts and fuel reimbursement due under this Agreement
for the preceding month. Processor's statement shall include a comparison of the
inlet/outlet measurement heating values (DTH) minus the fuel and flare heating
values (DTH) versus the equivalent heating values (DTH) of the liquid removed.
In the event that a discrepancy exists in the comparison, the liquid and gas
measurement facilities of both parties shall be inspected to determine the cause
of the discrepancy. Both parties shall work together diligently to solve the
discrepancy in a manner mutually acceptable to both parties. Columbia shall
remit payment based on that invoice by the last business day of the month in
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which the invoice is received or 10 business days following receipt of the
invoice, whichever is later (Due Date). In the event Columbia does not submit
payment within 30 days of the Due Date, Columbia shall pay interest at the FERC
interest rate (18 CFR (S) 154.67) upon the unpaid balance until paid.
ARTICLE X. INSURANCE
l0.1 Processor, at all times while it has any interest in Processor's
Facilities and to the extent required by current operations and as agreed by
Columbia, shall provide, at its own cost and expense, insurance of the kinds and
in the amounts necessary to cover all loss or liability for damages on account
of bodily injury, including death resulting therefrom, and damage to or
destruction of property caused by or arising out of any and all operations
carried on or any and all work performed under this Agreement. At a minimum,
Processor shall provide insurance of the kinds and in the amounts specified in
the following schedule.
(a) Workers' Compensation: Coverage shall include the following:
----------------------
(i) Workers' Compensation - Statutory coverage applicable in
each State where work is to be performed, including coverage
for occupational disease, if and as required.
(ii) Employer's Liability minimum limit of $1,000,000 per
occurrence. If coverage is obtained from a state fund (Ohio
or West Virginia), Employer's Liability coverage may not be
available. In such cases, Processor will purchase "Stop
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Gap" coverage, with minimum limits of $1,000,000 per
occurrence, from a commercial insurer.
(iii) All States Endorsement (or equivalent). If coverage is
obtained from a state fund (Ohio or West Virginia) an All
States endorsement may not be available. In such cases,
Processor will obtain Workers' Compensation insurance in
every state in which operations may be conducted or work may
be performed under the terms of this Agreement.
(iv) U. S. Longshore and Harbor Workers' Compensation Act
coverage, U. S. Defense Bases Act Coverage, Outer
Continental Shelf Land Act coverage, when applicable:
statutory limits.
(v) Jones Act coverage when applicable. Minimum limits required:
$1,000,000 per accident.
(b) Commercial General Liability or Comprehensive General Liability
---------------------------------------------------------------
Insurance: Policy to include Blanket Contractual and Broad Form Liability
----------
endorsements, or their equivalents, Completed Operations Coverage and, when
applicable, Products Coverage. The Contractual Liability section must
specifically cover Processor's obligations under the indemnity provisions of
this agreement.
Minimum limits required:
BODILY INJURY/PROPERTY DAMAGE: $1,000,000 per occurrence.
Combined Single Limit.
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PRODUCTS/COMPLETED OPERATIONS: $1,000,000 per occurrence,
Combined Single Limit.
PERSONAL INJURY: $1,000,000 per occurrence.
When coverage obtained in accordance with this paragraph is written on a
"Claims Made" or "Claims First Made:" form, Completed Operations coverage must
be specifically endorsed to provide that it will respond to claims made for at
least 24 months after completion of the work.
The Fellow Employee and Explosion, Collapse and Under-ground Exclusions
must be deleted.
(c) Automobile Liability: Coverage shall include all owned, non-owned,
--------------------
leased or hired vehicles.
Minimum Limits required:
BODILY INJURY/PROPERTY DAMAGE $1,000,000 per occurrence,
Combined Single Limit.
Processor warrants that it is in full compliance with any "No Fault" provision
of any state in which it operates motor vehicles.
(d) Umbrella Liability Insurance: Coverage shall be excess of, and at least
----------------------------
as broad as, the primary coverages listed in paragraphs a, b and c of this
Section.
Minimum Limits required:
BODILY INJURY/PROPERTY DAMAGE - $10,000,000 per occurrence,
Combined Single Limit.
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(e) Aircraft Liability: If any operations require the use of helicopters or
-------------------
fixed wing aircraft, Processor will, in addition to all other insurance coverage
required in this Section, maintain and shall require any Subcontractor utilizing
rotary or fixed wing aircraft to maintain aircraft liability insurance with
minimum limits of $10,000,000 per occurrence for bodily injury and property
damage.
(f) Marine Insurance: If any operations are to be conducted in or on
-----------------
navigable waters or on any pier, wharf, or other structure adjoining such
waters, Processor shall, in addition to all other insurance required in this
Section, maintain and shall require any Subcontractor engaged in such operations
to maintain, the following additional coverage, as appropriate:
(i) HULL/PROTECTION & INDEMNITY - coverage to be provided for each
vessel used in any operations conducted under the terms of this
agreement. Minimum limits required:
HULL - Current value of the vessel.
PROTECTION & INDEMNITY $1,000,000 per vessel per occurrence for
bodily injury and property damage.
(ii) MARINE EMPLOYERS LIABILITY - minimum limits required:
$1,000,000 per accident.
(g) Environmental Impairment Liability (or Equivalent): Policy to include
---------------------------------------------------
coverage for all loss and liability resulting from Processor's activities and
liability assumed by Processor under this Agreement.
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Minimum Limits required:
BODILY INJURY/PROPERTY DAMAGE - $10,000,000 per occurrence,
Combined Single Limit.
(h) All Risk Property: Limits shall be sufficient to cover replacement
------------------
cost for Processor's Facilities and provide a Bailee Endorsement to cover any
loss of natural gas in Processor's possession.
(i) Boiler and Machinery: Limits shall be sufficient to cover replacement
---------------------
cost for Processor's Facilities.
(j) Business Interruption: Limits shall be at Processor's discretion.
---------------------
10.2 All insurance policies required by this section will be written by
insurance companies reasonably acceptable to Columbia, will be primary with
respect to any insurance maintained by Columbia, and will be endorsed to provide
at least 30 days advance notification to Columbia of any cancellation, non-
renewal or material change in coverage and cancellation for non-payment of
premium will require 30 days advance notice to Columbia. Insurance policies
required by paragraphs b, c, d, e, f and g will name Columbia as an additional
insured. All insurance policies required by this Section will contain a waiver
of subrogation as against Columbia. Some of the foregoing policies may be
obtained and maintained by Processor's Contractor, which policies shall name
Columbia and MarkWest as additional insureds and provide Waiver of Subrogation
against both parties. Some of the foregoing policies may be obtained and
maintained by Processor's Contractor, which policies shall name Columbia and
2O
processor as additional insureds and provide Waiver of Subrogation against both
parties.
10.3 Processor warrants that any Contractor and/or Subcontractors of
Processor who conduct any operations or perform any work under the terms of this
Agreement, or in connection with the facilities, shall be specifically covered
by Processor's policies or equivalent policies carried by the Contractor and/or
Subcontractors.
10.4 Processor shall furnish, on behalf of itself and any Contractor or
Subcontractor, prior to Processor conducting any activity on Processor's
Facility site, copies of all insurance policies intended to meet the
requirements of this Section. Properly executed Certificates of Insurance may be
substituted for insurance policies provided that such Certificates contain
positive statements of compliance with all the terms of this Agreement which
apply to the type of insurance represented by the Certificate. Insurance
Policies whose terms expire during the term of this Agreement will be renewed or
replaced with no gaps in coverage, and evidence of such renewal or replacement
will be provided to Columbia under the same conditions as prescribed above.
ARTICLE XI. INDEMNITY
11.1 Processor shall indemnify and hold harmless Columbia from and against
any and all loss, damage, and liability and from any and all claims for damages
on account of or by reason of bodily injury, including death, which may be
sustained or claimed to be sustained by any person, including the employees of
Processor and of any Contractor or Subcontractor of Processor, and from and
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against any and all damages to property, including loss of use, and including
property of Columbia, caused by or arising out of or claimed to have been caused
by or to have arisen out of an act or omission of Processor or its agents,
employees, subcontractors or contractors in connection with the performance of
this Agreement, in connection with the performance of this Agreement, whether or
not insured against and Processor shall at its own cost and expense defend any
claims, suits, actions, or proceedings, whether groundless or not, which may be
commenced against Columbia by reason thereof or in connection therewith, and
Processor shall pay any and all judgments which may be recovered in any such
actions, claims, proceedings, or suits, and defray any and all expenses,
including costs and attorney's fees, which may be incurred in or by reason of
such actions, claims, proceedings, or suits, including environmental impairment;
provided, however, that the foregoing indemnification will not cover loss,
damage, or liability arising from the sole negligence or wilful misconduct of
Columbia, its agents and employees. Notwithstanding the foregoing, in the event
of such actions, claims, proceedings or suits, Columbia shall be entitled, if it
so elects, to representation by attorneys of its own selection, including
attorneys employed by Columbia. The obtaining by Processor of a release or
discharge, running to Processor or Columbia or either or both of them, from a
property owner for damages resulting from any phase of the performance of the
obligations of this Agreement shall not diminish nor affect in any way the
rights of Columbia and the obligations of Processor as set forth in this Article
IX; and to the extent permitted by law.
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Processor expressly waives the benefit, for itself and all contractors and
subcontractors, insofar as the indemnification of Columbia is concerned, of the
provisions of any applicable workers' compensation law limiting the tort or
other liability of an employer on account of injuries to the employer's
employees.
Except to the extent of Columbia's obligations under the Purchase and
Demolition Agreements, Construction Premises and Remaining Premises between
Columbia and Processor both dated March 15, 1995, Processor shall further
indemnify and hold Columbia harmless from any and all claims for costs,
expenses, fines or fees associated with or arising from claims asserted under
any local, state and/or federal environmental law or regulations, regardless of
whether such claims relate to conditions that existed on the property prior to
Processor's entry thereon.
11.2 Columbia shall indemnify and hold harmless Processor from and against
any and all loss, damage and liability, and from any injury,
including death, which may be sustained or claimed to be sustained by
any person, including the employees of Columbia and of any Contractor
or Subcontractor of Columbia and, from and against, any and all
damages to property, including loss of use, and including property of
Processor, caused by or arising out of or claimed to have been caused
by or to have arisen out of the sole negligence of Columbia or its
agents, employees or subcontractors.
ARTICLE XII. FORCE MAJEURE
12. Neither Processor nor Columbia shall be held responsible for any
losses resulting if the fulfillment of any terms or provisions shall be delayed
23
or prevented wholly or in part by compliance with any law, order or regulation,
whether valid or invalid, of any governmental authority or of any person
purporting to act therefor or by any act or condition not within the reasonable
control of the party whose performance is interfered with and which by the
exercise of reasonable diligence said party is unable to prevent, including but
not limited to revolutions or other disorders, wars, acts of enemies, embargoes
or other import or export restrictions, strikes, lockouts or other industrial
disturbances, fires, storms, floods, acts of God or explosions. The settlement
of strikes or lockouts shall be entirely within the discretion of the party
having the difficulty and such party shall not be required to make settlement of
strikes or lockouts by acceding to the demands of the opposing party when such
course is inadvisable in the discretion of the party having the difficulty. If
by reason of any cause of the nature set forth above in this Article XII,
supplies of either natural gas or natural gas liquids are curtailed or cut off,
then neither Columbia nor Processor shall be required to replace the
hydrocarbons so curtailed or cut off nor shall either party be required to make
up deliveries omitted by reason of any of the above causes. If either party is
unable to fulfill the terms and conditions of this agreement by reason of any
such cause as provided in this Article, the party rendered unable to perform
hereunder shall give the other party notice in writing as soon as reasonably
possible after the occurrence of the cause relied on, setting forth the full
particulars in connection therewith, and deliveries shall be suspended during
the continuance of any inability so caused but for no longer period, and such
cause, so far as
24
possible, shall be remedied with all reasonable dispatch. This agreement shall
not be terminated by reason of any such cause set out above but shall remain in
full force and effect and this Agreement shall not be extended regardless of any
such curtailment or cessation.
ARTICLE XIII. REMEDIATION UPON TERMINATION
13. In the event of a permanent cessation of operations of Processor's
Facilities which would result in title to the real property and/or Processor's
Facilities to be passed to Columbia, Processor shall remediate the entire tract
owned by Processor, including that portion thereof affected by the past
operation and the dismantlement, demolition, removal and disposal of the
existing Kenova Extraction Plant, to (i) a level that meets or exceeds a
specific clean-up or compliance level established under applicable State and/or
federal environmental laws and regulations, or (ii) where such laws and
regulations do not state a specific standard, to a level or standard of
remediation and compliance approved by the governmental agency or agencies
having jurisdiction over the premises, such standard being negotiated solely
between Processor and such agency having jurisdiction and reasonably acceptable
to Columbia, for the purpose of administering such environmental laws and
regulations. Further, Processor shall indemnify and hold Columbia harmless from
any and all claims for costs, expenses or fees associated with or arising from
Processor's remediation of or failure to remediate environmental conditions on
the tract owned by Processor, including, but not limited to, claims asserted
under any State and/or federal environmental law or regulation, regardless of
whether such claims relate to conditions that
25
existed on the property prior to Processor's entry thereon, except to the extent
of Columbia's obligations under the Purchase and Demolition Agreements.
XIV. DEFAULT AND PENALTY
14. In the event Processor, for any reason other than Force Majeure and
Article 5.2 hereof and for reasons related to safety considerations and the
integrity of Processor's Facilities, interrupts the liquid production process as
required under the terms and conditions of this Agreement, Processor shall pay
to Columbia a penalty of Five Thousand Dollars ($5,000) per day unless Columbia
can establish damages in excess of the Five Thousand Dollars ($5,000) per day.
In the event Processor interrupts the liquid production process for any reason,
including without limitation, Force Majeure, which interruption continues for a
period of 30 consecutive days and within such 30-day period fails to provide
Columbia with a reasonable plan and date for resuming liquid production
acceptable to Columbia, or is otherwise in default of any of the terms,
conditions, covenants, warranties or agreements contained herein, and which
default continues for 30 days after written notice from Columbia to Processor,
if curable within 30 days or if not curable within 30 days and processor has not
commenced good faith, diligent efforts to cure within that 30 day period,
Columbia, may at its sole discretion and in addition to any other legal or
equitable remedy available to Columbia:
(a) satisfy any and all obligations of Processor connected directly or
indirectly with this Agreement, including but not limited to any default of
Processor under this Agreement, with reimbursement from Processors of any amount
26
paid together with (i) attorneys fees and (ii) annual interest at the rate of
15%, if this rate is allowed by law, otherwise at the highest rate allowed by
law and, if not reimbursed, such amount may be deducted (with attorneys fees and
interest as above provided) by Columbia from any amounts then or thereafter due
Processor. These rights of reimbursement and deduction are in addition to
Columbia's rights to indemnity under this Agreement; and/or,
(b) seek interlocutory equitable relief against Processor, as Processor
acknowledges and agrees that a default will cause irreparable harm and loss to
Columbia, in a form which will allow Columbia, or any entity chosen by Columbia,
to complete the obligations of Processor herein at the sole risk, liability,
cost and expense of Processor and, if not reimbursed, such amount may be
deducted (with attorneys fees and interest as above provided) by Columbia from
any amounts then or thereafter due Processor. These rights of reimbursement and
deduction are in addition to Columbia's rights to indemnity under this
Agreement; and/or,
(c) purchase Processor's Facilities for the net depreciated book value of
Processor's Facilities.
ARTICLE XV. ASSIGNMENTS
15. This Agreement may not be assigned by either party without the other
party's prior written consent.
ARTICLE XVI. NOTICES
16. Any notices required or permitted under this Agreement, with the
exception of the notice provision of Article V, Paragraph 5.4, shall be made via
facsimile at the following numbers followed by notice through the U.S. Postal
27
Service return receipt requested, to the following addresses or such other
facsimile numbers and addresses as may be designated by the parties hereto:
MarkWest Hydrocarbon Partners, Ltd.
5613 DTC Parkway, Suite 400
Englewood, CO 80111
Attention of Vice President, Finance
Facsimile: (303) 290-8769
Columbia Gas Transmission Corporation
P.O. Box 1273
Charleston, WV 25325-1273
Attention: Vice President,
Volume Management
Facsimile: (304) 357-2424
ARTICLE XVII. RIGHT TO AUDIT
17. Each party agrees that the other or the other's Agents, at all
reasonable times, shall have the right to examine or audit the books, accounts
and records of that party to verify compliance with the terms and conditions of
this Agreement.
ARTICLE XVIII. DISPUTE RESOLUTION
18. Any and all disputes, claims or controversies arising from the
interpretation of this Agreement, or a party's obligations hereunder, shall be
resolved by binding arbitration conducted in accordance with the Commercial
Arbitration rules of the American Arbitration Association.
ARTICLE XIX. LAWS, RULES AND REGULATIONS AND CHOICE OF LAW
19. This Agreement and all operations hereunder shall be in accordance
with and subject to all applicable Federal, State and Local laws, rules and
28
regulations. This Agreement shall be construed in accordance with the laws of
the State of West Virginia, without reference to any conflicts of law
provisions.
ARTICLE XX. SEVERABILITY
20. If any sections or provisions of this Agreement shall be held by any
court of competent jurisdiction to be illegal, void or unenforceable, such
sections or provisions shall survive to the extent enforceable and allowed by
law, but the illegality or unenforceability of any such sections or provisions
shall have no effect upon and shall not impair the enforceability of any other
Articles or provisions of this Agreement.
ARTICLE XXI. AUTHORITY TO PROCESS
21. Except for gas processed by Processor under separate agreement with
Shippers, Columbia represents it has all right and authority to permit and cause
Processor to recover those liquefiable hydrocarbons from the natural gas stream
and upon recovery thereof, title to those liquefiable hydrocarbons will be held
by Processor.
ARTICLE XXII. INDEPENDENT CONTRACTOR
22. It is mutually agreed that in the performance of any and all actions
necessary to perform the duties under the terms and conditions of this
Agreement, Processor is an independent contractor, and nothing in this Contract
shall be construed as creating the relationship of principal and agent, or
employer or employee, between Columbia and/or Processor or Processor's agents or
employees. Processor shall have no authority to hire any persons on behalf of
Columbia, and any and all persons whom it may employ shall be deemed to be
solely the employees
29
of Processor. Processor shall have control and management of the work, the
selection of employees and the fixing of their hours of labor, and no right is
reserved to Columbia to direct or control the manner in which the work is
performed, as distinguished from the result to be accomplished. Nothing herein
contained shall be construed to authorize Processor to incur any debt, liability
or obligation of any nature for or on behalf of Columbia, or for Processor to
cause any lien or other encumbrance to be placed on Columbia's property, and
Processor shall immediately remove, and indemnify Columbia against, all costs
incurred in connection with, any such debt, liability, obligation, lien or other
encumbrance, if any arises in contravention hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year last above written.
COLUMBIA GAS TRANSMISSION CORPORATION
By: /s/ Peter J. Kinsella
Peter J. Kinsella
Title: Vice President, Volume Management
MARKWEST HYDROCARBON PARTNERS, LTD.
By: /s/ Patrick W. Murray
Title: Vice President - Finance
3O
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 12/31/10 | | 4 | | | | | None on these Dates |
| Filed on: | | 8/2/96 |
| | 3/15/95 | | 4 | | 23 |
| List all Filings |
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