MARKWEST ENERGY PARTNERS, L.P.
2,000,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
, 2002
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X.X. XXXXXXX & SONS, INC.
RBC CAPITAL MARKETS
MCDONALD INVESTMENTS, INC.
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, MarkWest Energy Partners, L.P., a Delaware limited
partnership (the "PARTNERSHIP"), MarkWest Operating Company, L.L.C., a Delaware
limited liability company (the "OPERATING COMPANY"), MarkWest Energy GP, L.L.C.,
a Delaware limited liability company (the "GENERAL PARTNER"), MarkWest
Hydrocarbon, Inc., a Delaware corporation ("MARKWEST"), MarkWest Michigan, Inc.,
a Colorado corporation and a wholly owned subsidiary of MarkWest ("MW
MICHIGAN"), West Shore Processing Company, L.L.C., a Delaware limited liability
company ("WEST SHORE LLC"), Basin Pipeline L.L.C., a Delaware limited liability
company ("BASIN LLC"), and MarkWest Energy Appalachia, L.L.C., a Delaware
limited liability company ("MARKWEST APPALACHIA LLC"), hereby address you as the
"Underwriters" and hereby confirm their agreement with the several Underwriters
named below. The Partnership, the Operating Company, West Shore LLC, Basin LLC
and MarkWest Appalachia LLC are collectively referred to herein as the
"PARTNERSHIP ENTITIES." West Shore LLC, Basin LLC and MarkWest Appalachia LLC
are collectively referred to herein as the "OPERATING SUBS." The Partnership,
the Operating Company, the General Partner, MarkWest, MW Michigan and the
Operating Subs are collectively referred to herein as the "MARKWEST PARTIES."
It is understood and agreed by all parties that the Partnership was formed
to acquire and own most of the natural gas gathering and processing and natural
gas liquid transportation, fractionation and storage assets of MarkWest. The
partnership agreement of the Partnership was adopted by the General Partner, in
its capacity as the General Partner and as the organizational limited partner of
the Partnership (the "ORGANIZATIONAL LIMITED PARTNER"), on ________, 2002 (as
the same has been and may be amended or restated at or prior to the Closing Date
(as hereinafter defined), the "PARTNERSHIP AGREEMENT"). The Partnership will
operate its business
through the Operating Company. The Operating Company will operate its business
through itself and the Operating Subs. The General Partner serves as the general
partner of the Partnership.
On or prior to the date hereof, the Operating Company and ____________
entered into a bank credit agreement (the "BANK CREDIT AGREEMENT") providing for
a $37 million revolving facility (of which $10 million will be available for
working capital purposes and $27 million will be available to fund acquisitions
and capital expenditures) and a $23 million term facility.
It is further understood and agreed by all parties that as of the date
hereof:
(i) each of the General Partner and MarkWest Appalachia LLC is a
wholly owned direct subsidiary of MarkWest;
(ii) the General Partner is the sole general partner of the
Partnership, and MarkWest is the sole limited partner of the Partnership;
(iii) the Operating Company is a wholly owned direct subsidiary of the
Partnership; and
(iv) each of West Shore LLC and Basin LLC is a wholly owned direct
subsidiary of MW Michigan.
On or prior to the Closing Date, the Partnership, the General Partner, the
Operating Company, MarkWest, the Operating Subs and MW Michigan will enter into
a Contribution, Conveyance, Assignment and Assumption Agreement (the
"CONTRIBUTION AGREEMENT") pursuant to which the following transactions will
occur:
(a) MarkWest will contribute its assets in Appalachia that will be
owned by the Partnership to MarkWest Appalachia LLC as a capital
contribution and in exchange for the assumption of related liabilities,
including trade payables and [$9] million in MarkWest debt;
(b) MarkWest will contribute its interest in MarkWest Appalachia LLC
to the General Partner as a capital contribution;
(c) the General Partner will contribute its interest in MarkWest
Appalachia LLC to the Partnership in exchange for (1) the continuation of
its 2% general partner interest, (2) the issuance of incentive distribution
rights, as defined in the Partnership Agreement (the "INCENTIVE
DISTRIBUTION RIGHTS"), (3) __________ subordinated units representing
subordinated limited partner interests in the Partnership ("SUBORDINATED
UNITS"), and (4) the right to receive [$23] million;
(d) MW Michigan will contribute its interest in Basin LLC and West
Shore LLC to the Partnership in exchange for (1) __________ Subordinated
Units and (2) the assumption by the Partnership of [$15.6] million of debt
of MW Michigan;
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(e) the public offering of the Firm Units contemplated hereby will be
consummated;
(f) the Partnership will (1) pay transaction expenses in connection
with the public offering of the Firm Units, (2) retire the [$15.6] million
of debt assumed by the Partnership, (3) contribute [$9] million to MarkWest
Appalachia LLC as a capital contribution which in turn will retire its debt
and (4) contribute [$2.9] million to Basin LLC as a capital contribution
which in turn will retire its debt;
(g) the Partnership will contribute its remaining cash from the public
offering of the Firm Units contemplated hereby and its interests in
MarkWest Appalachia LLC, Basin LLC and West Shore LLC to the Operating
Company as a capital contribution;
(h) the Operating Company will borrow $23 million from the term
facility under the Bank Credit Agreement and distribute the funds to the
Partnership which in turn will distribute the funds to the General Partner;
(i) the General Partner will distribute its Subordinated Units to
MarkWest;
(j) MarkWest will sell [28,912] Subordinated Units to certain officers
of the General Partner, as well as officers and key employees of MarkWest
who provide services on behalf of the Partnership (collectively, the
"MANAGEMENT GROUP") for an aggregate of [$462,585]; and
(k) MarkWest will sell 10% of its interest in the General Partner to
the Management Group for an aggregate of [$204,082].
The transactions described above in clauses (a)-(k) are referred to herein
collectively as the "TRANSACTIONS." In connection with the Transactions, the
parties to the Transactions have entered or will enter into various bills of
sale, assignments, conveyances, contribution agreements and related documents
(collectively, the "CONVEYANCES"). The Conveyances and the Contribution
Agreement are collectively referred to herein as the "CONTRIBUTION DOCUMENTS."
1. DESCRIPTION OF COMMON UNITS. The Partnership proposes to issue and
sell to the Underwriters 2,000,000 Common Units (the "FIRM UNITS"). Solely for
the purpose of covering over-allotments in the sale of the Firm Units, the
Partnership further proposes to grant to the Underwriters the right to purchase
up to an additional 300,000 Common Units (the "OPTION UNITS"), as provided in
Section 3 of this Agreement. The Firm Units and the Option Units are herein
sometimes referred to as the "UNITS" and are more fully described in the
Prospectus hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM UNITS. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Partnership agrees to sell to the
Underwriters, and each such Underwriter agrees,
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severally and not jointly, (a) to purchase from the Partnership, at a purchase
price of [$_____] per unit, the number of Firm Units set forth opposite the name
of such Underwriter in Schedule I hereto and (b) to purchase from the
Partnership any additional number of Option Units which such Underwriter may
become obligated to purchase pursuant to Section 3 hereof.
Delivery of the Firm Units will be in book-entry form through the
facilities of The Depository Trust Company, New York, New York ("DTC"). Delivery
of the documents required by Section 6 hereof with respect to the Units shall be
made at or prior to 11:00 a.m. on [___________, 2002] at Xxxxxx & Xxxxxx LLP,
2300 First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000-0000 or at such other
place as may be agreed upon between you and the Partnership (the "PLACE OF
CLOSING"), or at such other time and date not later than five full business days
thereafter as you and the Partnership may agree, such time and date of payment
and delivery being herein called the "CLOSING DATE."
The Partnership will cause its transfer agent to deposit as original issue
the Firm Units pursuant to the Full Fast Delivery Program of the DTC.
It is understood that an Underwriter, individually, may (but shall not be
obligated to) make payment on behalf of the other Underwriters whose funds shall
not have been received prior to the Closing Date for Units to be purchased by
such Underwriter. Any such payment by an Underwriter shall not relieve the other
Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Units to the
public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE OPTION UNITS. The Partnership
hereby grants an option to the Underwriters to purchase from the Partnership up
to 300,000 Option Units, on the same terms and conditions as the Firm Units;
provided, however, that such option may be exercised only for the purpose of
covering any over-allotments that may be made by them in the sale of the Firm
Units. No Option Units shall be sold or delivered unless the Firm Units
previously have been, or simultaneously are, sold and delivered.
The option is exercisable by you at any time, and from time to time, before
the expiration of 30 days from the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next day thereunder when the
American Stock Exchange is open for trading), for the purchase of all or part of
the Option Units covered thereby, by notice given by you to the Partnership in
the manner provided in Section 13 hereof, setting forth the number of Option
Units as to which the Underwriters are exercising the option, and the date of
delivery of said Option Units, which date shall not be more than five business
days after such notice unless otherwise agreed to by the parties. You may
terminate the option at any time, as to any unexercised portion thereof, by
giving written notice to the Partnership to such effect.
You shall make such allocation of the Option Units among the Underwriters
as may be required to eliminate purchases of fractional Units.
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Delivery of the Option Units will be in book-entry form through the
facilities of DTC. Delivery of the documents required by Section 6 hereof with
respect to the Units shall be made at the Place of Closing at or prior to 11:00
a.m. on the date designated in the notice given by you as provided above, or at
such other time and date as you and the Partnership may agree (which may be the
same as the Closing Date), such time and date of payment and delivery being
herein called the "OPTION CLOSING DATE." On the Option Closing Date, the
Partnership shall provide the Underwriters such representations, warranties,
agreements, opinions, letters, certificates and covenants with respect to the
Option Units as are required to be delivered on the Closing Date with respect to
the Firm Units.
The Partnership will cause its transfer agent to deposit as original issue
the Option Units pursuant to the Full Fast Delivery Program of the DTC.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE MARKWEST PARTIES.
The MarkWest Parties jointly and severally represent and warrant to and agree
with each Underwriter that:
(a) DEFINITIONS. A registration statement (Registration No.
333-81780) on Form S-1 with respect to the Units, including a preliminary
prospectus, and such amendments to such registration statement as may have
been required to the date of this Agreement, has been prepared by the
Partnership pursuant to and in conformity with the requirements of the
Securities Act of 1933, as amended (the "1933 ACT"), and the rules and
regulations thereunder (the "1933 ACT RULES AND REGULATIONS") of the
Securities and Exchange Commission (the "SEC") and has been filed and
declared effective by the SEC under the 1933 Act. Copies of such
registration statement, including any amendments thereto, each related
preliminary prospectus contained therein, and the exhibits, financial
statements and schedules thereto have heretofore been delivered by the
Partnership to you. A final prospectus containing information permitted to
be omitted at the time of effectiveness by Rule 430A of the 1933 Act Rules
and Regulations will be filed promptly by the Partnership with the SEC in
accordance with Rule 424(b) of the 1933 Act Rules and Regulations. The term
"REGISTRATION STATEMENT" as used herein means the registration statement as
amended at the time it became effective under the 1933 Act (the "EFFECTIVE
DATE"), including financial statements and all exhibits and, if applicable,
the information deemed to be included by Rule 430A of the 1933 Act Rules
and Regulations. If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to such registration statement
will be filed and must be declared effective before the offering of Units
may commence, the term "REGISTRATION STATEMENT" as used herein means the
registration statement as amended by said post-effective amendment. If an
abbreviated registration statement is prepared and filed with the SEC in
accordance with Rule 462(b) or Rule 462(d) under the 1933 Act (an
"ABBREVIATED REGISTRATION STATEMENT"), the term "REGISTRATION STATEMENT" as
used in this Agreement includes the Abbreviated Registration Statement. The
term "PROSPECTUS" as used herein means the prospectus as first filed with
the SEC pursuant to Rule 424(b) of the 1933 Act Rules and Regulations. The
term "PRELIMINARY PROSPECTUS" as used herein shall mean the preliminary
prospectus, dated [___________], 2002, relating to the Units as such
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preliminary prospectus shall have been amended from time to time prior to
the date of the Prospectus. For purposes of this Agreement, the words
"amend," "amendment," "amended," "supplement" or "supplemented" with
respect to the Registration Statement or the Prospectus shall mean
amendments or supplements to the Registration Statement or the Prospectus,
as the case may be.
(b) NO MATERIAL MISSTATEMENTS OR OMISSIONS. Neither the SEC nor any
state or other jurisdiction or other regulatory body has issued, and
neither is, to the knowledge of the MarkWest Parties, threatening to issue,
any stop order under the 1933 Act or other order suspending the
effectiveness of the Registration Statement (as amended or supplemented) or
preventing or suspending the use of the Preliminary Prospectus or the
Prospectus or suspending the qualification or registration of the Units for
offering or sale in any jurisdiction nor instituted or, to the knowledge of
the MarkWest Parties, threatened to institute proceedings for any such
purpose. The Registration Statement, in the form in which it became
effective and also in such form as it may be when any post-effective
amendment thereto becomes effective, and the Prospectus comply or will
comply, as the case may be, in all material respects with the requirements
of the 1933 Act and the 1933 Act Rules and Regulations. Neither the
Registration Statement nor any amendment thereto, as of the applicable
effective date, contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any material
fact required to be stated therein or necessary to make the statements
therein, not misleading, and neither the Preliminary Prospectus, the
Prospectus nor any supplement thereto contains or will contain, as the case
may be, any untrue statement of a material fact or omits or will omit to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Partnership makes no representation or warranty
as to information contained in or omitted from the Registration Statement,
the Preliminary Prospectus or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Partnership relating to the Underwriters by or on behalf
of the Underwriters expressly for use in the preparation thereof (as
provided in Section 14 hereof). Each of the statements made by the
Partnership in such documents within the coverage of Rule 175(b) of the
1933 Act Rules and Regulations, including (but not limited to) any
statements with respect to future available cash or future cash
distributions of the Partnership or the anticipated ratio of taxable income
to distributions was made or will be made with a reasonable basis and in
good faith.
(c) FORMATION AND DUE QUALIFICATION OF THE PARTNERSHIP. The
Partnership has been duly formed and is validly existing in good standing
as a limited partnership under the Delaware Revised Uniform Limited
Partnership Act ("DELAWARE LP ACT") with full partnership power and
authority to own or lease its properties to be owned or leased at the
Closing Date, to assume the liabilities being assumed by it pursuant to the
Contribution Documents and to conduct its business to be conducted at the
Closing Date in all material respects as described in the Registration
Statement and the Prospectus. The Partnership is, or at the Closing Date
will be, duly registered or qualified as a foreign limited
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partnership for the transaction of business under the laws of each
jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to
register or qualify would not (i) have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Partnership Entities, taken as a whole ("MATERIAL ADVERSE EFFECT"), or (ii)
subject the limited partners of the Partnership to any material liability
or disability.
(d) FORMATION AND DUE QUALIFICATION OF THE GENERAL PARTNER, THE
OPERATING COMPANY AND THE OPERATING SUBS. Each of the General Partner, the
Operating Company and the Operating Subs has been duly formed and is
validly existing in good standing as a limited liability company under the
Delaware Limited Liability Company Act (the "DELAWARE LLC ACT") with full
limited liability company power and authority to own or lease its
properties to be owned or leased at the Closing Date, to assume the
liabilities being assumed by it pursuant to the Contribution Documents and
to conduct its business to be conducted at the Closing Date, in each case
in all material respects as described in the Registration Statement and the
Prospectus. The General Partner has all necessary limited liability company
power and authority to act as general partner of the Partnership. Each of
the General Partner, the Operating Company and the Operating Subs is duly
registered or qualified as a foreign limited liability company for the
transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i)
have a Material Adverse Effect or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(e) FORMATION AND DUE QUALIFICATION OF MARKWEST. MarkWest has been
duly incorporated and is validly existing in good standing under the
Delaware General Corporation Law ("DGCL") with full corporate power and
authority to own or lease its properties to be owned or leased at the
Closing Date and to conduct its business to be conducted at the Closing
Date, in all material respects as described in the Registration Statement
and the Prospectus. MarkWest is duly registered or qualified as a foreign
corporation for the transaction of business under the laws of each
jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to
register or qualify would not (i) have a Material Adverse Effect or (ii)
subject the limited partners of the Partnership to any material liability
or disability.
(f) FORMATION, DUE QUALIFICATION AND OWNERSHIP OF MW MICHIGAN. MW
Michigan has been duly incorporated and is validly existing in good
standing under the Colorado Business Corporation Act ("CBCA") with full
corporate power and authority to own or lease its properties to be owned or
leased at the Closing Date and to conduct its business to be conducted at
the Closing Date in all material respects. MW Michigan is duly registered
or qualified as a foreign corporation for the transaction of business under
the laws of each jurisdiction in which the character of the business
conducted by it or the
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nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to
register or qualify would not (i) have a Material Adverse Effect or (ii)
subject the limited partners of the Partnership to any material liability
or disability. All of the outstanding capital stock of MW Michigan has been
duly authorized and validly issued, is fully paid and nonassessable and is
owned by MarkWest free and clear of all liens, encumbrances, security
interests, equities, charges or claims; there are no outstanding options to
purchase, or rights or warrants to subscribe for, or securities or
obligations convertible into, or contracts or commitments to issue or sell,
any capital stock or other securities of MW Michigan.
(g) OWNERSHIP OF THE GENERAL PARTNER INTEREST IN THE PARTNERSHIP. At
the Closing Date and the Option Closing Date, after giving effect to the
Transactions, the General Partner will be the sole general partner of the
Partnership with a 2% general partner interest; such general partner
interest will be duly authorized and validly issued in accordance with the
Partnership Agreement; and the General Partner will own such general
partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(h) OWNERSHIP OF THE SUBORDINATED UNITS AND THE INCENTIVE
DISTRIBUTION RIGHTS. At the Closing Date and the Option Closing Date, after
giving effect to the Transactions, (i) MarkWest will own _________
Subordinated Units, (ii) MW Michigan will own Subordinated Units, (iii) the
Management Group will collectively own ______________ Subordinated Units as
set forth on Exhibit B hereto and (iv) the General Partner will own all of
the Incentive Distribution Rights; all of such Subordinated Units and
Incentive Distribution Rights and the limited partner interests represented
thereby will be duly authorized and validly issued in accordance with the
Partnership Agreement, and will be fully paid (to the extent required under
the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement--Limited Liability"); and
MarkWest, MW Michigan and the Management Group will own their respective
Subordinated Units and the General Partner will own the Incentive
Distribution Rights free and clear of all liens, encumbrances (except with
respect to the Incentive Distribution Rights, restrictions on
transferability as described in the Prospectus), security interests,
equities charges or claims.
(i) VALID ISSUANCE OF THE UNITS. At the Closing Date or the Option
Closing Date, as the case may be, the Firm Units or the Option Units, as
the case may be, and the limited partner interests represented thereby,
will be duly authorized by the Partnership Agreement and, when issued and
delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement--Limited Liability"); and
other than the Subordinated Units and the Incentive Distribution Rights,
the Units will be the only limited partner interests of the Partnership
issued and outstanding at the Closing Date or the Option Closing Date.
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(j) OWNERSHIP OF THE MEMBERSHIP INTERESTS IN THE OPERATING COMPANY.
At the Closing Date and the Option Closing Date, after giving effect to the
Transactions, the Partnership will own 100% of the issued and outstanding
membership interests in the Operating Company; such membership interests
will be duly authorized and validly issued in accordance with the limited
liability company agreement of the Operating Company (as the same may be
amended or restated at or prior to the Closing Date, the "OPERATING COMPANY
LLC AGREEMENT") and will be fully paid (to the extent required under the
Operating Company LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); and the Partnership will own its membership interests free and clear
of all liens, encumbrances, security interests, equities, charges or
claims.
(k) OWNERSHIP OF THE OPERATING SUBS. At the Closing Date and the
Option Closing Date, after giving effect to the Transactions, the Operating
Company will own 100% of the issued and outstanding membership interests in
each of the Operating Subs; such membership interests will be duly
authorized and validly issued in accordance with the limited liability
company agreements of the Operating Subs (as the same may be amended or
restated at or prior to the Closing Date, the "OPERATING SUBS LLC
AGREEMENTS") and will be fully paid (to the extent required under the
Operating Subs LLC Agreements) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); and the Operating Company will own such membership interests free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(l) OWNERSHIP OF THE GENERAL PARTNER. At the Closing Date and the
Option Closing Date, after giving effect to the Transactions, MarkWest will
own 90% of the issued and outstanding membership interests in the General
Partner and the Management Group will own collectively 10% of the issued
and outstanding membership interests in the General Partner as set forth on
EXHIBIT B hereto; such membership interests will be duly authorized and
validly issued in accordance with the General Partner's limited liability
company agreement (as the same may be amended or restated at or prior to
the Closing Date, the "GENERAL PARTNER LLC AGREEMENT") and will be fully
paid (to the extent required under the General Partner LLC Agreement) and
nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and MarkWest and the Management Group will
own such membership interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims.
(m) NO OTHER SUBSIDIARIES. Other than the Partnership's ownership of
its membership interest in the Operating Company and the Operating
Company's ownership of its membership interest in the Operating Subs,
neither the Partnership nor the Operating Company own, and at the Closing
Date and the Option Closing Date, neither will own, directly or indirectly,
any equity or long-term debt securities of any corporation, partnership,
limited liability company, joint venture, association or other entity.
Other than its ownership of its partnership interests in the Partnership,
the General Partner does
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not own, and at the Closing Date and the Option Closing Date will not own,
directly or indirectly, any equity or long-term debt securities of any
corporation, partnership, limited liability company, joint venture,
association or other entity.
(n) NO PREEMPTIVE RIGHTS, REGISTRATION RIGHTS OR OPTIONS. Except as
described in the Prospectus, there are no preemptive rights or other rights
to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any partnership or member interests of the Partnership
Entities, in each case pursuant to the partnership agreement or limited
liability company agreement of such entity or any other agreement or
instrument to which any of such entities is a party or by which any one of
them may be bound. Neither the filing of the Registration Statement nor the
offering or sale of the Units as contemplated by this Agreement gives rise
to any rights for or relating to the registration of any Units or other
securities of the Partnership. Except as described in the Prospectus, there
are no outstanding options or warrants to purchase any partnership or any
membership interests in any Partnership Entity.
(o) AUTHORITY AND AUTHORIZATION. The Partnership has all requisite
power and authority to issue, sell and deliver (i) the Units, in accordance
with and upon the terms and conditions set forth in this Agreement, the
Partnership Agreement and the Registration Statement and the Prospectus and
(ii) the Subordinated Units and Incentive Distribution Rights, in
accordance with and upon the terms and conditions set forth in the
Partnership Agreement and the Contribution Documents. At the Closing Date
and the Option Closing Date, all corporate, partnership and limited
liability company action, as the case may be, required to be taken by the
MarkWest Parties or any of their stockholders, members or partners for the
authorization, issuance, sale and delivery of the Units, the Subordinated
Units and Incentive Distribution Rights, the execution and delivery of the
Operative Agreements (as defined in Section 4(q)) and the consummation of
the transactions (including the Transactions) contemplated by this
Agreement and the Operative Agreements, shall have been validly taken.
(p) ENFORCEABILITY OF THE UNDERWRITING AGREEMENT. This Agreement has
been duly executed and delivered by each of the MarkWest Parties, and
constitutes the valid and legally binding agreement of each of the MarkWest
Parties, enforceable against each of the MarkWest Parties in accordance
with its terms, provided that the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); provided, further, that
the indemnity and contribution provisions hereunder may be limited by
federal or state securities laws.
(q) ENFORCEABILITY OF OTHER AGREEMENTS. At or before the Closing
Date:
(i) The Partnership Agreement will have been duly authorized,
executed and delivered by the General Partner and the Organizational
Limited Partner and will be a valid and legally binding agreement of the
General Partner and the Organizational Limited Partner, enforceable against
the General Partner and the
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Organizational Limited Partner in accordance with its terms;
(ii) The Operating Company LLC Agreement will have been duly
authorized, executed and delivered by the Partnership and will be a valid
and legally binding agreement of the Partnership, enforceable against it in
accordance with its terms;
(iii) The General Partner LLC Agreement will have been duly
authorized, executed and delivered by MarkWest and will be a valid and
legally binding agreement of MarkWest, enforceable against it in accordance
with its terms;
(iv) Each of the Operating Subs LLC Agreements will have been
duly authorized, executed and delivered by the applicable Operating Sub and
will be a valid and legally binding agreement of the applicable Operating
Sub, enforceable against it in accordance with its terms;
(v) Each of the Contribution Documents will have been duly
authorized, executed and delivered by the parties thereto and will be valid
and legally binding agreements of the parties thereto enforceable against
such parties in accordance with their respective terms;
(vi) The Bank Credit Agreement will have been duly authorized,
executed and delivered by the Operating Company and will be a valid and
legally binding agreement of the Operating Company enforceable against it
in accordance with its terms;
(vii) The omnibus agreement (the "OMNIBUS AGREEMENT") will be
duly authorized, executed and delivered by each of the Partnership, the
General Partner, the Operating Company and MarkWest, and will be a valid
and legally binding agreement of each of them, enforceable against each of
them in accordance with its terms;
(viii) Each of the gas processing agreement (the "GAS PROCESSING
AGREEMENT"), the pipeline liquids transportation agreement (the "PIPELINE
LIQUIDS TRANSPORTATION AGREEMENT"), the fractionation, storage and loading
agreement (the "FRACTIONATION, STORAGE AND LOADING AGREEMENT") and the
natural gas liquids transportation and fractionation agreement (the
"NATURAL GAS LIQUIDS TRANSPORTATION AND FRACTIONATION AGREEMENT") to be
entered into as of the Closing Date by MarkWest and MarkWest Appalachia LLC
will be duly authorized, executed and delivered by each of MarkWest and
MarkWest Appalachia LLC, and will be a valid and legally binding agreement
of each of them, enforceable against each of them in accordance with its
respective terms;
provided that, with respect to each agreement described in this Section
4(q), the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating
to or affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is
11
considered in a proceeding in equity or at law). The Partnership Agreement,
the Operating Company LLC Agreement, the General Partner LLC Agreement, the
Operating Subs LLC Agreements, the Contribution Documents, the Bank Credit
Agreement, the Omnibus Agreement, the Gas Processing Agreement, the
Pipeline Liquids Transportation Agreement, the Fractionation, Storage and
Loading Agreement and the Natural Gas Liquids Transportation and
Fractionation Agreement are herein collectively referred to as the
"OPERATIVE AGREEMENTS." The Gas Processing Agreement, the Pipeline Liquids
Transportation Agreement, the Fractionation, Storage and Loading Agreement,
the Natural Gas Liquids Transportation and Fractionation Agreement and the
[__________] are herein collectively referred to as the "COLORADO OPERATING
AGREEMENTS."
(r) NO CONFLICTS. None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of this
Agreement or the Operative Agreements by the MarkWest Parties which are
parties hereto or thereto, or the consummation of the transactions
contemplated hereby and thereby (including the Transactions) (i)
conflicted, conflicts or will conflict with or constituted, constitutes or
will constitute a violation of the agreement of limited partnership,
limited liability company agreement, certificate or articles of
incorporation or bylaws or other organizational documents of any of the
MarkWest Parties, (ii) conflicted, conflicts or will conflict with or
constituted, constitutes or will constitute a breach or violation of, or a
default (or an event which, with notice or lapse of time or both, would
constitute such a default) under any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which any of the
MarkWest Parties is a party or by which any of them or any of their
respective properties may be bound, (iii) violated, violates or will
violate any statute, law or regulation or any order, judgment, decree or
injunction of any court or governmental agency or body directed to any of
the MarkWest Parties or any of their properties in a proceeding to which
any of them or their property is a party or (iv) resulted, results or will
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of any of the MarkWest Parties, which
conflicts, breaches, violations or defaults, in the case of clauses (ii),
(iii) or (iv), would, individually or in the aggregate, have a Material
Adverse Effect.
(s) NO CONSENTS. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any court,
governmental agency or body having jurisdiction over the MarkWest Parties
or any of their respective properties is required for the offering,
issuance and sale by the Partnership of the Units, the execution, delivery
and performance of this Agreement and the Operative Agreements by the
MarkWest Parties party thereto, or the consummation by the MarkWest Parties
of the transactions contemplated by this Agreement or the Operative
Agreements (including the Transactions), except (i) as described in the
Prospectus, (ii) for such consents required under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 ACT") and state
securities or "Blue Sky" laws, (iii) for such consents which have been, or
prior to the Closing Date will be, obtained, and (iv) for such consents
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect.
12
(t) NO DEFAULT. None of the MarkWest Parties is (i) in violation of
its certificate or agreement of limited partnership, limited liability
company agreement, certificate or articles of incorporation or bylaws or
other organizational documents, (ii) in violation of any law, statute,
ordinance, administrative or governmental rule or regulation applicable to
it or of any order, judgment, decree or injunction of any court or
governmental agency or body having jurisdiction over it or (iii) in breach,
default (or an event which, with notice or lapse of time or both, would
constitute such a default) or violation in the performance of any
obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any agreement, indenture, lease
or other instrument to which it is a party or by which it or any of its
properties may be bound, which breach, default or violation in the case of
clause (ii) or (iii) would, if continued, have a Material Adverse Effect or
could materially impair the ability of any of the MarkWest Parties to
perform their obligations under this Agreement or the Operative Agreements.
To the knowledge of the MarkWest Parties, no third party to any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which any of the MarkWest Parties is a party or by which any of them is
bound or to which any of their properties is subject, is in default under
any such agreement, which breach, default or violation would, if continued,
have a Material Adverse Effect.
(u) CONFORMITY OF SECURITIES TO DESCRIPTIONS IN THE PROSPECTUS. The
Units, when issued and delivered against payment therefor as provided
herein, and the Subordinated Units and the Incentive Distribution Rights,
when issued and delivered in accordance with the terms of the Partnership
Agreement, will conform in all material respects to the descriptions
thereof contained in the Prospectus.
(v) INDEPENDENT PUBLIC ACCOUNTANTS. The accountants,
PricewaterhouseCoopers LLC, who have certified or shall certify the audited
financial statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants with respect to the Partnership and the General Partner as
required by the 1933 Act and the 1933 Act Rules and Regulations.
(w) FINANCIAL STATEMENTS. At [DECEMBER 31, 2001], the Partnership
would have had, on the consolidated pro forma basis indicated in the
Prospectus (and any amendment or supplement thereto), a capitalization as
set forth therein. The historical financial statements (including the
related notes and supporting schedules) included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto)
present fairly in all material respects the financial position, results of
operations and cash flows of the entities purported to be shown thereby on
the basis stated therein at the respective dates or for the respective
periods to which they apply and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, except to the extent disclosed therein. The summary
historical and pro forma information set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto)
under the caption "Summary
13
Historical and Pro Forma Financial and Operating Data" and the selected
historical and pro forma information set forth under the caption "Selected
Historical and Pro Forma Financial and Operating Data" is accurately
presented in all material respects and prepared on a basis consistent with
the audited and unaudited historical consolidated financial statements and
pro forma financial statements, as applicable, from which it has been
derived. The pro forma financial statements of the Partnership included in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto) have been prepared in all material respects in
accordance with the applicable accounting requirements of Article 11 of
Regulation S-X of the Commission; the assumptions used in the preparation
of such pro forma financial statements are, in the opinion of the
management of the MarkWest Parties, reasonable; and the pro forma
adjustments reflected in such pro forma financial statements have been
properly applied to the historical amounts in compilation of such pro forma
financial statements.
(x) NO MATERIAL ADVERSE CHANGE. None of the MarkWest Parties has
sustained since the date of the latest audited financial statements
included in the Registration Statement and the Prospectus any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, investigation, order or decree, otherwise
than as set forth or contemplated in the Registration Statement and the
Prospectus. Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
none of the MarkWest Parties has incurred any liability or obligation,
indirect, direct or contingent, or entered into any transactions, not in
the ordinary course of business, that, singly or in the aggregate, is
material to the Partnership Entities, (ii) there has not been any material
change in the capitalization, or material increase in the short-term debt
or long-term debt, of the MarkWest Parties and (iii) there has not been any
material adverse change, or any development involving or which may
reasonably be expected to involve, singly or in the aggregate, a
prospective material adverse change in or affecting the general affairs,
business, prospects, properties, management, condition (financial or
other), partners' capital, stockholders' equity, net worth or results of
operations of the Partnership Entities.
(y) LEGAL PROCEEDINGS OR CONTRACTS TO BE DESCRIBED OR FILED. There
are no legal or governmental proceedings pending or, to the knowledge of
the MarkWest Parties, threatened, against any of the MarkWest Parties, or
to which any of the MarkWest Parties is a party, or to which any of their
respective properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required,
and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required by the 1933 Act.
14
(z) TITLE TO PROPERTIES. Upon consummation of the Transactions on the
Closing Date, [the Partnership,] the Operating Company and the Operating
Subs will have good and indefeasible title to all real property and good
title to all personal property described in the Prospectus to be owned by
[the Partnership,] the Operating Company and the Operating Subs, free and
clear of (i) liens and security interests except liens or security
interests securing indebtedness incurred, assumed or agreed to by the
Partnership, the Operating Company or any of the Operating Subs and
specifically listed in any of the Conveyances or (ii) other claims and
other encumbrances (other than liens or security interests) except such as
are described, and subject to the limitations contained, in the
Registration Statement or Prospectus and do not materially interfere with
the use of such properties taken as a whole as they have been used in the
past and are proposed to be used in the future as described in the
Registration Statement and Prospectus.
(aa) RIGHTS-OF-WAY. Upon consummation of the Transactions on the
Closing Date, each of the Partnership Entities will have, such consents,
easements, rights-of-way, permits or licenses from each person
(collectively, "rights-of-way") as are necessary to conduct its business in
the manner described, and subject to the limitations contained, in the
Prospectus, except for (i) qualifications, reservations and encumbrances as
may be set forth in the Prospectus which are not reasonably expected to
have a material adverse effect upon the ability of the Partnership
Entities, taken as a whole, to conduct their businesses in all material
respects as currently conducted and as contemplated by the Prospectus to be
conducted and (ii) such rights-of-way that, if not obtained, would not
have, individually or in the aggregate, a material adverse effect upon the
ability of the Partnership Entities, taken as a whole, to conduct their
businesses in all material respects as currently conducted and as
contemplated by the Prospectus to be conducted; other than as set forth,
and subject to the limitations contained, in the Prospectus, each of the
Partnership Entities has, or upon consummation of the Transactions at the
Closing Date will have, fulfilled and performed all its material
obligations with respect to such rights-of-way and no event has occurred
that allows, or after notice or lapse of time would allow, revocation or
termination thereof or would result in any impairment of the rights of the
holder of any such rights-of-way, except for such revocations, terminations
and impairments that would not have a material adverse effect upon the
ability of the Partnership Entities, taken as a whole, to conduct their
businesses in all material respects as currently conducted and as
contemplated by the Prospectus to be conducted; and, except as described in
the Prospectus, none of such rights-of-way contains any restriction that is
materially burdensome to the Partnership Entities, taken as a whole.
(bb) SUFFICIENCY OF CONTRIBUTION DOCUMENTS. The Contribution Documents
will be legally sufficient to transfer or convey to the Operating Company
and the Operating Subs all properties not already held by them that are,
individually or in the aggregate, required to enable the Operating Company
and the Operating Subs to conduct their operations (in all material
respects as contemplated by the Registration Statement and the Prospectus),
subject to the conditions, reservations and limitations contained in the
Contribution Documents and those set forth in the Registration Statement
and the Prospectus. The Operating Company and the Operating Subs, upon
execution and
15
delivery of the Contribution Documents, succeeded or will succeed in all
material respects to the business, assets, properties, liabilities and
operations reflected by the pro forma financial statements of the
Partnership, except as disclosed in the Prospectus and the Contribution
Documents.
(cc) PERMITS. Each of the Partnership Entities has, or at the Closing
Date will have, such permits, consents, licenses, franchises, certificates
and authorizations of governmental or regulatory authorities ("permits") as
are necessary to own its properties and to conduct its business in the
manner described in the Prospectus, subject to such qualifications as may
be set forth in the Registration Statement and the Prospectus and except
for such permits that, if not obtained, would not, individually or in the
aggregate, have a Material Adverse Effect; each of the Partnership Entities
has, or at the Closing Date will have, fulfilled and performed all its
material obligations with respect to such permits which are due to have
been fulfilled and performed by such date and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any impairment of the rights of the
holder of any such permit, except for such revocations, terminations and
impairments that would not, individually or in the aggregate, have a
Material Adverse Effect; and, except as described in the Registration
Statement and the Prospectus, none of such permits contains any restriction
that is materially burdensome to the Partnership Entities taken as a whole.
(dd) BOOKS AND RECORDS. The Partnership (i) makes and keeps books,
records and accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of assets and (ii) maintains
systems of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ee) TAX RETURNS. Each of the MarkWest Parties has filed (or has
obtained extensions with respect to) all material federal, state and
foreign income and franchise tax returns required to be filed through the
date hereof, which returns are complete and correct in all material
respects, and has timely paid all taxes shown to be due pursuant to such
returns, other than those (i) which are being contested in good faith and
for which adequate reserves have been established in accordance with
generally accepted accounting principles or (ii) which, if not paid, would
not have a Material Adverse Effect.
(ff) INVESTMENT COMPANY/PUBLIC UTILITY HOLDING COMPANY. None of the
MarkWest Parties is now, and after sale of the Units to be sold by the
Partnership hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds," none of
the MarkWest Parties will be, (i)
16
an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or (ii) a "public utility company," "holding company" or
a "subsidiary company" of a "holding company", under the Public Utility
Holding Company Act of 1935, as amended.
(gg) NO ENVIRONMENTAL PROBLEMS. The MarkWest Parties (i) are in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety
and the environment or imposing liability or standards of conduct
concerning any Hazardous Material (as hereinafter defined) ("ENVIRONMENTAL
LAWS"), (ii) have received all permits required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit and (iv) do not
have any liability in connection with the release into the environment of
any Hazardous Materials, except where such noncompliance with Environmental
Laws, failure to receive required permits, or failure to comply with the
terms and conditions of such permits or liability in connection with such
releases would not, individually or in the aggregate, have a Material
Adverse Effect. The term "Hazardous Material" means (A) any "hazardous
substance" as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (B) any "hazardous
waste" as defined in the Resource Conservation and Recovery Act, as
amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material, waste or substance regulated under or within the
meaning of any other Environmental Law.
(hh) NO LABOR DISPUTE. No material labor dispute with the employees of
the MarkWest Parties exists or, to the knowledge of the MarkWest Parties,
is imminent.
(ii) INSURANCE. The MarkWest Parties maintain insurance covering their
properties, operations, personnel and businesses against such losses and
risks as are reasonably adequate to protect them and their businesses in a
manner consistent with other businesses similarly situated. None of the
MarkWest Parties has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will
have to be made in order to continue such insurance, and all such insurance
is outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the Closing Date.
(jj) LITIGATION. Except as described in the Prospectus, there is (i)
no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or,
to the knowledge of the MarkWest Parties, threatened, to which any of the
MarkWest Parties is or may be a party or to which the business or property
of any of the MarkWest Parties is or may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or proposed by any governmental agency and (iii) no
injunction, restraining order or order of any nature issued by a federal or
state court or foreign court of competent jurisdiction to which any of the
MarkWest Parties is or may be subject, that, in the case of
17
clauses (i), (ii) and (iii) above, is reasonably likely to (A) individually
or in the aggregate have a Material Adverse Effect, (B) prevent or result
in the suspension of the offering and issuance of the Units, or (C) in any
manner draw into question the validity of this Agreement or any Operative
Agreement.
(kk) PRIVATE PLACEMENT. Each of the (i) sale and issuance of the
Subordinated Units to MarkWest and MW Michigan and the Incentive
Distribution Rights to the General Partner pursuant to the Partnership
Agreement and (ii) the sale of the Subordinated Units to the Management
Group by MarkWest are exempt from the registration requirements of the 1933
Act and the securities laws of any state having jurisdiction with respect
thereto.
(ll) NO DISTRIBUTION OF OTHER OFFERING MATERIALS. None of the MarkWest
Parties have distributed and, prior to the later to occur of (i) the
Closing Date and (ii) completion of the distribution of the Units, will not
distribute, any prospectus (as defined under the 0000 Xxx) in connection
with the offering and sale of the Units other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or other materials,
if any, permitted by the 1933 Act, including Rule 134 of the 1933 Act Rules
and Regulations.
(mm) LISTING. The Units have been approved for listing on the American
Stock Exchange, subject only to official notice of issuance.
(nn) DIRECTED UNIT SALES. None of the Directed Units (as defined in
Section 5(o) below) distributed in connection with the Directed Unit
Program (as defined in Section 5(o) below) will be offered or sold outside
of the United States.
Any certificate signed by any officer of any MarkWest Party and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by such MarkWest Party to each Underwriter as
to the matters covered thereby.
5. ADDITIONAL COVENANTS. The MarkWest Parties covenant and agree with the
several Underwriters that:
(a) The Partnership will timely transmit copies of the Prospectus, and any
amendments or supplements thereto, to the SEC for filing pursuant to Rule 424(b)
of the 1933 Act Rules and Regulations.
(b) The Partnership will deliver to each of the Underwriters, and to
counsel for the Underwriters (i) a signed copy of the Registration Statement as
originally filed, including copies of exhibits thereto, of any amendments and
supplements to the Registration Statement and (ii) a signed copy of each consent
and certificate included in, or filed as an exhibit to, the Registration
Statement as so amended or supplemented; the Partnership will deliver to the
Underwriters as soon as practicable after the date of this Agreement as many
copies of the Prospectus as the Underwriters may reasonably request for the
purposes contemplated by the 1933 Act; if there is a
18
post-effective amendment to the Registration Statement that is not effective
under the 1933 Act, the Partnership will use its best efforts to cause the
post-effective amendment to the Registration Statement to become effective as
promptly as possible, and it will notify you, promptly after it shall receive
notice thereof, of the time when the post-effective amendment to the
Registration Statement has become effective; the Partnership will promptly
advise the Underwriters of any request of the SEC for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, and of the issuance by the SEC or any state or other jurisdiction
or other regulatory body of any stop order under the 1933 Act or other order
suspending the effectiveness of the Registration Statement (as amended or
supplemented) or preventing or suspending the use of the Preliminary Prospectus
or the Prospectus or suspending the qualification or registration of the Units
for offering or sale in any jurisdiction, and of the institution or threat of
any proceedings therefor, of which the Partnership shall have received notice or
otherwise have knowledge prior to the completion of the distribution of the
Units; and the Partnership will use its best efforts to prevent the issuance of
any such stop order or other order and, if issued, to secure the prompt removal
thereof.
(c) The Partnership will not file any amendment or supplement to the
Registration Statement, the Prospectus (or any other prospectus relating to the
Units filed pursuant to Rule 424(b) of the 1933 Act Rules and Regulations that
differs from the Prospectus as filed pursuant to such Rule 424(b)), of which the
Underwriters shall not previously have been advised or to which the Underwriters
shall have reasonably objected in writing after being so advised unless the
Partnership shall have determined based upon the advice of counsel that such
amendment or supplement is required by law; and the Partnership will promptly
notify you after it shall have received notice thereof of the time when any
amendment to the Registration Statement becomes effective or when any supplement
to the Prospectus has been filed.
(d) During the period when a prospectus relating to any of the Units is
required to be delivered under the 1933 Act by any Underwriter or dealer, the
Partnership will comply, at its own expense, with all requirements imposed by
the 1933 Act and the 1933 Act Rules and Regulations, so far as necessary to
permit the continuance of sales of or dealing in the Units during such period in
accordance with the provisions hereof and as contemplated by the Prospectus.
(e) If, during the period when a prospectus relating to any of the Units
is required to be delivered under the 1933 Act by any Underwriter or dealer, (i)
any event relating to or affecting the Partnership or of which the Partnership
shall be advised in writing by the Underwriters shall occur as a result of
which, in the opinion of the Partnership or the counsel for the Underwriters,
the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading or (ii) it shall be necessary to amend or
supplement the Registration Statement or the Prospectus to comply with the 1933
Act, the 1933 Act Rules and Regulations, the 1934 Act or the 1934 Act Rules and
Regulations, the Partnership will forthwith at its expense prepare and file with
the SEC, and furnish to the Underwriters a reasonable number of copies of, such
amendment or supplement or other filing that will correct such statement or
omission or effect such compliance.
19
(f) During the period when a prospectus relating to any of the Units is
required to be delivered under the 1933 Act by any Underwriter or dealer, the
Partnership will furnish such proper information as may be lawfully required and
otherwise cooperate with you in qualifying the Units for offer and sale under
the securities or blue sky laws of such jurisdictions as the Underwriters may
reasonably designate and will file and make such statements or reports as are or
may be reasonably necessary; PROVIDED, HOWEVER, that the Partnership shall not
be required to qualify as a foreign corporation or to qualify as a dealer in
securities or to file a general consent to service of process under the laws of
any jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of the
1933 Act Rules and Regulations, the Partnership will make generally available to
its security holders, an earning statement (which need not be audited) in
reasonable detail covering the 12-month period beginning not later than the
first day of the month next succeeding the month in which occurred the effective
date (within the meaning of Rule 158) of the Registration Statement as soon as
practicable after the end of such period.
(h) The Partnership will furnish to its security holders annual reports
containing financial statements audited by independent public accountants and
quarterly reports containing financial statements and financial information
which may be unaudited. The Partnership will, for a period of two years from the
Closing Date, furnish or make available to the Underwriters a copy of each
annual report, quarterly report, current report and all other documents, reports
and information furnished by the Partnership to holders of Units or filed with
any securities exchange or market pursuant to the requirements of such exchange
or market or with the SEC pursuant to the 1933 Act or the 1934 Act. The
Partnership will deliver to the Underwriters similar reports with respect to any
significant subsidiaries, as that term is defined in the 1933 Act Rules and
Regulations, which are not consolidated in the Partnership's financial
statements. Any report, document or other information required to be furnished
under this paragraph (h) shall be furnished as soon as practicable after such
report, document or information becomes publicly available.
(i) The Partnership and the General Partner will not, during the 180 days
after the date of this prospectus, without the prior written consent of X.X.
Xxxxxxx & Sons, Inc., directly or indirectly, offer for sale, contract to sell,
sell, distribute, grant any option, right or warrant to purchase, pledge,
hypothecate or otherwise dispose of any Common Units, any securities convertible
into, or exercisable or exchangeable for, Common Units (other than the
Subordinated Units) or any other rights to acquire such Common Units, other than
pursuant to employee benefit plans as in existence as of the date of the
Prospectus.
(j) The Partnership will apply the proceeds from the sale of the Units as
set forth in the description under "Use of Proceeds" in the Prospectus.
(k) The Partnership will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Units under the 1933 Act.
20
(l) The Partnership will use its best efforts to obtain approval for, and
maintain the listing of the Units on, the American Stock Exchange.
(m) The Partnership will cause its directors and officers to furnish to
you, on or prior to the date of this Agreement, a letter or letters, in form and
substance satisfactory to counsel for the Underwriters, pursuant to which each
such person shall agree not to directly or indirectly, offer for sale, contract
to sell, sell, distribute, grant any option, right or warrant to purchase,
pledge, hypothecate or otherwise dispose of any Common Units, or any securities
convertible into, or exercisable or exchangeable for, Common Units (other than
Subordinated Units) or any other rights to acquire such Common Units, during the
180 days after the date of this prospectus, without the prior written consent of
X.X. Xxxxxxx & Sons, Inc.
(n) If the Partnership elects to rely on Rule 462(b) under the 1933 Act,
the Partnership shall both file an Abbreviated Registration Statement with the
SEC in compliance with Rule 462(b) and pay the applicable fees in accordance
with Rule 111 of the 1933 Act by the earlier of (i) 10:00 p.m., New York time,
on the date of this Agreement, and (ii) the time that confirmations are given or
sent, as specified by Rule 462(b)(2).
(o) It is understood that up to [_______] of the Firm Units (the "DIRECTED
UNITS") will initially be reserved by the Underwriters for offer and sale to
officers, directors, employees and persons having business relations with the
MarkWest Parties ("DIRECTED UNIT PARTICIPANTS") upon the terms and conditions
set forth in the prospectus and in accordance with the rules and regulations of
the National Association of Securities Dealers, Inc. (the "DIRECTED UNIT
PROGRAM"). Under no circumstances will X.X. Xxxxxxx & Sons, Inc. or any
Underwriter be liable to the MarkWest Parties or to any Directed Unit
Participant for any action taken or omitted to be taken in good faith in
connection with such Directed Unit Program. To the extent that any Directed
Units are not affirmatively reconfirmed for purchase by any Directed Unit
Participant on or immediately after the date of this Agreement, such Directed
Units may be offered to the public as part of the public offering contemplated
hereby.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase and pay for the Units, as provided herein, shall be
subject to the accuracy, as of the date hereof and as of the Closing Date (and,
if applicable, the Option Closing Date), of the representations and warranties
of the MarkWest Parties contained herein, to the performance by the MarkWest
Parties of their covenants and obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement and all post-effective amendments thereto
shall have become effective not later than 5:30 p.m., New York time, on the date
hereof, or, with your consent, at a later date and time, not later than 1:00
p.m., New York time, on the first business day following the date hereof, or at
such later date and time as may be approved by the Underwriters; if the
Partnership has elected to rely on Rule 462(b) under the 1933 Act, the
Abbreviated Registration Statement shall have become effective not later than
the earlier of (x) 10:00 p.m. New York time, on the date hereof, or (y) at such
later date and time as may be
21
approved by the Underwriters. All filings required by Rule 424 and Rule 430A of
the 1933 Act Rules and Regulations shall have been made. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Partnership or any Underwriter, threatened or contemplated by
the SEC, and any request of the SEC for additional information (to be included
in the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Underwriters.
(b) No Underwriter shall have advised the Partnership on or prior to the
Closing Date (and, if applicable, the Option Closing Date), that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing Date), you
shall have received the opinion of Xxxxxx & Xxxxxx L.L.P. counsel for the
Partnership, addressed to you and dated the Closing Date (and, if applicable,
the Option Closing Date), to the effect that:
(i) The Partnership has been duly formed and is validly existing in
good standing as a limited partnership under the Delaware LP Act with all
necessary partnership power and authority to own or lease its properties,
to assume the liabilities being assumed by it pursuant to the Contribution
Documents and to conduct its business in all material respects as described
in the Registration Statement and the Prospectus. The Partnership is duly
registered or qualified as a foreign limited partnership for the
transaction of business under the laws of the jurisdictions set forth on
EXHIBIT A to this Agreement.
(ii) Each of the General Partner, the Operating Company and the
Operating Subs has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware LLC Act with all
necessary limited liability company power and authority to own or lease its
properties, to assume the liabilities being assumed by it pursuant to the
Contribution Documents and to conduct its business in all material respects
as described in the Registration Statement and the Prospectus. The General
Partner has all necessary limited liability company power and authority to
act as general partner of the Partnership. Each of the General Partner, the
Operating Company and the Operating Subs is duly registered or qualified as
a foreign limited liability company for the transaction or business under
the laws of the jurisdictions set forth on EXHIBIT A to this Agreement.
(iii) MarkWest has been duly incorporated and is validly existing in
good standing as a corporation under the DGCL with all necessary corporate
power and authority to own or lease its properties and to conduct its
business in all material respects as described in the Registration
Statement and the Prospectus.
22
(iv) The General Partner is the sole general partner of the
Partnership. The General Partner owns a 2% general partner interest in the
Partnership; such general partner interests have been duly authorized and
validly issued in accordance with the Partnership Agreement; and the
General Partner owns its general partner interest free and clear of all
liens, encumbrances, security interests, charges or claims (i) in respect
of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the General Partner as debtor is on file in the
office of the Secretary of State of the State of Delaware or (ii) otherwise
known to such counsel, without independent investigation, other than those
created by or arising under the Delaware LP Act.
(v) MarkWest owns __________ Subordinated Units, MW Michigan owns
___________ Subordinated Units, the Management Groups owns ________
Subordinated Units as set forth on Exhibit B to this Agreement and the
General Partner owns all of the Incentive Distribution Rights; all of such
Subordinated Units and the limited partner interests represented thereby
and the Incentive Distribution Rights have been duly authorized and validly
issued in accordance with the Partnership Agreement, and are fully paid (to
the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in
the Prospectus under the caption "The Partnership Agreement--Limited
Liability"); and each of MarkWest, MW Michigan and the Management Group
will owns its respective Subordinated Units and the General Partner will
own the Incentive Distribution Rights, in each case, free and clear of all
liens, encumbrances (except restrictions on transferability as described in
the Prospectus), security interests, charges or claims (i) in respect of
which a financing statement under the Uniform Commercial Code of the State
of Delaware naming MarkWest, MW Michigan, any member of the Management
Group or the General Partner as debtor is on file in the office of the
Secretary of State of the State of Delaware or (ii) otherwise known to such
counsel, without independent investigation, other than those created by or
arising under the Delaware LP Act.
(vi) The Units to be issued and sold to the Underwriters by the
Partnership pursuant to this Agreement and the limited partner interests
represented thereby have been duly authorized by the Partnership Agreement
and, when issued and delivered to the Underwriters against payment therefor
in accordance with the terms hereof, will be validly issued, fully paid (to
the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in
the Prospectus under the caption "The Partnership Agreement--Limited
Liability"); and other than the Subordinated Units and the Incentive
Distribution Rights, the Units will be the only limited partner interests
of the Partnership issued and outstanding at the Closing Date.
(vii) MarkWest owns of record 90% of the issued and outstanding
membership interests of the General Partner and the Management Group owns
of record 10% of the issued and outstanding membership interests of the
General Partner as set forth on Exhibit B to this Agreement. Such
membership interests have been duly authorized and
23
validly issued and are fully paid and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); and MarkWest and the Management Group own such membership interests
free and clear of all liens, encumbrances, security interests, charges or
claims (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming MarkWest or any member of
the Management Group as debtor is on file in the office of the Secretary of
State of the State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, other than those created by or arising
under the Delaware LLC Act.
(viii) The Partnership owns a 100% membership interest in the
Operating Company; such membership interest has been duly authorized and
validly issued in accordance with the Operating Company LLC Agreement and
is fully paid (to the extent required under the Operating Company LLC
Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in the Prospectus under the caption "The
Partnership Agreement--Limited Liability"); and the Partnership will own
such membership interest free and clear of all liens, encumbrances,
security interests, charges or claims (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming
the Partnership as debtor is on file in the office of the Secretary of
State of the State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, other than those created by or arising
under the Delaware LP Act.
(ix) The Operating Company owns of record 100% of the issued and
outstanding membership interests in each of the Operating Subs; such
membership interests have been duly authorized and validly issued in
accordance with the Operating Subs LLC Agreements and are fully paid (to
the extent required under the Operating Subs LLC Agreements) and
nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and the Operating Company owns such
membership interests free and clear of all liens, encumbrances, security
interests, charges or claims (i) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware naming the
Operating Company as debtor is on file in the office of the Secretary of
State of the State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, other than those created by or arising
under the Delaware LLC Act.
(x) Except as described in the Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, (i) any limited partner interests of the
Partnership or (ii) any membership interests of the General Partner, the
Operating Company or the Operating Subs pursuant to the Partnership
Agreement, the General Partner LLC Agreement, the Operating Company LLC
Agreement or the Operating Subs LLC Agreements, respectively, or, to the
knowledge of such counsel after due inquiry, any other agreement or
instrument to which such entities are a party or by which any of them may
be bound. To the knowledge of such counsel, neither the filing of the
Registration Statement nor the offering or sale of
24
the Units as contemplated by this Agreement gives rise to any rights for or
relating to the registration of any Units or other securities of the
Partnership, other than as have been waived. To such counsel's knowledge
after due inquiry, except as described in the Prospectus, there are no
outstanding options or warrants to purchase any partnership or any
membership interests in any Partnership Entity.
(xi) Each of the Operative Agreements to which any of the MarkWest
Parties is a party has been duly authorized and validly executed and
delivered by such entity that is a party thereto. Each of the Operative
Agreements (other than any Operative Agreements governed by law other than
Texas, New York or Delaware law, as to which such counsel need not express
any opinion) constitutes a valid and legally binding agreement of the
MarkWest Parties that are parties thereto, enforceable against such entity
in accordance with its respective terms, subject to (i) applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (ii) public policy,
applicable law relating to the fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(xii) The Partnership has all requisite power and authority to issue,
sell and deliver (i) the Units, in accordance with and upon the terms and
conditions set forth in this Agreement, the Partnership Agreement, the
Registration Statement and the Prospectus and (ii) the Subordinated Units
and Incentive Distribution Rights, in accordance with and upon the terms
and conditions set forth in the Partnership Agreement and the Contribution
Documents.
(xiii) This Agreement has been duly executed and delivered by each of
the MarkWest Parties.
(xiv) None of the offering, issuance and sale by the Partnership of
the Units, the execution, delivery and performance of this Agreement or the
Operative Agreements (other than any Operative Agreement governed by law
other than Texas, New York or Delaware law) by the MarkWest Parties that
are parties thereto, or the consummation of the transactions contemplated
hereby or thereby (including the Transactions) (i) constitutes or will
constitute a violation of the agreement of limited partnership, limited
liability company agreement, certificate or articles of incorporation or
bylaws of any of the MarkWest Parties, (ii) constitutes or will constitute
a breach or violation of, or a default (or an event that, with notice or
lapse of time or both, would constitute such default) under, any Operative
Agreement (other than any Operative Agreement governed by law other than
Texas, New York or Delaware law), (iii) violates or will violate the
Delaware LP Act, the Delaware LLC Act, the DGCL, Texas law, New York law or
federal law or (iv) results or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of any of the
MarkWest Parties, which conflicts, breaches, violations, defaults or liens,
in the case of clauses (ii), (iii), or (iv) would, individually or in the
aggregate, have a material adverse effect on the condition
25
(financial or other), business, assets or results of operations of the
Partnership Entities taken as a whole.
(xv) No permit, consent, approval, authorization, order, registration,
filing or qualification ("consent") of or with any federal or Delaware
court, governmental agency or body having jurisdiction over any of the
MarkWest Parties is required for the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of this
Agreement or the Operative Agreements (other than any Operative Agreement
governed by law other than Texas, New York or Delaware law) by the MarkWest
Parties that are party thereto or the consummation by the MarkWest Parties
of the transactions contemplated by this Agreement, except (i) for such
consents required under the 1933 Act, the 1934 Act and state securities or
"Blue Sky" laws, as to which such counsel need not express any opinion,
(ii) for such consents which have been obtained or made, (iii) for such
consents which (A) are of a routine or administrative nature, (B) are not
customarily obtained or made prior to the consummation of transactions such
as those contemplated by this Agreement and the Operative Agreements and
(C) are expected in the reasonable judgment of the General Partner to be
obtained or made in the ordinary course of business subsequent to the
consummation of the Transactions, (iv) for such consents which, if not
obtained or made, would not, individually or in the aggregate, have a
Material Adverse Effect or (v) as disclosed in the Prospectus.
(xvi) The statements in the Registration Statement and Prospectus
under the captions "Cash Distribution Policy," "Certain Relationships and
Related Transactions," "Conflicts of Interest and Fiduciary
Responsibilities," "Description of the Common Units" and "The Partnership
Agreement" fairly describe in all material respects the portions of the
documents addressed thereby and, insofar as they purport to constitute
summaries of law or legal conclusions, are accurate in all material
respects; the description of the statutes and regulations set forth in the
Registration Statement and Prospectus under the caption
"Business--Environmental Matters" fairly describe in all material respects
the portions of the statutes and regulations addressed thereby; and the
Common Units, the Subordinated Units and the Incentive Distribution Rights
conform in all material respects to the descriptions thereof contained in
the Registration Statement and the Prospectus under the captions
"Prospectus Summary--The Offering," "Cash Distribution Policy,"
"Description of the Common Units" and "The Partnership Agreement."
(xvii) The opinion of Xxxxxx & Xxxxxx L.L.P. that is filed as Exhibit
8.1 to the Registration Statement is confirmed and the Underwriters may
rely upon such opinion as if it were addressed to them.
(xviii) The Registration Statement was declared effective under the
1933 Act on [________, 2002]; to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened by the Commission; and any required filing of
26
the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by such Rule.
(xix) The Registration Statement and the Prospectus (except for the
financial statements and the notes and the schedules thereto, and the other
financial, statistical and accounting data included in the Registration
Statement or the Prospectus, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements
of the 1933 Act and the rules and regulations promulgated thereunder.
(xx) To the knowledge of such counsel, (i) there are no legal or
governmental proceedings pending or threatened against any of the MarkWest
Parties or to which any of the MarkWest Parties is a party or to which any
of their respective properties is subject that are required to be described
in the Prospectus but are not so described as required and (ii) there are
no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not
described or filed as required by the 1933 Act.
(xxi) None of the MarkWest Parties is an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(xxii) None of the Partnership, the General Partner or the Operating
Company is, or solely as a result of the Transactions will be, a "public
utility company" or a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(xxiii) Each of (i) the offer, sale and issuance of the Subordinated
Units to MarkWest and MW Michigan and the Incentive Distribution Rights to
the General Partner pursuant to the Partnership Agreement and (ii) the sale
of the Subordinated Units to the Management Group by MarkWest are exempt
from the registration requirements of the 1933 Act.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the MarkWest Parties and
the independent public accountants of the Partnership and the Underwriters, at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed, and although such counsel has not independently
verified, is not passing on, and is not assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in, the
Registration Statement and the Prospectus (except to the extent specified in the
foregoing opinion), based on the foregoing, no facts have come to such counsel's
attention that causes such counsel to believe that the Registration Statement
(other than (i) the financial statements included therein, including the notes
and schedules thereto and the auditors' reports thereon, and (ii) the other
financial data included therein, as to which such counsel need not comment), as
of its effective date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
27
therein or necessary to make the statements therein not misleading, or that the
Prospectus (other than (i) the financial statements included therein, including
the notes and schedules thereto and the auditors' reports thereon, and (ii) the
other financial data included therein, as to which such counsel need not
comment), as of its issue date and the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of matters
of fact upon representations of the MarkWest Parties set forth in this Agreement
and upon certificates of officers and employees of the MarkWest Parties and upon
information obtained from public officials, (B) assume that all documents
submitted to them as originals are authentic, that all copies submitted to them
conform to the originals thereof, and that the signatures on all documents
examined by them are genuine, (C) state that their opinion is limited to federal
laws, the Delaware LP Act, the Delaware LLC Act, the DGCL, Texas law and the
contract law of the State of New York, (D) state that they express no opinion
with respect to the title of any of the MarkWest Parties to any of their
respective real or personal property purported to be transferred by the
Contribution Documents nor with respect to the accuracy or descriptions of real
or personal property, and (E) state that they express no opinion with respect to
state or local taxes or tax statutes to which any of the limited partners of the
Partnership or any of the other MarkWest Parties may be subject.
(d) On the Closing Date (and, if applicable, the Option Closing Date), you
shall have received the opinion of ____________, counsel for the Partnership,
addressed to you and dated the Closing Date (and, if applicable, the Option
Closing Date), to the effect that:
(i) MW Michigan has been duly incorporated and is validly existing in
good standing as a corporation under the CBCA with all necessary corporate
power and authority to own or lease its properties and to conduct its
business in all material respects as described in the Registration
Statement and the Prospectus.
(ii) MarkWest owns of record 100% of the issued and outstanding
capital stock of MW Michigan.
(iii) This Agreement has been duly executed and delivered by MW
Michigan.
(iv) Each of the Operative Agreements to which MW Michigan is a party
has been duly authorized and validly executed and delivered by MW Michigan.
Each of the Operative Agreements of which MW Michigan is a party
constitutes a valid and legally binding agreement of MW Michigan,
enforceable against MW Michigan in accordance with its respective terms,
subject to (i) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and (ii) public policy,
28
applicable law relating to the fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(v) Each of the Colorado Operative Agreements constitutes a valid and
legally binding agreement of the MarkWest Parties that are parties thereto,
enforceable against such entity in accordance with its respective terms,
subject to (i) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and (ii) public policy, applicable law relating to the fiduciary
duties and indemnification and an implied covenant of good faith and fair
dealing.
(vi) None of the execution, delivery and performance of this Agreement
or the Operative Agreements to which MW Michigan is a party by MW Michigan,
or the consummation of the transactions contemplated hereby or thereby
(including the Transactions) (i) constitutes or will constitute a violation
of the certificate or articles of incorporation or bylaws of MW Michigan,
(ii) constitutes or will constitute a breach or violation of, or a default
(or an event which, with notice or lapse of time or both, would constitute
such default) under, any Operative Agreement, (iii) violates or will
violate Colorado or federal law or (iv) results or will result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of MW Michigan, which breaches, violations, defaults or liens, in
the case of clauses (ii), (iii), or (iv) would, individually or in the
aggregate, have a material adverse effect on the condition (financial or
other), business or results of operations of the Partnership Entities.
(vii) None of the execution, delivery and performance of the Colorado
Operative Agreements by the MarkWest Parties that are parties thereto, or
the consummation of the transactions contemplated hereby or thereby
(including the Transactions) (i) constitutes or will constitute a violation
of the agreement of limited partnership, limited liability company
agreement, certificate or articles of incorporation, bylaws or other
organizational documents of any of the MarkWest Parties, (ii) constitutes
or will constitute a breach or violation of, or a default (or an event
which, with notice or lapse of time or both, would constitute such default)
under, any Operative Agreement, (iii) violates or will violate the Delaware
LP Act, the Delaware LLC Act, the DGCL, Colorado or federal law or (iv)
results or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the MarkWest Parties,
which breaches, violations, defaults or liens, in the case of clauses (ii),
(iii), or (iv) would, individually or in the aggregate, have a material
adverse effect on the condition (financial or other), business or results
of operations of the Partnership Entities.
(viii) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any Colorado
court, governmental agency or body having jurisdiction over MW Michigan is
required for the offering, issuance and sale by the Partnership of the
Units, the execution, delivery and performance of this Agreement or the
Operative Agreements to which MW Michigan is a party by MW Michigan or the
29
consummation by MW Michigan of the transactions contemplated by this
Agreement, except (i) for such consents required under the 1933 Act, the
1934 Act and state securities or "Blue Sky" laws, as to which such counsel
need not express any opinion, (ii) for such consents which have been
obtained or made, (iii) for such consents which (A) are of a routine or
administrative nature, (B) are not customarily obtained or made prior to
the consummation of transactions such as those contemplated by this
Agreement and the Operative Agreements and (C) are expected in the
reasonable judgment of the General Partner to be obtained or made in the
ordinary course of business subsequent to the consummation of the
Transactions, (iv) for such consents which, if not obtained or made, would
not, individually or in the aggregate, have a Material Adverse Effect or
(v) as disclosed in the Prospectus.
(ix) No permit, consent, approval, authorization, order, registration,
filing or qualification ("consent") of or with any federal, Delaware or
Colorado court, governmental agency or body having jurisdiction over any of
the MarkWest Parties is required for the execution, delivery and
performance of the Colorado Operative Agreements by the MarkWest Parties
that are party thereto, except (i) for such consents which have been
obtained or made, (ii) for such consents which (A) are of a routine or
administrative nature, (B) are not customarily obtained or made prior to
the consummation of transactions such as those contemplated by this
Agreement and the Operative Agreements and (C) are expected in the
reasonable judgment of the General Partner to be obtained or made in the
ordinary course of business subsequent to the consummation of the
Transactions, (iii) for such consents which, if not obtained or made, would
not, individually or in the aggregate, have a Material Adverse Effect or
(iv) as disclosed in the Prospectus.
(x) To the knowledge of such counsel, (i) there are no legal or
governmental proceedings pending or threatened against any of the MarkWest
Parties or to which any of the MarkWest Parties is a party or to which any
of their respective properties is subject that are required to be described
in the Prospectus but are not so described as required and (ii) there are
no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not
described or filed as required by the 1933 Act.
In rendering such opinion, such counsel may (A) rely in respect of matters
of fact upon representations of the MarkWest Parties set forth in this Agreement
and upon certificates of officers and employees of the MarkWest Parties and upon
information obtained from public officials, (B) assume that all documents
submitted to them as originals are authentic, that all copies submitted to them
conform to the originals thereof, and that the signatures on all documents
examined by them are genuine, (C) state that their opinion is limited to federal
laws, the Delaware LP Act, the Delaware LLC Act, the DGCL and Colorado law, (D)
state that they express no opinion with respect to the title of any of the
MarkWest Parties to any of their respective real or personal property purported
to be transferred by the Contribution Documents nor with respect to the accuracy
or descriptions of real or personal property, and (E) state that
30
they express no opinion with respect to state or local taxes or tax
statutes to which any of the limited partners of the Partnership or any of
the other MarkWest Parties may be subject.
(e) On the Closing Date, you shall have received the opinion of each
of [________], opining as to the law of Michigan; [___________], opining as
to the law of West Virginia and [________________], opining as to the law
of Kentucky, addressed to you and dated the Closing Date (and, if
applicable, the Option Closing Date), to the effect that:
(i) Each of [insert applicable MarkWest Parties] is duly
qualified or registered as a foreign limited liability company for the
transaction of business under the laws of [insert applicable state].
(ii) Each of [insert applicable MarkWest Parties] has all
requisite power and authority as a limited liability company or
limited partnership, as the case may be, under the laws of the State
of [insert applicable state] to own or lease its properties and to
conduct its business in the State of [insert applicable state] in each
case in all material respects to the same extent as described or
otherwise disclosed in the Prospectus with respect to the Partnership;
and upon the consummation of the Transactions (assuming that the
Partnership will not be liable under the laws of the State of Delaware
for the liabilities of the Operating Company or the Operating Subs and
assuming that the holders of Units will not be liable under the laws
of the State of Delaware for the liabilities of the Partnership, the
Operating Company or the Operating Subs), the Partnership will not be
liable under the laws of the State of [insert applicable state] for
the liabilities of the Operating Company or the Operating Subs, and
the holders of Units will not be liable under the laws of the State of
[insert applicable state] for the liabilities of the Partnership,
except to the same extent as under the laws of the State of Delaware.
(iii) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any
court, governmental agency or body of the State of [insert applicable
state], having jurisdiction over the MarkWest Parties or any of their
respective properties, is required for (i) the issuance and sale of
the Units by the Partnership, (ii) the execution and delivery by each
of the MarkWest Parties, and the performance by such entities of their
obligations under, the Operative Agreements to which they are a party,
or (iii) the conveyance of the properties located in the State of
[insert applicable state] purported to be conveyed to the respective
parties pursuant to the Contribution Documents, except (A) for such
consents required under the Securities Act, the Exchange Act and state
securities or "Blue Sky" laws, as to which such counsel need express
no opinion, (B) for such consents which have been obtained or made,
(C) for such consents which are (1) of a routine or administrative
nature, (2) not customarily obtained or made prior to the consummation
of transactions such as those contemplated under the Operative
Agreements, and (3) expected in the reasonable judgment of the General
Partner to be obtained or made in the ordinary course of business
subsequent to the consummation of the Transactions, (D) for such
consents which, if not obtained or made, would not, individually or in
the aggregate, have a material adverse effect upon the operations
conducted or to be conducted as described in the Prospectus in the
State of
31
[insert applicable state] by the Partnership Entities, taken as a
whole or (E) as disclosed in the Prospectus with respect to the
Partnership.
(iv) The execution, delivery and performance of the Conveyances
relating to the transfer of property in the State of [insert
applicable state] has not violated and will not violate any statute of
the State of [insert applicable state] or any rule, regulation or, to
such counsel's knowledge, any order of any agency of the State of
[insert applicable state] having jurisdiction over any of the MarkWest
Parties or any of their respective properties, except for any such
violations which, individually or in the aggregate, would not have a
material adverse effect on the holders of Units or the operations
conducted in the State of [insert applicable state] by the Partnership
Entities, taken as a whole.
(v) Each of the Conveyances is in a form legally sufficient as
between the parties thereto to convey to the transferee thereunder all
of the right, title and interest of the transferor stated therein in
and to the properties located in the State of [insert applicable
state], as described in the Conveyances, subject to the conditions,
reservations and limitations contained in the Conveyances, except
motor vehicles or other property requiring conveyance of certificated
title as to which the Conveyances are legally sufficient to compel
delivery of such certificated title.
(vi) Each of the deeds and real property assignments (including,
without limitation, the form of the exhibits and schedules thereto) is
in a form legally sufficient for recordation in the appropriate public
offices of the State of [insert applicable state], to the extent such
recordation is required to constitute notice to third parties that
title to the properties covered thereby is in the applicable
Partnership Entity, and, upon proper recordation of any such deeds and
real property assignments in the State of [insert applicable state],
will constitute notice to all third parties under the recordation
statutes of the State of [insert applicable state] concerning record
title to the assets covered thereby; recordation in the office of the
County Clerk of each county in which each of the applicable
Partnership Entity owns property is the appropriate public office in
the State of [insert applicable state] for the recordation of deeds,
assignments and other evidences of title evidencing interests in real
property located in such county.
(vii) To the knowledge of such counsel after due inquiry, each of
the MarkWest Parties has such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory
authorities ("permits") of the State of [insert applicable state] as
are necessary to own its properties and to conduct its business in the
state of [insert applicable state] in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus and except for such permits which, if not obtained, would
not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, to the knowledge of such counsel after
due inquiry, none of the MarkWest Parties has received any notice of
proceedings relating to the revocation or modification of any such
permits which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected
to have a Material Adverse Effect.
32
In rendering such opinions, such counsel shall state that it (1) relied in
respect of matters of fact upon certificates of officers and employees of the
MarkWest Parties and upon information obtained from public officials including,
without limitation, certificates of foreign qualification for each of the
MarkWest Parties provided by the Secretary of State of [insert applicable state]
dated as of a recent date, with respect to the opinion in paragraphs (i) and
(ii) above, and (2) assumed that all documents submitted to such counsel as
originals are authentic, and all copies submitted to such counsel conform to the
originals thereof, and that the signatures on all documents examined by such
counsel are genuine.
The opinions expressed by such counsel may be limited to the laws of the
State of [insert applicable state], excepting therefrom municipal and local
ordinances and regulations. Such counsel need not express an opinion with
respect to (i) title to any of the real or personal property, (ii) the accuracy
of descriptions or references to real or personal property, (iii) permits to own
or operate any real or personal property, or (iv) with respect to state or local
taxes or tax statutes including, without limitation, those to which any of the
limited partners of the MarkWest Parties may be subject.
In rendering such opinion, such counsel shall state that each of the
MarkWest Parties, Xxxxxx & Xxxxxx L.L.P. and ___________________ are hereby
authorized to rely upon such opinion letter in connection with the Transactions
as if such opinion letter were addressed and delivered to each of them.
(f) You shall have received on the Closing Date (and, if applicable, the
Option Closing Date), from Xxxxx Xxxxx L.L.P., counsel to the Underwriters, such
opinion or opinions, dated the Closing Date (and, if applicable, the Option
Closing Date) with respect to such matters as you may reasonably require; and
the Partnership shall have furnished to such counsel such documents as they
reasonably request for the purposes of enabling them to review or pass on the
matters referred to in this Section 6 and in order to evidence the accuracy,
completeness and satisfaction of the representations, warranties and conditions
herein contained.
(g) You shall have received at or prior to the Closing Date from Xxxxx
Xxxxx L.L.P. a memorandum or memoranda, in form and substance satisfactory to
you, with respect to the qualification for offering and sale by the Underwriters
of the Units under state securities or Blue Sky laws of such jurisdictions as
the Underwriters may have designated to the Partnership.
(h) On the date of this Agreement and on the Closing Date (and, if
applicable, the Option Closing Date), you shall have received from
PricewaterhouseCoopers LLC, a letter or letters, dated the date of this
Agreement and the Closing Date (and, if applicable, the Option Closing Date),
respectively, in form and substance satisfactory to you, confirming that they
are independent public accountants with respect to the Partnership and the
General Partner within the meaning of the 1933 Act and 1933 Act Rules and
Regulations, and stating to the effect set forth in Schedule II hereto.
(i) Except as set forth in the Registration Statement and the Prospectus,
(i) none of the Partnership Entities shall have sustained since the date of the
latest audited financial
33
statements included in the Registration Statement and in the Prospectus any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; and (ii) subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), none of the MarkWest
Parties shall have incurred any liability or obligation, direct or contingent,
or entered into any transactions, and there shall not have been any change in
the capital stock or short-term or long-term debt of the Partnership Entities or
any change, or any development involving or which might reasonably be expected
to involve a prospective change in the condition (financial or other), net
worth, business, affairs, management, prospects, results of operations or cash
flow of the Partnership or its subsidiaries, the effect of which, in any such
case described in clause (i) or (ii), is in your judgment so material or adverse
as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Units being delivered on such Closing Date (and, if
applicable, the Option Closing Date) on the terms and in the manner contemplated
in the Prospectus.
(j) There shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the American Stock
Exchange or the establishing on such exchanges or market by the SEC or by such
exchanges or markets of minimum or maximum prices which are not in force and
effect on the date hereof; (ii) a suspension or material limitation in trading
in the Partnership's securities on the American Stock Exchange or the
establishing on such market by the SEC or by such market of minimum or maximum
prices which are not in force and effect on the date hereof; (iii) a general
moratorium on commercial banking activities declared by either federal or any
Missouri authorities; (iv) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, which in your judgment makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Units in the manner
contemplated in the Prospectus; or (v) any calamity or crisis, change in
national, international or world affairs, act of God, change in the
international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, the effect
of which on the financial markets of the United States is such as to make it in
your judgment impracticable or inadvisable to proceed with the public offering
or the delivery of the Units in the manner contemplated in the Prospectus.
(k) You shall have received (x) a certificate, dated the Closing Date
(and, if applicable, the Option Closing Date) and signed by chief executive
officer and the chief financial officer of the General Partner, in their
capacities as such, and (y) a certificate, dated the Closing Date (and, if
applicable, the Option Closing Date) and signed by the chief executive officer
and the chief financial officer of MarkWest, in their capacities as such,
stating that:
(i) the condition set forth in Section 6(a) has been fully satisfied;
(ii) they have carefully examined the Registration Statement and the
Prospectus as amended or supplemented and nothing has come to their
attention that would lead them to believe that either the Registration
Statement or the Prospectus, or
34
any amendment or supplement thereto as of their respective effective, issue
or filing dates, contained, and the Prospectus as amended or supplemented
and at such Closing Date, contains any untrue statement of a material fact,
or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iii) since the Effective Date, there has occurred no event required
to be set forth in an amendment or supplement to the Registration Statement
or the Prospectus which has not been so set forth;
(iv) all representations and warranties made herein by the MarkWest
Parties are true and correct at such Closing Date, with the same effect as
if made on and as of such Closing Date, and all agreements herein to be
performed or complied with by the MarkWest Parties on or prior to such
Closing Date have been duly performed and complied with by the MarkWest
Parties;
(v) each of the MarkWest Parties has performed all obligations
required to be performed by it pursuant to this Agreement;
(vi) no stop order has been issued;
(vii) the Units have been approved for listing on the American Stock
Exchange; and
(viii) covering such other matters as you may reasonably request.
(l) The MarkWest Parties shall not have failed, refused, or been unable,
at or prior to the Closing Date (and, if applicable, the Option Closing Date) to
have performed any agreement on their part to be performed or any of the
conditions herein contained and required to be performed or satisfied by them at
or prior to such Closing Date.
(m) The Partnership shall have furnished to you at the Closing Date (and,
if applicable, the Option Closing Date) such further information, opinions,
certificates, letters and documents as you may have reasonably requested.
(n) The American Stock Exchange shall have approved the units for listing,
subject only to official notice of issuance.
(o) You shall have received duly and validly executed letter agreements
referred to in Section 5(m) hereof.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and to Xxxxx Xxxxx L.L.P., counsel for the several
Underwriters. The Partnership will furnish you with such signed and conformed
copies of such opinions, certificates, letters and documents as you may request.
35
If any of the conditions specified above in this Section 6 shall not have
been satisfied at or prior to the Closing Date (and, if applicable, the Option
Closing Date) or waived by you in writing, this Agreement may be terminated by
you on notice to the Partnership.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The MarkWest Parties, jointly
and severally, will indemnify and hold harmless each Underwriter from and
against any losses, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the 1933 Act or otherwise, insofar as such
losses, damages or liabilities (or actions or claims in respect thereof) arise
out of or are based upon (i) an untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Prospectus or the Prospectus or
in any amendment or supplement thereto, or arise out of or are based upon any
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, and will reimburse each Underwriter for any legal or other
expenses incurred by such Underwriter in connection with investigating,
preparing, pursuing or defending against or appearing as a third party witness
in connection with any such loss, damage, liability or action or claim,
including, without limitation, any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to the indemnified party, as such expenses are
incurred (including such losses, damages, liabilities or expenses to the extent
of the aggregate amount paid in settlement of any such action or claim, provided
that (subject to Section 7(c) hereof) any such settlement is effected with the
written consent of the Partnership); PROVIDED, HOWEVER, that the MarkWest
Parties shall not be liable in any such case to the extent, but only to the
extent, that any such loss, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in the Preliminary Prospectus, the Registration Statement, the Prospectus
or any other prospectus relating to the Units, or any such amendment or
supplement, in reliance upon and in conformity with written information relating
to the Underwriters furnished to the Partnership by you or by any Underwriter
through you, expressly for use in the preparation thereof (as provided in
Section 13 hereof).
In connection with the offer and sale of the Directed Units, the MarkWest
Parties, jointly and severally, agree, promptly upon a request in writing, to
indemnify and hold harmless X.X. Xxxxxxx & Sons, Inc. and the other Underwriters
from and against any loss, claim, damage, expense, liability or action which (i)
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
approval of the MarkWest Parties for distribution to Directed Unit Participants
in connection with the Directed Unit Program or any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) arises out of the failure of
any Directed Unit Participant to pay for and accept delivery of Directed Units
that the Directed Unit Participant agreed to purchase or (iii) is otherwise
related to the Directed Unit Program, other than losses, claims, damages or
liabilities (or expenses
36
relating thereto) that are finally judicially determined to have resulted
directly from the bad faith or gross negligence or willful misconduct of X.X.
Xxxxxxx & Sons, Inc.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the MarkWest Parties from and against any losses, damages or
liabilities to which the MarkWest Parties may become subject, under the 1933 Act
or otherwise, insofar as such losses, damages or liabilities (or actions or
claims in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment or supplement thereto, or arise out of
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Prospectus or the Prospectus or in
any amendment or supplement thereto, or arise out of or are based upon any
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in the Preliminary Prospectus, the Registration Statement, the Prospectus
or any such amendment or supplement, in reliance upon and in conformity with
written information relating to the Underwriters furnished to the Partnership by
you or by any Underwriter through you, expressly for use in the preparation
thereof (as provided in Section 13 hereof), and will reimburse the MarkWest
Parties for any legal or other expenses incurred by the MarkWest Parties in
connection with investigating or defending any such action or claim as such
expenses are incurred (including such losses, damages, liabilities or expenses
to the extent of the aggregate amount paid in settlement of any such action or
claim, provided that (subject to Section 7(c) hereof) any such settlement is
effected with the written consent of the Underwriters).
(c) Promptly after receipt by an indemnified party under Section 7(a) or
7(b) hereof of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under Section 7(a) or 7(b) hereof, notify each such indemnifying party in
writing of the commencement thereof, but the failure so to notify such
indemnifying party shall not relieve such indemnifying party from any liability
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have to any such indemnified party
otherwise than under Section 7(a) or 7(b) hereof. In case any such action shall
be brought against any such indemnified party and it shall notify each
indemnifying party of the commencement thereof, each such indemnifying party
shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party under Section 7(a) or 7(b) hereof
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of such
indemnified party, be counsel to such indemnifying party), and, after notice
from such indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party under Section 7(a) or 7(b) hereof for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. The indemnified party shall have the right to employ its
own counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of counsel
by such
37
indemnified party at the expense of the indemnifying party has been authorized
by the indemnifying party, (ii) the indemnified party shall have been advised by
such counsel that there may be a conflict of interest between the indemnifying
party and the indemnified party in the conduct of the defense, or certain
aspects of the defense, of such action (in which case the indemnifying party
shall not have the right to direct the defense of such action with respect to
those matters or aspects of the defense on which a conflict exists or may exist
on behalf of the indemnified party) or (iii) the indemnifying party shall not in
fact have employed counsel reasonably satisfactory to such indemnified party to
assume the defense of such action, in any of which events such fees and expenses
to the extent applicable shall be borne, and shall be paid as incurred, by the
indemnifying party. If at any time such indemnified party shall have requested
such indemnifying party under Section 7(a) or 7(b) hereof to reimburse such
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a) or 7(b) hereof effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such indemnifying
party of such request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 45 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No such indemnifying party
shall, without the written consent of such indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not such
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any such indemnified party.
In no event shall such indemnifying parties be liable for the fees and expenses
of more than one counsel, including any local counsel, for all such indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
(d) If the indemnification provided for in this Section 7 is unavailable
to or insufficient to indemnify or hold harmless an indemnified party under
Section 7(a) or 7(b) hereof in respect of any losses, damages or liabilities (or
actions or claims in respect thereof) referred to therein, then each
indemnifying party under Section 7(a) or 7(b) hereof shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
damages or liabilities (or actions or claims in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
MarkWest Parties, on the one hand, and the Underwriters, on the other hand, from
the offering of the Units. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 7(c) hereof
and such indemnifying party was prejudiced in a material respect by such
failure, then each such indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault, as
applicable, of the MarkWest Parties, on the one hand, and the Underwriters, on
the other hand, in connection
38
with the statements or omissions that resulted in such losses, damages or
liabilities (or actions or claims in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by, as
applicable, the MarkWest Parties, on the one hand, and the Underwriters, on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the
Partnership bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault, as applicable, of the MarkWest Parties, on
the one hand, and the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the MarkWest Parties, on the one hand, or the
Underwriters, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The MarkWest Parties and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were determined
by PRO RATA allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 7(d). The amount
paid or payable by such an indemnified party as a result of the losses, damages
or liabilities (or actions or claims in respect thereof) referred to above in
this Section 7(d) shall be deemed to include any legal or other expenses
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section 7(d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Units underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters in this Section 7(d) to contribute are several in proportion to
their respective underwriting obligations with respect to the Units and not
joint.
(e) The obligations of the MarkWest Parties under this Section 7 shall be
in addition to any liability that the MarkWest Parties may otherwise have and
shall extend, upon the same terms and conditions, to each officer, director,
employee, agent or other representative and to each person, if any, who controls
any Underwriter within the meaning of the 1933 Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Partnership and the General
Partner who signed the Registration Statement and to each person, if any, who
controls the MarkWest Parties within the meaning of the 1933 Act.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. The respective
representations, warranties, agreements and statements of the MarkWest Parties
and the Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain operative and in
full force and effect regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, the MarkWest Parties or any of its officers,
39
directors or any controlling persons and shall survive delivery of and payment
for the Units hereunder.
9. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall default in
its obligation to purchase the Units which it has agreed to purchase hereunder,
you may in your discretion arrange for you or another party or other parties to
purchase such Units on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Units, then the Partnership shall be entitled to a further period of
thirty-six hours within which to procure another party or parties reasonably
satisfactory to you to purchase such Units on such terms. In the event that,
within the respective prescribed periods, you notify the Partnership that you
have so arranged for the purchase of such Units, or the Partnership notifies you
that it has so arranged for the purchase of such Units, you or the Partnership
shall have the right to postpone the Closing Date for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Partnership agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "UNDERWRITER" as used in this Agreement shall include
any persons substituted under this Section 9 with like effect as if such person
had originally been a party to this Agreement with respect to such Units.
(b) If, after giving effect to any arrangements for the purchase of the
Units of a defaulting Underwriter or Underwriters made by you and the
Partnership as provided in subsection (a) above, the aggregate number of Units
which remains unpurchased does not exceed one-eleventh of the total Units to be
sold on the Closing Date, then the Partnership shall have the right to require
each non-defaulting Underwriter to purchase the Units which such Underwriter
agreed to purchase hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Units which
such Underwriter agreed to purchase hereunder) of the Units of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Units of a defaulting Underwriter or Underwriters made by you and the
Partnership as provided in subsection (a) above, the number of Units which
remains unpurchased exceeds one-eleventh of the total Units to be sold on the
Closing Date, or if the Partnership shall not exercise the right described in
subsection (b) above to require the non-defaulting Underwriters to purchase
Units of the defaulting Underwriter or Underwriters, then this Agreement (or,
with respect to the Option Closing Date, the obligations of the Underwriters to
purchase and of the Partnership to sell the Option Units) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Partnership except for the expenses to be borne by the Partnership and the
Underwriters as provided in Section 11 hereof and the indemnity and contribution
agreements in Section 7 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
40
10. TERMINATION. (a) This Agreement may be terminated by you at any time
at or prior to the Closing Date by notice to the Partnership if any condition
specified in Section 6 hereof shall not have been satisfied on or prior to the
Closing Date. Any such termination shall be without liability of any party to
any other party except as provided in Sections 7 and 11 hereof.
(b) This Agreement also may be terminated by you, by notice to the
Partnership, as to any obligation of the Underwriters to purchase the Option
Units, if any condition specified in Section 6 hereof shall not have been
satisfied at or prior to the Option Closing Date or as provided in Section 9 of
this Agreement.
If you terminate this Agreement as provided in Sections 10(a) or 10(b), you
shall notify the Partnership by telephone or telegram, confirmed by letter.
11. COSTS AND EXPENSES. The Partnership will bear and pay the costs and
expenses incident to the registration of the Units and public offering thereof,
including, without limitation, (a) all expenses (including stock transfer taxes)
incurred in connection with the delivery to the several Underwriters of the
Units, the filing fees of the SEC, the fees and expenses of the Partnership's
counsel and accountants and the fees and expenses of counsel for the
Partnership, (b) the preparation, printing, filing, delivery and shipping of the
Registration Statement, each Preliminary Prospectus, the Prospectus and any
amendments or supplements thereto (except as otherwise expressly provided in
Section 5(d) hereof) and the printing, delivery and shipping of this Agreement
and other underwriting documents, including the Agreement Among Underwriters,
the Selected Dealer Agreement, Underwriters' Questionnaires and Powers of
Attorney and Blue Sky Memoranda, and any instruments or documents related to any
of the foregoing, (c) the furnishing of copies of such documents (except as
otherwise expressly provided in Section 5(d) hereof) to the Underwriters, (d)
the registration or qualification of the Units for offering and sale under the
securities laws of the various states and other jurisdictions, including the
fees and disbursements of counsel to the Underwriters relating to such
registration or qualification and in connection with preparing any Blue Sky
Memoranda or related analysis, (e) the filing fees of the NASD (if any) and fees
and disbursements of counsel to the Underwriters relating to any review of the
offering by the NASD, (f) all printing and engraving costs related to
preparation of the certificates for the Units, including transfer agent and
registrar fees, (g) all fees and expenses relating to the authorization of the
Units for trading on the American Stock Exchange; (h) all travel expenses,
including air fare and accommodation expenses, of representatives of the
Partnership in connection with the offering of the Units, and (i) all of the
other costs and expenses incident to the performance by the Partnership of the
registration and offering of the Units; provided, that (except as otherwise
provided in this Section 11) the Underwriters will bear and pay all of their own
costs and expenses, including the fees and expenses of the Underwriters'
counsel, the Underwriters' transportation expenses and any advertising costs and
expenses incurred by the Underwriters incident to the public offering of the
Units.
If this Agreement is terminated by you in accordance with the provisions of
Section 10(a) (other than pursuant to Section 9 or 6(j)), the Partnership shall
reimburse the Underwriters for all
41
of their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel to the Underwriters.
12. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, Managing Director,
Corporate Finance, facsimile number (000) 000-0000, with a copy to Xxxx Xxxxx,
Attention: General Counsel, facsimile number (000) 000-0000, or if sent to the
Partnership shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed to the Partnership at MarkWest Energy Partners, L.P.,
000 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, facsimile number
(000) 000-0000. Notice to any Underwriter pursuant to Section 7 shall be mailed,
delivered, sent by facsimile transmission, or telegraphed and confirmed to such
Underwriter's address as it appears in the Underwriters' Questionnaire furnished
in connection with the offering of the Units or as otherwise furnished to the
Partnership.
13. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in the
third, eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth,
nineteenth and twentieth paragraphs and the third sentence of the seventh
paragraph under the caption "Underwriting" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters through you as such
information is referred to in Section 4(a)(ii) and Section 7 hereof.
14. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the MarkWest Parties and, to the extent provided in
Sections 7 and 8, the officers and directors of the General Partner and each
person who controls the Partnership or any Underwriter and their respective
heirs, executors, administrators, successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, corporation or other entity any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained;
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns and said controlling persons and said officers
and directors, and for the benefit of no other person, corporation or other
entity. No purchaser of any of the Units from any Underwriter shall be construed
a successor or assign by reason merely of such purchase.
In all dealings hereunder, you shall act on behalf of each of the several
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of the Underwriters, made or
given by you jointly or by X.X. Xxxxxxx & Sons, Inc. on behalf of you as the
Underwriters, as if the same shall have been made or given in writing by the
Underwriters.
15. COUNTERPARTS. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
42
16. PRONOUNS. Whenever a pronoun of any gender or number is used herein,
it shall, where appropriate, be deemed to include any other gender and number.
17. TIME OF ESSENCE. Time shall be of the essence of this Agreement.
18. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri, without giving effect to the
choice of law or conflict of laws principles thereof.
43
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the MarkWest Parties and the
Underwriters.
MARKWEST HYDROCARBON, INC. MARKWEST ENERGY PARTNERS, L.P.
By: MarkWest Energy GP, L.L.C.
(its General Partner)
By: By:
-------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
MARKWEST OPERATING COMPANY, L.L.C. BASIN PIPELINE L.L.C.
By: By:
-------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
MARKWEST ENERGY GP, L.L.C. MARKWEST ENERGY APPALACHIA, L.L.C.
By: By:
-------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
WEST SHORE PROCESSING COMPANY, L.L.C. MARKWEST MICHIGAN, INC.
By: By:
-------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
Signature Page to Underwriting Agreement
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and each
of the several Underwriters
named in Schedule I hereto.
X.X. XXXXXXX & SONS, INC.
RBC CAPITAL MARKETS
MCDONALD INVESTMENTS, INC.
By: X.X. XXXXXXX & SONS, INC.
By:
---------------------------------
Title:
------------------------------
Signature Page to Underwriting Agreement
SCHEDULE I
NAME NUMBER OF UNITS
---- ---------------
X.X. Xxxxxxx & Sons, Inc. [_______]
RBC Capital Markets [_______]
McDonald Investments, Inc. [_______]
Total 2,000,000
=========
Schedule I
SCHEDULE II
Pursuant to Section 6(h) of the
Underwriting Agreement,
PricewaterhouseCoopers LLC shall furnish letters to the Underwriters to the
effect that:
(i) They are independent certified public accountants with respect to
the General Partners and the Partnership within the meaning of the 1933 Act and
the applicable Rules and Regulations thereunder.
(ii) In their opinion, the financial statements audited by them and
included in the Prospectus or the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the applicable Rules and Regulations with respect to registration
statements on Form S-1.
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
performing the procedures specified by the AICPA for a review of interim
financial information as discussed in SAS No. 71, Interim Financial Information,
on the latest available interim financial statements of the Partnership
Entities, inspection of the minute books of the Partnership Entities since the
date of the latest audited financial statements included in the Prospectus,
inquiries of officials of the Partnership Entities responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(A) any material modifications should be made to the unaudited
statements of consolidated income, statements of consolidated
financial position and statements of consolidated cash flows included
in the Prospectus for them to be in conformity with generally accepted
accounting principles, or the unaudited statements of consolidated
income, statements of consolidated financial position and statements
of consolidated cash flows included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the related published Rules and
Regulations thereunder.
(B) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
(C) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or any
increase in the consolidated long-term debt of the Partnership
Entities, or any decreases in consolidated working capital, net
current assets or net assets, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus, except
in each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter.
(D) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (C) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for changes,
decreases or increases which the Prospectus discloses have occurred or
may occur or which are described in such letter.
(iv) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iii) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Underwriters,
which are derived from the general accounting records of the Partnership
Entities for the periods covered by their reports and any interim or other
periods since the latest period covered by their reports, which appear in the
Prospectus, or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Underwriters, and have compared certain of such
amounts, percentages and financial information with the accounting records of
the Partnership Entities and have found them to be in agreement.
Schedule II - 2
EXHIBIT A
FOREIGN QUALIFICATIONS
[To come.]
EXHIBIT B
Percentage of
Number of Membership Interest
Individual Subordinated Units in the General Partner
---------- ------------------ ----------------------
Schedule II - 2
