-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KlfEMA6atsfjqK7lvp8Jl8lG4FhjQlSzzcvRbV1PvVQOHY+qamYwemfkiB0JvpBC uYFccl2ubytpnvzXsUYz2Q== 0001104659-07-089918.txt : 20071219 0001104659-07-089918.hdr.sgml : 20071219 20071219170753 ACCESSION NUMBER: 0001104659-07-089918 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20071219 DATE AS OF CHANGE: 20071219 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MARKWEST HYDROCARBON INC CENTRAL INDEX KEY: 0001019756 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841352233 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 001-14841 FILM NUMBER: 071316947 BUSINESS ADDRESS: STREET 1: 1515 ARAPAHOE STREET, TOWER 2, SUITE 700 CITY: DENVER STATE: CO ZIP: 80202-2126 BUSINESS PHONE: 303-925-9200 MAIL ADDRESS: STREET 1: 1515 ARAPAHOE STREET, TOWER 2, SUITE 700 CITY: DENVER STATE: CO ZIP: 80202-2126 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MARKWEST ENERGY PARTNERS L P CENTRAL INDEX KEY: 0001166036 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 270005456 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 1515 ARAPAHOE STREET STREET 2: TOWER 2, SUITE 700 CITY: DENVER STATE: CO ZIP: 80202-2126 BUSINESS PHONE: 303-925-9200 MAIL ADDRESS: STREET 1: 1515 ARAPAHOE STREET STREET 2: TOWER 2, SUITE 700 CITY: DENVER STATE: CO ZIP: 80202-2126 425 1 a07-31470_28k.htm 425

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) December 18, 2007

 

MARKWEST ENERGY PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

001-31239

(Commission File Number)

 

27-0005456

(I.R.S. Employer

Identification Number)

 

1515 Arapahoe Street, Tower 2, Suite 700, Denver, CO 80202

(Address of principal executive offices)

 

Registrant’s telephone number, including area code: 303-925-9200

 

Not Applicable.

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

x       Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                        Pre-Commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                        Pre-Commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 



 

ITEM 1.01 Entry Into a Material Definitive Agreement

 

On December 18, 2007, MarkWest Energy Partners, L.P. (“MarkWest”) entered into a Unit Purchase Agreement (the “Unit Purchase Agreement”) relating to a private placement of 2,857,147 common units. The units were issued on December 18, 2007, at a purchase price of $31.50 per unit, raising approximately $90 million, not including the general partner’s contribution to maintain its 2% general partner interest. The sale and issuance of the common units in this private placement were exempt from registration under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”).  Magnetar Spectrum Fund, Kayne Anderson Capital Income Partners (QP), LP, Kayne Anderson MLP Fund, LP, Kayne Anderson Midstream Opportunity Fund, LP, ARBCO II, L.P., Kayne Anderson Energy Total Return Fund, Inc., Tortoise Energy Capital Corporation and Hartz Capital Investments, LLC each purchased units in the private placement.  The proceeds of this private placement will be used primarily to fund capital expenditure requirements.

 

MarkWest also entered into a registration rights agreement (the “Registration Rights Agreement”) granting the purchasers certain piggyback and demand registration rights.

 

The description of the Unit Purchase Agreement and Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the complete text of such agreements, copies of which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this current report on Form 8-K and are incorporated herein by reference.

 

ITEM 3.02 Unregistered Sales of Equity Securities

 

On December 18, 2007, MarkWest completed a private placement of 2,857,147 common units. For additional information regarding the private placement, see Item 1.01 of this current report.

 

The securities offered in the private placement have not been registered under the Securities Act or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities.

 

ITEM 7.01 Regulation FD Disclosure

 

On December 18, 2007, MarkWest issued a press release announcing it had completed its private placement of common units.  A copy of the press release is furnished as Exhibit 99.1 to this current report.  In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 is deemed furnished and shall not be deemed “filed” for the purposes of the Securities Act of 1934, as amended.

 

ITEM 9.01 Financial Statements and Exhibits

 

(d)           Exhibits.

 

10.1

 

Unit Purchase Agreement, dated as of December 18, 2007

 

 

 

10.2

 

Registration Rights Agreement, dated as of December 18, 2007

 

 

 

99.1

 

Press Release, dated December 18, 2007, of MarkWest Energy Partners, L.P. announcing completion of private placement

 

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SIGNATURE

 

                Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

MARKWEST ENERGY PARTNERS, L.P.

 

(Registrant)

 

 

 

Date: December 19, 2007

By:

/s/ NANCY K. BUESE

 

 

Nancy K. Buese

Senior Vice President and Chief Financial Officer

 

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EX-10.1 2 a07-31470_2ex10d1.htm EX-10.1

Exhibit  10.1

 

UNIT PURCHASE AGREEMENT

 

by and among

 

MARKWEST ENERGY PARTNERS, L.P.,

 

MARKWEST ENERGY GP, L.L.C.

 

AND

 

THE PURCHASERS PARTY HERETO

 



 

UNIT PURCHASE AGREEMENT

 

UNIT PURCHASE AGREEMENT, dated as of December 18, 2007 (this “Agreement”), by and among MARKWEST ENERGY PARTNERS, L.P. (“MarkWest”), MARKWEST ENERGY GP, L.L.C. (“MarkWest GP”) (solely for purposes of Section 6.12) and each of the purchasers set forth on Schedule 2.02 hereof (each a “Purchaser” and collectively, the “Purchasers”).

 

In consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.01           Definitions.  As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

 

Action” against a Person means any lawsuit, action, proceeding, investigation or complaint before any Governmental Authority, mediator or arbitrator.

 

Affiliate” means, with respect to a specified Person, any other Person, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative meanings, “controlling,” “controlled by,” and “under common control with”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

Agreement” has the meaning set forth in the introductory paragraph.

 

Basic Documents” means, collectively, this Agreement, the Registration Rights Agreement, and any and all other agreements or instruments executed and delivered to the Purchasers by MarkWest or any Subsidiary of MarkWest hereunder or thereunder.

 

Business Day” means any day other than a Saturday, Sunday, or a legal holiday for commercial banks in New York, New York.

 

Closing” shall have the meaning specified in Section 2.02.

 

Closing Date” shall have the meaning specified in Section 2.02.

 

Commission” means the United States Securities and Exchange Commission.

 

Common Units” means the common units of MarkWest.

 

Confidential Information” means all oral or written information, documents, records and data that MarkWest or its Representatives furnishes or otherwise discloses to a Purchaser or any of its Representatives, together with all copies, extracts, analyses, compilations, studies,

 



 

memoranda, notes or other documents, records or data (in whatever form maintained, whether documentary, computer or other electronic storage or otherwise) prepared by any Person that contain or otherwise reflect or are generated from such information, documents, records, or data.  The term “Confidential Information” does not include any information that (a) at the time of disclosure or thereafter is generally available to the public (other than as a result of a disclosure by such Purchaser or its Representatives), (b) is developed by such Purchaser or any of its Representatives, independent of, and without reliance in whole or in part on, any Confidential Information or any knowledge of Confidential Information, (c) becomes available to such Purchaser or its Representatives on a non-confidential basis from a source other than MarkWest or its Representatives who, insofar as is known to the recipient after reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal, fiduciary or other obligation to MarkWest or (d) was available to such Purchaser or its Representatives on a non-confidential basis prior to its disclosure to such Purchaser or its Representatives by MarkWest or its Representatives.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

 

Form 8-A” shall have the meaning set forth in Section 3.02(a).

 

GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.

 

Governmental Authority” means, with respect to a particular Person, the country, state, county, city and political subdivisions in which such Person or such Person’s Property is located or which exercises valid jurisdiction over any such Person or such Person’s Property, and any court, agency, department, commission, board, bureau or instrumentality of any of them and any monetary authority which exercises valid jurisdiction over any such Person or such Person’s Property.  Unless otherwise specified, all references to Governmental Authority herein with respect to MarkWest means a Governmental Authority having jurisdiction over MarkWest, its Subsidiaries or any of their respective Properties.

 

Hydrocarbon Acquisition” means the transactions contemplated by the Hydrocarbon Purchase Agreement.

 

Hydrocarbon Purchase Agreement” means the Agreement and Plan of Redemption and Merger, dated as of September 5, 2007 by and among MarkWest Hydrocarbon, Inc., MarkWest and MWEP, L.L.C.

 

Indemnified Party” shall have the meaning specified in Section 6.02(c).

 

Indemnifying Party” shall have the meaning specified in Section 6.02(c).

 

Knowledge” means the actual knowledge of the individuals listed on Schedule 1.01 hereto after reasonable inquiry.

 

Law” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, rule or regulation.

 

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Lien” means any lien, encumbrance, security interest, charge or other interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. For the purpose of this Agreement, a Person shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.

 

MarkWest” has the meaning set forth in the introductory paragraph.

 

MarkWest Financial Statements” means the financial statement or statements described or referred to in Section 3.03.

 

MarkWest GP” has the meaning set forth in the introductory paragraph.

 

MarkWest Material Adverse Effect” means any material and adverse effect on (a) the assets, liabilities, financial condition, business, operations or affairs of MarkWest and its Subsidiaries taken as a whole measured against those assets, liabilities, financial condition, business, operations or affairs reflected in the MarkWest SEC Documents filed with the Commission prior to the date hereof or from the facts represented or warranted in any Basic Document, or (b) the ability of MarkWest to fulfill any of its obligations under or consummate any of the transactions contemplated by the Basic Documents.

 

MarkWest Related Parties” shall have the meaning specified in Section 6.02(b).

 

MarkWest SEC Documents” shall have the meaning specified in Section 3.03.

 

Partnership Agreement” means the Second Amended and Restated Agreement of Limited Partnership of MarkWest, dated as of February 28, 2007.

 

Partnership Securities” means any class or series of equity interest in MarkWest (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in MarkWest), including without limitation Common Units and Incentive Distribution Rights (as defined in the Partnership Agreement).

 

Permits” means, with respect to MarkWest or any of its Subsidiaries, any licenses, permits, variances, consents, authorizations, waivers, grants, franchises, concessions, exemptions, orders, registrations and approvals of Governmental Authorities or other Persons necessary for the ownership, leasing, operation, occupancy and use of its Properties and the conduct of its businesses as currently conducted.

 

Person” means any individual, corporation, company, voluntary association, partnership, joint venture, trust, limited liability company, unincorporated organization or government or any agency, instrumentality or political subdivision thereof, or any other form of entity.

 

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Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

Purchase Price” means, with respect to a particular Purchaser, the monetary purchase amount set forth opposite such Purchaser’s name under the column entitled “Total Purchase Price” on Schedule 2.02 hereto.

 

Purchased Units” means, with respect to a particular Purchaser, the number of Common Units set forth opposite such Purchaser’s name under the column entitled “Units Purchased” set forth on Schedule 2.02 hereto.

 

Purchaser” and “Purchasers” each has the meaning set forth in the introductory paragraph.

 

Purchaser Material Adverse Effect” means, with respect to a particular Purchaser, any material and adverse effect on (a) the assets, liabilities, financial condition, business, operations or affairs of such Purchaser, (b) the ability of such Purchaser to carry out its business as of the date hereof or to meet its obligations under the Basic Documents on a timely basis or (c) the ability of such Purchaser to consummate the transactions under any Basic Document.

 

Purchaser Related Parties” shall have the meaning specified in Section 6.02(a).

 

Registration Rights Agreement” means the Registration Rights Agreement, to be entered into at the Closing, among MarkWest and the Purchasers in the form attached hereto as Exhibit A.

 

Representatives” of any Person means the officers, directors, employees, agents, counsel, investment bankers and other representatives of such Person.

 

Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

 

Short Sales” means, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and forward sale contracts, options, puts, calls, short sales, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements, and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers.

 

Subsidiary” means, as to any Person, any corporation or other entity of which: (i) such Person or a Subsidiary of such Person is a general partner or manager; or (ii) at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether or not at the time any equity interest of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries.

 

4



 

Tax” means any tax, charge, fee, levy, penalty or other assessment imposed by any U.S. federal, state, local or foreign taxing authority, including any excise, property, income, sales, transfer, franchise, payroll, withholding, social security or other tax, including any interest, penalties or additions attributable thereto.

 

Tax Return” means any return, report, information return, declaration, claim for refund or other document (including any related or supporting information) supplied or required to be supplied to any authority with respect to Taxes and including any supplement or amendment thereof.

 

Unit Price” shall have the meaning set forth in Section 2.04.

 

Section 1.02           Accounting Procedures and Interpretation.  Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all MarkWest Financial Statements and certificates and reports as to financial matters required to be furnished to the Purchasers hereunder shall be prepared, in accordance with GAAP applied on a consistent basis during the periods involved (except, in the case of unaudited statements, as permitted by Form 10-Q promulgated by the Commission) and in compliance as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto.

 

ARTICLE II
AGREEMENT TO SELL AND PURCHASE

 

Section 2.01           Sale and Purchase.  Subject to the terms and conditions hereof, at the Closing (as defined in Section 2.02) MarkWest hereby agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees to purchase from MarkWest, such Purchaser’s Purchased Units, and each Purchaser agrees to pay MarkWest such Purchaser’s Purchase Price. The obligation of each Purchaser hereunder is several and not joint and is independent of the obligation of each other Purchaser, and the failure of, or MarkWest’s waiver of, performance by any Purchaser does not excuse performance by any other Purchaser or MarkWest.

 

Section 2.02           Closing.  Subject to the terms and conditions hereof, the consummation of the purchase and sale of the Purchased Units hereunder (the “Closing”) shall take place on December 18, 2007 (such date, the “Closing Date”) at the offices of Vinson & Elkins, L.L.P., 1001 Fannin Street, Suite 2500, Houston, Texas 77002.  Each of the items to be delivered, as set forth in Section 2.03, shall be delivered by the responsible party on the Closing Date.

 

Section 2.03           Deliveries.

 

(a)           At the Closing, subject to the terms and conditions hereof, MarkWest will deliver, or cause to be delivered, to each Purchaser:

 

(i)                    The Purchased Units to be purchased by such Purchaser by delivery of certificates evidencing such Purchased Units at the Closing meeting the requirements of the Partnership Agreement, all free and clear of any Liens, encumbrances or interests of any other Person;

 

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(ii)                   A certificate of the Secretary of State of the State of Delaware, dated as of a recent date, that each of MarkWest, MarkWest GP and MarkWest Energy Operating Company, L.L.C. is in good standing;

 

(iii)                  An opinion addressed to the Purchasers from Vinson & Elkins L.L.P., dated as of the Closing Date, in the form and substance attached hereto as Exhibit C;

 

(iv)                  The Registration Rights Agreement, which shall have been duly executed by MarkWest.

 

(b)           At the Closing, subject to the terms and conditions hereof, each Purchaser will deliver, or cause to be delivered to MarkWest.

 

(i)                    The Registration Rights Agreement, which shall have been duly executed by each such Purchaser; and

 

(ii)                   Such Purchaser’s Purchase Price by wire transfer of immediately available funds to an account designated by MarkWest in writing prior to the Closing.

 

Section 2.04           Consideration.  The amount per Common Units each Purchaser will pay to MarkWest to purchase the Common Units comprising the Purchased Units shall be $31.50 per Common Unit (the “Unit Price”).

 

Section 2.05           Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Basic Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Basic Document.  Nothing contained herein or in any Basic Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Basic Document.  Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Basic Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Basic Documents.   MarkWest has elected to provide all Purchasers with the same material terms and Basic Documents for the convenience of MarkWest and not because it was required or requested to do so by the Purchasers.

 

Section 2.06           Lock-up.

 

(a)           MarkWest agrees that from and after Closing, other than (i) in connection with the Hydrocarbon Acquisition or (ii) pursuant to MarkWest’s Long-Term Incentive Plan and MarkWest’s other equity compensation plans, as described in MarkWest’s Annual Report on Form 10-K for the period ended December 31, 2006, it will not sell,

 

6



 

nor will it permit any of its Affiliates to offer, sell, contract to sell, pledge or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of any Common Units prior to the date which is 90 days from the Closing Date.

 

(b)           Each Purchaser agrees that from and after Closing it will not offer, sell, contract to sell, pledge or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of any of the Purchased Units prior to the date which is 90 days from the Closing Date; provided, however, that any Purchaser may (i) pledge its Purchased Units in connection with a bona fide margin account or other loan or financing arrangement secured by such Purchaser’s Purchased Units or (ii) enter into a cash settled derivative, total return swap or similar transaction, in each case, with respect to the Purchased Units purchased by it.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES RELATED TO MARKWEST

 

MarkWest represents and warrants to each Purchaser as follows:

 

Section 3.01           Corporate Existence.  MarkWest: (a) is a limited partnership duly organized, legally existing and in good standing under the laws of the State of Delaware; and (b) has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use and operate its Properties and carry on its business as its business is now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably likely to have a MarkWest Material Adverse Effect.  Each of MarkWest’s Subsidiaries that is a corporation is a corporation duly incorporated, validly existing and in good standing under the laws of the State or other jurisdiction of its incorporation and has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use or operate its respective Properties and carry on its business as now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably likely to have a MarkWest Material Adverse Effect.  Each Subsidiary of MarkWest that is not a corporation has been duly formed, is validly existing and in good standing under the laws of the State or other jurisdiction of its formation and has all requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use or operate its respective Properties and carry on its business as now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably likely to have a MarkWest Material Adverse Effect.  None of MarkWest or any of its Subsidiaries are in default in the performance, observance or fulfillment of any provision of, in the case of MarkWest, the Partnership Agreement or its Certificate of Limited Partnership or, in the case of any Subsidiary of MarkWest, its respective certificate of incorporation, bylaws or other similar organizational documents.  Each of MarkWest and its Subsidiaries is duly qualified or licensed and in good standing as a foreign corporation or other entity, and is authorized to do business, in each jurisdiction in which the ownership or leasing of its respective Properties or the character of its respective operations makes such qualification necessary, except where the failure to obtain such qualification, license, authorization or good standing would not be reasonably likely to have a MarkWest Material Adverse Effect.

 

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Section 3.02           Capitalization and Valid Issuance of Purchased Units.

 

(a)           As of the date hereof, the issued and outstanding limited partner interests of MarkWest consist of 36,500,445 Common Units.  The only issued and outstanding general partner interests of MarkWest are the interests of the General Partner described and as defined in the Partnership Agreement.  All outstanding Common Units and the limited partner interests represented thereby 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 under the caption “The Partnership Agreement-Limited Liability” in MarkWest’s registration statement on Form S-1 (No. 333-81780) which is incorporated by reference into the Partnership’s Registration Statement on Form 8-A (File No. 001-31239) (the “Form 8-A”)).

 

(b)           Other than MarkWest’s Long-Term Incentive Plan and MarkWest’s other equity compensation plans, as described in MarkWest’s Annual Report on Form 10-K for the period ended December 31, 2006, MarkWest has no equity compensation plans that contemplate the issuance of Common Units (or securities convertible into or exchangeable for Common Units).  No indebtedness having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which MarkWest unitholders may vote is issued or outstanding.  Except as set forth in the first sentence of this Section 3.02(b), as are contained in the Partnership Agreement or as contemplated by the Hydrocarbon Purchase Agreement and disclosed in the joint proxy statement/prospectus that is part of the Registration Statement on Form S-4 filed with the Commission on November 11, 2007 (File No. 333-147370), there are no outstanding or authorized (i) options, warrants, preemptive rights, subscriptions, calls, or other rights, convertible securities, agreements, claims or commitments of any character obligating MarkWest or any of its Subsidiaries to issue, transfer or sell any partnership interests or other equity interest in, MarkWest or any of its Subsidiaries or securities convertible into or exchangeable for such partnership interests or equity interests, (ii) obligations of MarkWest or any of its Subsidiaries to repurchase, redeem or otherwise acquire any partnership interests or equity interests of MarkWest or any of its Subsidiaries or any such securities or agreements listed in clause (i) of this sentence or (iii) voting trusts or similar agreements to which MarkWest or any of its Subsidiaries is a party with respect to the voting of the equity interests of MarkWest or any of its Subsidiaries.  At the Closing, except as described in this Section 3.02(b) and as contemplated by the Hydrocarbon Purchase Agreement, there will not be any outstanding subscriptions, options, warrants, calls, preemptive rights, subscriptions, or other rights, convertible or exchangeable securities, agreements, claims or commitments of any character by which MarkWest or any of its Subsidiaries will be bound calling for the purchase or issuance of any partnership interests of MarkWest or any equity interest of any of its Subsidiaries or securities convertible into or exchangeable for such partnership or equity interests or any other such securities or agreements.  Neither the offering or sale of the Purchased Units nor registration of the Purchased Units pursuant to the Registration Rights Agreement gives rise to any rights for or relating to the registration of any Common Units or other securities of MarkWest.

 

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(c)           (i) All of the issued and outstanding equity interests of each of MarkWest’s Subsidiaries are owned, directly or indirectly, by MarkWest free and clear of any Liens (except for such restrictions as may exist under applicable Law and except for such Liens as may be imposed under MarkWest’s or MarkWest’s Subsidiaries’ credit facilities), and all such ownership interests have been duly authorized, validly issued and are fully paid (to the extent required in the organizational documents of MarkWest’s Subsidiaries, as applicable) and non-assessable (except as nonassessability may be affected by Section 6.07 of the Texas Revised Uniform Limited Partnership Act,  Section 18-607 of the Delaware Limited Liability Company Act, Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, Section 450.4307 of the Michigan Limited Liability Company Act, Section 2030 of the Oklahoma Limited Liability Company Act or the organizational documents of MarkWest’s Subsidiaries, as applicable) and free of preemptive rights, with no personal liability attaching to the ownership thereof, and (ii) as of the date hereof, neither MarkWest nor any of its Subsidiaries owns any shares of capital stock or other securities of, or interest in, any other Person, or is obligated to make any capital contribution to or other investment in any other Person.  The material Subsidiaries of MarkWest are set forth on Schedule 3.02 hereto.

 

(d)           The Common Units being purchased by the Purchasers hereunder and the limited partner interests represented thereby, are duly authorized by the Partnership Agreement and, when issued and delivered to the Purchasers against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid (to the extent required by the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described under the caption “The Partnership Agreement—Limited Liability” in MarkWest’s registration statement on Form S-1 (No. 333-81780) which is incorporated by reference into the Form 8-A) and will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under the Partnership Agreement and under applicable state and federal securities laws and other than such Liens as are created by the Purchaser.

 

(e)           The Common Units are listed on the New York Stock Exchange.

 

(f)            Correct and complete copies of the Partnership Agreement and MarkWest’s certificate of limited partnership are attached hereto as Exhibit B.

 

Section 3.03           MarkWest SEC Documents.  MarkWest has filed with the Commission all forms, registration statements, reports, schedules and statements required to be filed by it under the Exchange Act or the Securities Act (all such documents, collectively “MarkWest SEC Documents”) and, since October 11, 2005, all such reports and statements have been timely filed.  The MarkWest SEC Documents, including, without limitation, any audited or unaudited financial statements and any notes thereto or schedules included therein (the “MarkWest Financial Statements”), at the time filed (in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected by a subsequently filed MarkWest SEC Document filed prior to the date hereof) (a) did not contain any untrue statement of a material fact or omit 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, (b) 

 

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complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, (c) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, (d) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission), and (e) fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments) in all material respects the consolidated financial position and status of the business of MarkWest as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended.  PricewaterhouseCoopers LLP, MarkWest’s former public accounting firm, is an independent public accounting firm with respect to MarkWest and did not resign and was not dismissed as independent public accountants of MarkWest as a result of or in connection with any disagreement with MarkWest on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.  KPMG LLP, MarkWest’s former public accounting firm, is an independent public accounting firm with respect to MarkWest and did not resign and was not dismissed as independent public accountants of MarkWest as a result of or in connection with any disagreement with MarkWest on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.  Deloitte & Touche LLP, MarkWest’s current public accounting firm, is an independent public accounting firm with respect to MarkWest and has not resigned or been dismissed as independent public accountants of MarkWest as a result of or in connection with any disagreement with MarkWest on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.  To MarkWest’s Knowledge, the information (considering all information in the aggregate and excluding all forecasts, projections and forward looking information), if any, provided by MarkWest to any Purchaser regarding any potential transaction with MarkWest Hydrocarbon, Inc. was true and correct in all material respects and did not contain any untrue statement of a material fact or omit 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.

 

Section 3.04           No Material Adverse Change.  Except as set forth in or contemplated by the MarkWest SEC Documents filed with the Commission on or prior to the date hereof, since December 31, 2006, MarkWest and its Subsidiaries have conducted their respective businesses in the ordinary course, consistent with past practice, and there has been no (a) change, event, occurrence, effect, fact, circumstance or condition that has had or would be reasonably likely to have a MarkWest Material Adverse Effect, other than those occurring as a result of general economic or financial conditions or other developments that are not unique to MarkWest and its Subsidiaries but also affect other Persons who participate or are engaged in the lines of business of which MarkWest and its Subsidiaries participate or are engaged, except, in each case, to the extent such change, event, occurrence, effect, fact, circumstance or condition affects MarkWest to a significantly greater extent than other similarly situated companies generally, (b) acquisition or disposition of any material asset by MarkWest or any of its Subsidiaries or any contract or arrangement therefor, otherwise than for fair value in the ordinary course of business, or (c) material change in MarkWest’s accounting principles, practices or methods.  Except as set forth in or contemplated by the MarkWest SEC Documents filed with the Commission on or prior to the date hereof and MarkWest has neither issued Partnership Securities (other than under its Long-Term Incentive Plan and its other equity compensation plans, each as described in the

 

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MarkWest SEC Documents filed with the Commission on or prior to the date hereof) nor incurred material indebtedness since December 31, 2006.

 

Section 3.05           Litigation.  Except as set forth in the MarkWest SEC Documents filed with the Commission on or prior to the date hereof, there is no Action pending or, to the knowledge of MarkWest, contemplated or threatened against or affecting MarkWest, any of its Subsidiaries or any of their respective officers, directors, properties or assets, which (individually or in the aggregate) (a) questions the validity of any of the Basic Documents or the right of MarkWest to enter into any of the Basic Documents or to consummate the transactions contemplated hereby and thereby or (b) would be reasonably likely to result in a MarkWest Material Adverse Effect.

 

Section 3.06           No Breach.  The execution, delivery and performance by MarkWest of the Basic Documents and all other agreements and instruments to be executed and delivered by MarkWest pursuant hereto or thereto or in connection with the transactions contemplated by the Basic Documents or any such other agreements and instruments, and compliance by MarkWest with the terms and provisions hereof and thereof and the issuance and sale by MarkWest of the Purchased Units, do not and will not (a) violate any provision of any Law or Permit having applicability to MarkWest or any of its Subsidiaries or any of their respective Properties, (b) conflict with or result in a violation of any provision of the Certificate of Limited Partnership or other organizational documents of MarkWest, or the Partnership Agreement, or any organizational documents of any of MarkWest’s Subsidiaries, (c) require any consent, approval or notice under or result in a violation or breach of or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any contract, agreement, instrument, obligation, note, bond, mortgage, license, loan or credit agreement to which MarkWest or any of its Subsidiaries is a party or by which MarkWest or any of its Subsidiaries or any of their respective Properties may be bound, or (d) result in or require the creation or imposition of any Lien upon or with respect to any of the Properties now owned or hereafter acquired by MarkWest or any of its Subsidiaries; with the exception of the conflicts stated in clause (b) of this Section 3.06, except where such conflict, violation, default, breach, termination, cancellation, failure to receive consent or approval, or acceleration with respect to the foregoing provisions of this Section 3.06 would not be, individually or in the aggregate, reasonably likely to have a MarkWest Material Adverse Effect.

 

Section 3.07           Authority.  MarkWest has all necessary power and authority to execute, deliver and perform its obligations under the Basic Documents and the execution, delivery and performance by MarkWest of the Basic Documents; and the Basic Documents constitute the legal, valid and binding obligations of MarkWest, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally or by general principles of equity. No approval from the holders of the Common Units is required in connection with MarkWest’s issuance and sale of the Purchased Units to the Purchasers.

 

Section 3.08           Approvals.  Except for the approvals required by the Commission in connection with MarkWest’s obligations under the Registration Rights Agreement, no authorization, consent, approval, waiver, license, qualification or written exemption from, nor any filing, declaration, qualification or registration with, any Governmental Authority or any

 

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other Person is required in connection with the execution, delivery or performance by MarkWest of any of the Basic Documents, except those already obtained or where the failure to receive such authorization, consent, approval, waiver, license, qualification or written exemption from, or to make such filing, declaration, qualification or registration would not, individually or in the aggregate, be reasonably likely to have a MarkWest Material Adverse Effect.

 

Section 3.09           MLP Status.  MarkWest has, for each taxable year beginning after December 31, 2002 during which MarkWest was in existence, met the gross income requirements of Section 7704(c)(2) of the Internal Revenue Code of 1986, as amended.

 

Section 3.10           Offering.  Assuming the accuracy of the representations and warranties of the Purchasers contained in this Agreement, the sale and issuance of the Purchased Units to each of the Purchasers pursuant to this Agreement is exempt from the registration requirements of the Securities Act, and neither MarkWest nor any authorized agent acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemptions.

 

Section 3.11           Investment Company Status.  MarkWest is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 3.12           Certain Fees.  Except for the expense reimbursement contemplated by Section 6.11, no fees or commissions will be payable by MarkWest to brokers, finders, or investment bankers with respect to the sale of any of the Purchased Units or the consummation of the transaction contemplated by this Agreement.

 

Section 3.13           No Side Agreements.  Other than confidentiality agreements entered into with the Purchasers and the Registration Rights Agreement, there are no other agreements by, among or between MarkWest or its Affiliates, on the one hand, and any of the Purchasers or their Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or inducements for future transactions between or among any of such parties.

 

Section 3.14           Material Agreements.  MarkWest has provided the Purchasers (if requested) with correct and complete copies of all material agreements (as defined in Item 601(b)(10) of Regulation S-K promulgated by the Commission), including amendments to or other modifications of pre-existing material agreements, entered into by MarkWest since December 31, 2006.

 

Section 3.15           Form S-3 Eligibility and WKSI Status.  MarkWest is eligible to register the Purchased Units for resale by the Purchasers on a registration statement on Form S-3 under the Securities Act. MarkWest qualifies as a “well-known seasoned issuer” under the Exchange Act.

 

Section 3.16           Taxes.  MarkWest has filed all Tax Returns required to be filed.  To the knowledge of MarkWest, such Tax Returns are true, correct and complete in all material respects.  MarkWest has paid in full all Taxes shown to be due on such tax returns.  MarkWest has not received any written notice of deficiency or assessment from any taxing authority with respect to liabilities for material Taxes, which have not been fully paid or finally settled, unless being contested in good faith through appropriate proceedings and for which adequate reserves are presented on the MarkWest Financial Statements.

 

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Section 3.17           Confidential Information.  To the Knowledge of MarkWest, none of its employees or executive officers has disclosed material non-public information (other than the fact that MarkWest was contemplating a private financing) to any prospective investor who has not entered into a confidentiality agreement between such prospective investor and MarkWest relating to such information.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

 

Each Purchaser, severally and not jointly, represents and warrants to MarkWest with respect to itself:

 

Section 4.01           Investment.  The Purchased Units are being acquired for its own account, not as a nominee or agent, and with no intention of distributing the Purchased Units or any part thereof, and that such Purchaser has no present intention of selling or granting any participation in or otherwise distributing the same in any transaction in violation of the securities laws of the United States of America or any State, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of the Purchased Units under a registration statement under the Securities Act and applicable state securities laws or under an exemption from such registration available thereunder (including, without limitation, if available, Rule 144 promulgated thereunder). If such Purchaser should in the future decide to dispose of any of the Purchased Units, such Purchaser understands and agrees (a) that it may do so only (i) in compliance with the Securities Act and applicable state securities law, as then in effect, or (ii) in the manner contemplated by any registration statement pursuant to which such securities are being offered, and (b) that stop-transfer instructions to that effect will be in effect with respect to such securities until such time as the Purchased Units become eligible for resale under Rule 144.  Notwithstanding the foregoing, a Purchaser may enter into a derivative transaction or one or more total return swaps with respect to its Purchased Units with a third party provided that such transaction is exempt from registration under the Securities Act.

 

Section 4.02           Nature of Purchaser.  Such Purchaser represents and warrants to, and covenants and agrees with, MarkWest that, (a) it is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated by the Commission pursuant to the Securities Act and (b) by reason of its business and financial experience it has such knowledge, sophistication and experience in making similar investments and in business and financial matters generally so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Units, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment.

 

Section 4.03           Receipt of Information; Authorization.  Such Purchaser acknowledges that it has had access to MarkWest’s periodic filings with the Commission and the joint proxy statement/prospectus that is part of the Registration Statement on Form S-4 filed with the Commission on November 11, 2007 (File No. 333-147370).

 

Section 4.04           Corporate Existence.  Such Purchaser, if an entity: (a) is duly incorporated or formed, legally existing and in good standing under the laws of its respective jurisdiction of incorporation or formation; and (b) has all requisite power and authority, and has all

 

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governmental licenses, authorizations, consents and approvals necessary, to own, lease, use and operate its Properties and carry on its business as its business is now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not have or would not reasonably be expected to have a Purchaser Material Adverse Effect. Each such Purchaser is not in default in the performance, observance or fulfillment of any provision of its organizational documents, except where such default would not have or would not be reasonably likely to have a Purchaser Material Adverse Effect.

 

Section 4.05           No Breach.  The execution, delivery and performance by such Purchaser of this Agreement, the Registration Rights Agreement and all other agreements and instruments to be executed and delivered by such Purchaser pursuant hereto or thereto or in connection with the transactions contemplated by this Agreement, the Registration Rights Agreement or any such other agreements and instruments, and compliance by such Purchaser with the terms and provisions hereof and thereof, and the purchase of such Purchaser’s Purchased Units by such Purchaser do not and will not (a) violate any provision of any Law or permit having applicability to such Purchaser or any of its Properties, (b) conflict with or result in a violation of any provision of the organizational documents of such Purchaser, (c) require any consent or approval under or result in a violation or breach of or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under any contract, agreement, instrument, obligation, note, bond, mortgage, license, loan or credit agreement to which such Purchaser is a party or by which such Purchaser or any of its Properties may be bound, or (d) result in or require the creation or imposition of any Lien upon or with respect to any of the Properties now owned or hereafter acquired by such Purchaser; with the exception of the conflicts stated in clause (b) of this Section 4.05, except where such conflict, violation, default, breach, termination, cancellation, failure to receive consent or approval, or acceleration with respect to the foregoing provisions of this Section 4.05 would not, individually or in the aggregate, be reasonably likely to have a Purchaser Material Adverse Effect.

 

Section 4.06           Restricted Securities.  Such Purchaser understands that the Purchased Units it is purchasing are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from MarkWest in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be re-sold without registration under the Securities Act only in certain limited circumstances. In this connection, Purchaser represents that it is knowledgeable with respect to Rule 144 of the Commission promulgated under the Securities Act.

 

Section 4.07           Certain Fees.  No fees or commissions will be payable by such Purchaser to brokers, finders, or investment bankers with respect to the purchase of any of the Purchased Units or the consummation of the transaction contemplated by this Agreement.

 

Section 4.08           Legend.  It is understood that the certificates evidencing the Purchased Units may bear the following legend:  “THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘SECURITIES ACT’), AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER THE SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE (AND, IN SUCH CASE, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE PARTNERSHIP SHALL HAVE BEEN

 

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DELIVERED TO THE PARTNERSHIP TO THE EFFECT THAT SUCH OFFER OR SALE IS NOT REQUIRED TO BE REGISTERED UNDER THE SECURITIES ACT).

 

Section 4.09           No Side Agreements.  Other than confidentiality agreements entered into with MarkWest and the Registration Rights Agreement, there are no other agreements by, among or between such Purchaser and any of its Affiliates, on the one hand, and any of the other Purchasers or their Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or inducements for future transactions between or among any of such parties.

 

Section 4.10           Short Selling.  Such Purchaser represents that it has not entered into any Short Sales of the Common Units owned by it between the time it first began discussions with MarkWest about the transactions contemplated by this Agreement and the date hereof (it being understood that the entering into of a total return swap should not be considered a short sale of Common Units).

 

ARTICLE V
COVENANTS

 

Section 5.01           Certain Special Allocations of Book and Taxable Income.  To the extent that the Unit Price is less than the trading price of the Common Units on the New York Stock Exchange as of the Closing Date, the General Partner intends to specially allocate items of book and taxable income to the Purchasers so that their capital accounts in their Units are consistent, on a per-Unit basis, with the capital accounts of the other holders of Common Units (and thus to assure fungibility of all Common Units).  Such special allocation will occur upon the earlier to occur of any taxable period of MarkWest ending upon, or after, (i) a book-up event or book-down event in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f) or a sale of all or substantially all of the assets of MarkWest occurring after the date of the issuance of the Common Units or (ii) the transfer of the Common Units to a Person that is not an Affiliate of the holder.  A Purchaser holding a Common Unit shall be required to provide notice to the General Partner of the transfer of a Common Unit to a Person that is not an Affiliate of the Purchaser no later than the last Business Day of the calendar year during which such transfer occurred, unless by virtue of the application of clause (i) above, the General Partner has determined that the Common Units are consistent, on a per-Unit basis, with the capital accounts of the other holders of Common Units.

 

Section 5.02           Short Selling Acknowledgement and Agreement.  Each Purchaser understands and acknowledges, severally and not jointly with any other Purchaser, that the Commission currently takes the position that coverage of short sales of securities  “against the box” prior to the effective date of a registration statement related thereto is a violation of Section 5 of the Securities Act.  Each Purchaser agrees, severally and not jointly, that it will not engage in any Short Sales that result in the disposition of the Purchased Units acquired hereunder by the Purchaser until such time as the Purchaser may freely sell such Purchased Units pursuant to Rule 144 under the Securities Act (it being understood that the entering into of a total return swap should not be considered a Short Sale of Purchased Units).  No Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short Sales that result in the disposition of securities of MarkWest, other than the Purchased Units, owned by such

 

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Purchaser or borrowed from a broker after the date MarkWest issues a press release in respect of this Agreement

 

Section 5.03           Non-Disclosure; Interim Public Filings.  MarkWest shall, on or before 8:30 a.m., New York time, on the second Business Day following execution of this Agreement, issue a press release reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby and file a Current Report on Form 8-K with the Commission describing the terms of the transactions contemplated by this Agreement and the other Basic Documents and including as exhibits to such Current Report on Form 8-K this Agreement and the Registration Rights Agreement, in the form required by the Exchange Act.

 

ARTICLE VI
MISCELLANEOUS

 

Section 6.01           Interpretation and Survival of Provisions.  Article, Section, Schedule, and Exhibit references are to this Agreement, unless otherwise specified.  All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified.  All references to a party in this Agreement shall include such party’s successors and permitted assigns.  The word “including” shall mean “including but not limited to.”  The terms “will” and “shall” shall be interpreted to have the same meaning.  Words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires.  The section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.  Whenever MarkWest has an obligation under the Basic Documents, the expense of complying with that obligation shall be an expense of MarkWest unless otherwise specified. Whenever any determination, consent, or approval is to be made or given by a Purchaser, such action shall be in such Purchaser’s sole discretion unless otherwise specified in this Agreement.  If any provision in the Basic Documents is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and the Basic Documents shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable provision had never comprised a part of the Basic Documents, and the remaining provisions shall remain in full force and effect.  The Basic Documents have been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.  The representations and warranties set forth in Sections 3.01, 3.02, 3.06, 3.07, 3.08, 3.12, 3.13, 4.01, 4.02, 4.03, 4.04, 4.05, 4.06, 4.07 and 4.09 hereunder shall survive the execution and delivery of this Agreement indefinitely, and the other representations and warranties set forth herein shall survive for a period of twelve (12) months following the Closing Date regardless of any investigation made by or on behalf of MarkWest or each of the Purchasers.  The covenants made in this Agreement or any other Basic Document shall survive the Closing of the transactions described herein and remain operative and in full force and effect regardless of acceptance of any of the Purchased Units and payment therefor and repayment or repurchase thereof.  All indemnification obligations of MarkWest and the provisions of Section 6.02 shall remain operative and in full force and effect unless such obligations are expressly terminated in a writing executed by all the parties to this Agreement referencing that individual Section, regardless of any purported general termination of this Agreement.

 

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Section 6.02           Indemnification, Costs and Expenses.

 

(a)           Indemnification by MarkWest.  MarkWest agrees to indemnify each Purchaser and its officers, directors, employees and agents (collectively, the “Purchaser Related Parties”) from, and hold each of them harmless against any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to (i) any actual or proposed use by MarkWest of the proceeds of any sale of the Purchased Units or (ii) the breach of any of the representations, warranties or covenants of MarkWest contained herein, provided such claim for indemnification relating to a breach of a representation or warranty is made prior to the expiration of such representation or warranty.

 

(b)           Indemnification by Purchasers.  Each Purchaser agrees, severally and not jointly, to indemnify MarkWest, MarkWest GP and their officers, directors, employees and agents (collectively, the “MarkWest Related Parties”) from, and hold each of them harmless against any and all actions, suits, proceedings (including any investigations, litigation, or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all reasonable costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of such Purchaser contained herein, provided such claim for indemnification relating to a breach of the representations and warranties is made prior to the expiration of such representations and warranties.

 

(c)           Indemnification Procedure.  Promptly after any MarkWest Related Party or Purchaser Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any action or proceeding by a third person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such action or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known.  The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified

 

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Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control.  Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party.  After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense and employ counsel or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred.  Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, and does not include any admission of wrongdoing or illegal conduct by the Indemnified Party.

 

Section 6.03           No Waiver; Modifications in Writing.

 

(a)           Delay.  No failure or delay on the part of any party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a party at law or in equity or otherwise.

 

(b)           Specific Waiver.  Except as otherwise provided herein, no amendment, waiver, consent, modification, or termination of any provision of this Agreement or any other Basic Document shall be effective unless signed by each of the parties hereto or thereto affected by such amendment, waiver, consent, modification, or termination.  Any amendment, supplement or modification of or to any provision of this Agreement or any other Basic Document, any waiver of any provision of this Agreement or any other Basic Document, and any consent to any departure by MarkWest from the terms of any provision of this Agreement or any other Basic Document shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on MarkWest in

 

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any case shall entitle MarkWest to any other or further notice or demand in similar or other circumstances.

 

Section 6.04                                Binding Effect; Assignment.

 

(a)           Binding Effect.  This Agreement shall be binding upon MarkWest, each Purchaser, and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement, and their respective successors and permitted assigns.

 

(b)           Assignment of Purchased Units.  All or any portion of a Purchaser’s Purchased Units purchased pursuant to this Agreement may be sold, assigned or pledged by such Purchaser, subject to compliance with applicable securities laws and Section 2.06(b).

 

(c)           Assignment of Rights.  Each Purchaser may assign all or any portion of its rights and obligations under this Agreement without the consent of MarkWest (i) to any Affiliate of such Purchaser, (ii) in connection with a total return swap or similar transaction with respect to the Purchased Units purchased by such Purchaser or (iii) in connection with a foreclosure in respect of Purchased Units pledged by a Purchaser in connection with a bona fide margin account or other loan or financing arrangement, and in each case the assignee shall be deemed to be a Purchaser hereunder with respect to such assigned rights or obligations and shall agree in writing to be bound by the provisions of this Agreement.  Except as expressly permitted by this Section 6.04(c), such rights and obligations may not otherwise be transferred except with the prior written consent of MarkWest (which consent shall not be unreasonably withheld), in which case the assignee shall be deemed to be a Purchaser hereunder with respect to such assigned rights or obligations and shall agree in writing to be bound by the provisions of this Agreement.

 

Section 6.05           Confidentiality.  Notwithstanding anything herein to the contrary, the confidentiality agreement executed by each Purchaser in favor of MarkWest shall survive the Closing and each Purchaser shall continue to remain bound by such confidentiality agreement.  Disclosure of Confidential Information will not be deemed to be a breach of this Section 6.05 if such disclosure is made with the consent of MarkWest or pursuant to a subpoena or order issued by a court of competent jurisdiction or by a judicial or administrative or legislative body or committee; provided, however, that upon receipt by a Purchaser of any subpoena or order covering Confidential Information of MarkWest, such Purchaser will promptly notify MarkWest of such subpoena or order.

 

Section 6.06           Communications.  All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, regular mail, air courier guaranteeing overnight delivery, electronic mail or personal delivery to the following addresses:

 

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(a)                                  If to MarkWest:

 

1515 Arapahoe Street

Tower 2, Suite 700

Denver, CO  80202

Attention:  Nancy K. Buese

Facsimile:  (303) 925-9309

Email:  nbuese@markwest.com

 

with a copy (which shall not constitute notice) to:

 

Vinson & Elkins L.L.P.

2500 First City Tower

1001 Fannin Street

Houston, Texas 77002

Attention:  David P. Oelman, Esq.

Facsimile:  (713) 615-5861

Email:  doelman@velaw.com

 

(b)                                 If to Magnetar Spectrum Fund:

 

Magnetar Spectrum Fund

c/o Magnetar Financial LLC

1603 Orrington Avenue, 13th Floor

Evanston, IL 60201

Facsimile:  847-905-5687

 

with a copy (which shall not constitute notice) to:

 

Baker Botts L.L.P.

98 San Jacinto Boulevard

Suite 1500

Austin, Texas 78701

Attention:  Laura L. Tyson, Esq.

Facsimile: (512) 322-8377

 

(c)                                  If to Kayne Anderson Capital Income Partners (QP), LP, Kayne Anderson MLP Fund, LP, Kayne Anderson Midstream Opportunity Fund, LP, ARBCO II, L.P. or Kayne Anderson Energy Total Return Fund, Inc.:

 

Kayne Anderson Capital Advisors, L.P.

Attn: David Shladovsky, Esq.

1800 Avenue of the Stars, 2nd Floor

Los Angeles, CA 90067

Facsimile: (310) 284-6490

 

with a copy (which shall not constitute notice) to:

 

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Kayne Anderson Fund Advisors

Attn: Kevin McCarthy

717 Texas Avenue, Suite 3100

Houston, Texas 77002

Facsimile: (713) 655-7359

 

(d)                                 If to Hartz Capital Investments, LLC:

 

Hartz Capital Investments, LLC

c/o Hartz Capital, Inc.

Attn:  Noah Lerner

400 Plaza Drive

Secaucus, NJ  07094

Facsimile: (201) 866-6387

 

with a copy (which shall not constitute notice) to:

 

Hartz Capital Investments, LLC

c/o Hartz Capital, Inc.

Attn:  Tim Terry

400 Plaza Drive

Secaucus, NJ  07094

Facsimile: (201) 866-6387

 

(e)                                  If to Tortoise Energy Capital Corporation:

 

Tortoise Energy Capital Corporation

10801 Mastin Blvd., Suite 222

Overland Park, KS  66210

Attention: Zach Hamel

 

or to such other address as MarkWest or such Purchaser may designate in writing. All notices and communications shall be deemed to have been duly given at the time delivered by hand, if personally delivered; upon actual receipt if sent by registered or certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile or electronic mail; and upon actual receipt when delivered by an air courier guaranteeing overnight delivery.

 

Section 6.07           Removal of Legend.  MarkWest shall promptly remove the legend described in Section 4.08 from the certificates evidencing the Purchased Units at the request of a Purchaser submitting to MarkWest such certificates, together with an opinion of counsel of such Purchaser and other documentation, if required by MarkWest’s transfer agent, to the effect that such legend is no longer required under the Securities Act or applicable state securities Laws, as the case may be; provided that no opinion of counsel shall be required by MarkWest in the event a Purchaser is effecting a sale of such Purchased Units pursuant to and in accordance with Rule 144 under the Securities Act or an effective registration statement and (i) the transfer agent does not require an opinion of counsel or (ii) the Purchaser provides counsel to MarkWest with such

 

21



 

certificates or other evidence reasonably requested in order for such counsel to render an opinion to the transfer agent.  All costs associated with any opinion required by the transfer agent pursuant to any such removal shall be paid by MarkWest.

 

Section 6.08           Entire Agreement.  This Agreement, the other Basic Documents and the other agreements and documents referred to herein are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein with respect to the rights granted by MarkWest or any of its Affiliates or each of the Purchasers or any of their Affiliates set forth herein or therein.  This Agreement, the other Basic Documents and the other agreements and documents referred to herein supersede all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 6.09           Governing Law.  This Agreement will be construed in accordance with and governed by the laws of the State of Delaware without regard to principles of conflicts of laws.

 

Section 6.10           Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

 

Section 6.11           Expenses.  MarkWest hereby covenants and agrees to reimburse Magnetar Spectrum Fund or any of its Affiliates for the reasonable and documented legal expenses of Baker Botts L.L.P. incurred in connection with the negotiation, execution, delivery and performance of the Basic Documents and the transactions contemplated hereby and thereby, up to $40,000.00.  Upon MarkWest’s request, any request for such reimbursement by Purchasers shall be accompanied by a detailed invoice for such amount.  If any action at law or equity is necessary to enforce or interpret the terms of the Basic Documents, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

Section 6.12           Waiver of Preemptive Right.  Other than the obligation of MarkWest GP to make contributions to MarkWest as required by Section 5.2 of the Partnership Agreement, MarkWest GP hereby waives (for itself and on behalf of its Affiliates) its preemptive rights provided under Section 5.9 of the Partnership Agreement with respect to the issuances of Partnership Securities pursuant to this Agreement.

 

[The remainder of this page is intentionally left blank.]

 

22



 

IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.

 

MARKWEST ENERGY PARTNERS, L.P.

 

 

 

By:

MarkWest Energy GP, L.L.C.,

 

its general partner

 

 

 

 

By:

/s/ NANCY K. BUESE

 

 

Nancy K. Buese

 

 

Chief Financial Officer

 

 

 

 

 

 

MARKWEST ENERGY GP, L.L.C.

(solely for the purpose of Section  6.12)

 

 

 

 

By:

/s/ NANCY K. BUESE

 

 

Nancy K. Buese

 

 

Chief Financial Officer

 



 

MAGNETAR SPECTRUM FUND

 

 

 

By:

Magnetar Financial LLC,

 

its investment manager

 

 

 

By:

/s/ PAUL SMITH

 

Name:

Paul Smith

 

Title:

General Counsel

 



 

KAYNE ANDERSON MLP FUND, LP

 

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

its general partner

 

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

David Shladovsky

 

 

General Counsel

 

 

 

 

 

 

 

 

KAYNE ANDERSON CAPITAL INCOME PARTNERS (QP), LP

 

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

its general partner

 

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

David Shladovsky

 

 

General Counsel

 

 

 

 

 

 

 

 

KAYNE ANDERSON MIDSTREAM OPPORTUNITY FUND, LP

 

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

its general partner

 

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

David Shladovsky

 

 

General Counsel

 

 

 

 

 

 

 

 

ARBCO II, L.P.

 

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

its general partner

 

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

David Shladovsky

 

 

General Counsel

 



 

KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.

 

 

 

By:

/s/ JAMES C. BAKER

 

James C. Baker

 

Vice President

 



 

TORTOISE ENERGY CAPITAL CORPORATION

 

 

 

By:

/s/ DAVID J. SCHULTE

 

Name:

David J. Schulte

 

Title:

Chief Executive Officer

 



 

HARTZ CAPITAL INVESTMENTS, LLC

 

 

 

By:

Hartz Capital, Inc.

 

its manager

 

 

 

 

By:

/s/ RONALD J. BANGS

 

 

Ronald J. Bangs

 

Title:

Chief Operating Officer

 



 

Exhibit A — Form of Registration Rights Agreement

 

[Omitted]

 



 

Exhibit B — Partnership Agreement and Certificate of Limited Partnership

 

[Omitted]

 



 

Exhibit C — Form of Opinion of MarkWest Counsel

 

[Omitted]

 



 

Schedule 1.01

 

Cory Bromley

Nancy K. Buese

John Mollenkopf

Randy S. Nickerson

Andrew L. Schroeder

Frank M. Semple

 



 

Schedule 2.02

 

Purchaser

 

Units Purchased

 

Total Purchase
Price

 

Magnetar Spectrum Fund

 

1,904,762

 

$

60,000,003.00

 

Kayne Anderson Capital Income Partners (QP), LP

 

19,842

 

625,023.00

 

Kayne Anderson MLP Fund, LP

 

109,127

 

3,437,500.50

 

Kayne Anderson Midstream Opportunity Fund, LP

 

19,842

 

625,023.00

 

ARBCO II, L.P.

 

9,921

 

312,511.50

 

Kayne Anderson Energy Total Return Fund, Inc.

 

158,731

 

5,000,026.50

 

Tortoise Energy Capital Corporation

 

317,461

 

10,000,021.50

 

Hartz Capital Investments, LLC

 

317,461

 

10,000,021.50

 

 

 

 

 

 

 

Total

 

2,857,147

 

$

90,000,130.50

 

 



 

Schedule 3.02

 

MarkWest Energy Appalachia, L.L.C.

 

MarkWest Energy East Texas Gas Company, L.P.

 

MarkWest Energy Operating Company, L.L.C.

 

MarkWest Javelina Pipeline Holding, L.P.

 

MarkWest Javelina Holding Company, L.P.

 

MarkWest Pinnacle L.P.

 

MarkWest Texas GP, L.L.C.

 

MW Texas Limited, L.L.C.

 

MarkWest Western Oklahoma Gas Company, L.L.C.

 


EX-10.2 3 a07-31470_2ex10d2.htm EX-10.2

 

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

by and among

MARKWEST ENERGY PARTNERS, L.P.

AND

THE PURCHASERS PARTY HERETO

 



 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of December 18, 2007, by and among MARKWEST ENERGY PARTNERS, L.P. (“MarkWest”) and each of the purchasers set forth on Schedule A hereto (each a “Purchaser” and collectively, the “Purchasers”).  Capitalized terms used herein without definition shall have the meanings given to them in the Purchase Agreement.

 

This Agreement is made in connection with the Closing of the issuance and sale of the Purchased Units pursuant to the Unit Purchase Agreement, dated as of December 18, 2007, by and among MarkWest, MarkWest Energy GP, L.L.C. and the Purchasers (the “Purchase Agreement”).  MarkWest has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Purchasers pursuant to Section 2.03(a)(iv) of the Purchase Agreement. In consideration of the mutual covenants and agreements set forth herein and in the Purchase Agreement and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto, the parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.01           Definitions.  The terms set forth below are used herein as so defined:

 

Affiliate” means, with respect to a specified Person, any other Person, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative meanings, “controlling,” “controlled by,” and “under common control with”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

Agreement” has the meaning specified therefor in the introductory paragraph hereof.

 

Business Day” means any day other than a Saturday, Sunday, or a legal holiday for commercial banks in New York, New York.

 

Commission” means the United States Securities and Exchange Commission.

 

Common Units” means the common units of MarkWest.

 

Effectiveness Period” means the period beginning on the date a Registration Statement first is declared effective under the Securities Act and ending on the date all Registrable Securities covered by such Registration Statement have been distributed in the manner set forth and as contemplated in such Registration Statement.

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

 

Holder” means the record holder of any Registrable Securities.

 

1



 

Included Registrable Securities” has the meaning specified therefor in Section 2.02(a) of this Agreement.

 

Liquidated Damages Amount” means an amount equal to 1.00% of the product of $31.50 times the number of Registrable Securities held by such Holder per 30-day period.  The Liquidated Damages Amount for any period of less than 30 days shall be prorated by multiplying the Liquidated Damages Amount to be paid in a full 30-day period by a fraction, the numerator of which is the number of days for which such liquidated damages are owed, and the denominator of which is 30.

 

Losses” has the meaning specified therefor in Section 2.08(a) of this Agreement.

 

Managing Underwriter” means, with respect to any Underwritten Offering, the book running lead manager of such Underwritten Offering.

 

MarkWest” has the meaning specified therefor in the introductory paragraph of this Agreement.

 

MarkWest Hydrocarbon” means MarkWest Hydrocarbon, Inc., a Delaware corporation.

 

Opt Out Notice” has the meaning specified therefor in Section 2.02(a).

 

Person” means any individual, corporation, company, voluntary association, partnership, joint venture, trust, limited liability company, unincorporated organization, government or any agency, instrumentality or political subdivision thereof, or any other form of entity.

 

Prior Holders” means each investor party to (i) the Registration Rights Agreement dated April 9, 2007, by and among MarkWest and each party listed on Schedule A thereto, (ii) the Registration Rights Agreement dated November 9, 2005, by and among MarkWest and each party listed on Schedule A thereto or (iii) each investor party to the Registration Rights Agreement dated December 23, 2005 by and among MarkWest and each party listed on Schedule A thereto.

 

Purchase Agreement” has the meaning specified therefor in the introductory paragraph of this Agreement.

 

Purchased Units” shall have the meaning set forth in the Purchase Agreement.

 

Purchaser” and “Purchasers” each has the meaning specified therefor in the introductory paragraph of this Agreement.

 

Registrable Securities” means the Common Units comprising the Purchased Units until such time as such securities cease to be Registrable Securities pursuant to Section 1.02 hereof.

 

Registration Expenses” has the meaning specified therefor in Section 2.07(a) of this Agreement.

 

2



 

Registration Statement” means a registration statement under the Securities Act to permit the public sale of securities from time to time.

 

Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

 

Selling Expenses” has the meaning specified therefor in Section 2.07(a) of this Agreement.

 

Selling Holder” means a Holder who is selling Registrable Securities pursuant to a Registration Statement.

 

Selling Holder Indemnified Person” has the meaning specified in Section 2.08(a) of this Agreement.

 

Underwritten Offering” means an offering (including an offering pursuant to a Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

 

Section 1.02           Registrable Securities.  Any Registrable Security will cease to be a Registrable Security when (a) a Registration Statement covering such Registrable Security becomes or is declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective Registration Statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in force) under the Securities Act; (c) such Registrable Security is held by MarkWest or one of its subsidiaries; or (d) such Registrable Security has been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.10 hereof.

 

Section 1.03           Rights and Obligations.  Except for the rights and obligations under Section 2.08 herein, all rights and obligations of each Purchaser under this Agreement, and all rights and obligations of MarkWest under this Agreement with respect to such Purchaser, shall terminate when such Purchaser is no longer a Holder.

 

ARTICLE II
REGISTRATION RIGHTS

 

Section 2.01           Reserved.

 

Section 2.02           Piggyback Rights.

 

(a)           Participation.  If MarkWest, other than in connection with the Hydrocarbon Acquisition, at any time proposes to (i) file a prospectus supplement to an effective shelf registration statement with respect to an Underwritten Offering of Common Units, (ii) register any Common Units for its own account for sale to the public in an Underwritten Offering other than, in the case of this clause (ii), (a) a registration relating solely to employee benefit plans, (b) a registration relating solely to a Rule 145 transaction, or (c) a registration on any registration

 

3



 

form which does not permit secondary sales, or (iii) register any Common Units on behalf of any other person for the sale of Common Units in an Underwritten Offering, then, as soon as practicable following the engagement of counsel by MarkWest to prepare the documents to be used in connection with an Underwritten Offering, MarkWest shall give written notice of such proposed Underwritten Offering to the Holders and such notice shall offer the Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities as each such Holder may request in writing; provided, however, that MarkWest shall not be required to offer such opportunity to Holders to the extent MarkWest has been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have a materially adverse effect on the price, timing or distribution of the Common Units.  The notice required to be provided in this Section 2.02(a) to Holders shall be provided on a Business Day pursuant to Section 3.01 hereof and receipt of such notice shall be confirmed by the Holder.  Subject to Section 2.02(b), MarkWest shall include in such Underwritten Offering all such Registrable Securities (“Included Registrable Securities”) with respect to which MarkWest has received requests within one Business Day after MarkWest’s notice has been delivered in accordance with Section 3.01.  If no request for inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate in such Underwritten Offering.  If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, MarkWest shall determine for any reason not to undertake or to delay such Underwritten Offering, MarkWest may, at its election, give written notice of such determination to the Selling Holders and, (i) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (ii) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such Underwritten Offering by giving written notice to MarkWest of such withdrawal up to and including the time of pricing of such Underwritten Offering.  No Holders shall be entitled to participate in any such Underwritten Offering under this Section 2.02(a) unless such Holder (together with any Affiliate that owns Registrable Securities and is a Selling Holder) holds at least $5 million of Registrable Securities in such offering (determined by multiplying the number of Registrable Securities owned by the average of the closing price for Common Units for the ten (10) trading days preceding the date of such notice).  Notwithstanding the foregoing, any Holder may deliver written notice (an “Opt Out Notice”) to the Company requesting that such Holder not receive notice from the Company of any proposed Underwritten Offering; provided that any such Holder may later revoke any such notice.

 

(b)           Priority of Piggyback Registration.  If the Managing Underwriter or underwriters of any proposed Underwritten Offering of Common Units advises MarkWest in writing that the total amount of Common Units which the Selling Holders and any other Persons intend to include in such Underwritten Offering exceeds the number which can be sold in such offering without being likely to have a materially adverse effect on the price, timing or distribution of the Common Units offered or the market for the Common Units, then the Common Units to be included in such Underwritten Offering shall include the number of Common Units that such Managing Underwriter or underwriters advises MarkWest can be sold without having such materially adverse effect, with such number to be allocated pro rata among the Selling Holders

 

4



 

and Prior Holders having a right to (and having requested to) participate in such Underwritten Offering pursuant to a valid and enforceable registration rights agreement with MarkWest (based, for each such Selling Holder or Prior Holder, as applicable, on the percentage derived by dividing (A) the number of Registrable Securities or other registrable securities entitled to be included in an Underwritten Offering, proposed to be sold by such Selling Holder or Prior Holder in such offering; by (B) the aggregate number of Common Units proposed to be sold by, as the case may be, the Selling Holders and Prior Holders participating in the Underwritten Offering).

 

(c)           Termination of Piggyback Rights.  The right to piggyback on an Underwritten Offering granted pursuant to this Section 2.02 shall be unlimited in number and shall terminate the later of (i) two years following the Closing Date and (ii) the date on which all Registrable Securities cease to be Registrable Securities hereunder in accordance with Section 1.02.

 

Section 2.03           Underwritten Offering.

 

(a)           Request by Holders.  At any time more than 60 days following (i) the consummation of the Hydrocarbon Acquisition or (ii) the termination of the Hydrocarbon Purchase Agreement, upon the written request of one or more Holders, MarkWest shall engage underwriters and enter into an underwriting agreement in customary form with the Managing Underwriter or underwriters, which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08, and shall take all such other reasonable actions as are requested by the Managing Underwriter in order to expedite or facilitate the registration and disposition of the Registrable Securities; provided, however, such Holders reasonably anticipate gross proceeds from such offering of at least twenty million dollars ($20,000,000), in the aggregate (determined by multiplying the number of Registrable Securities owned by the average of the closing price for Common Units for the ten (10) trading days preceding the date of such request).  MarkWest shall be required to cause appropriate officers of MarkWest or its Affiliates to participate in a “road show” or similar marketing effort being conducted by such underwriter with respect to such Underwritten Offering only if the Holders reasonably anticipate gross proceeds from such Underwritten Offering of at least forty million dollars ($40,000,000) (determined by multiplying the number of Registrable Securities owned by the average of the closing price for Common Units for the ten (10) trading days preceding the date of such request).

 

(b)           General Procedures.  In connection with any Underwritten Offering under this Agreement (except for Underwritten Offerings pursuant to Section 2.03(a)), MarkWest shall be entitled to select the Managing Underwriter or underwriters, each of which must be a nationally-recognized firm.  In the case of an Underwritten Offering pursuant to Section 2.03(a) hereof, the Selling Holders in such Underwritten Offering shall be entitled to select the Managing Underwriter or underwriters, each of which must be a nationally recognized firm.  In the event there is more than one Selling Holder, each Selling Holder shall be entitled to vote for the selection of the Managing Underwriter and shall be entitled to the number of votes equal to the number of Registrable Securities being offered for sale pursuant to such Underwritten Offering, with the majority vote of such Selling Holders determining the Managing Underwriter.  In connection with an Underwritten Offering under Section 2.01 or 2.02 hereof, each Selling Holder and MarkWest shall be obligated to enter into an underwriting agreement which contains such representations, covenants, indemnities and other rights and obligations as are customary in

 

5



 

underwriting agreements for firm commitment offerings of securities.  No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement.  Each Selling Holder may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, MarkWest to and for the benefit of such underwriters also be made to and for such Selling Holder’s benefit and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to its obligations. No Selling Holder shall be required to make any representations or warranties to or agreements with MarkWest or the underwriters other than representations, warranties or agreements regarding such Selling Holder and its ownership of the securities being registered on its behalf and its intended method of distribution and any other representation required by law.  If any Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect to withdraw therefrom by notice to MarkWest and the Managing Underwriter; provided, however, that such withdrawal must be made up to and including the time of pricing to be effective.  No such withdrawal or abandonment shall affect MarkWest’s obligation to pay Registration Expenses.

 

Section 2.04           Registration Procedures.  In connection with its obligations contained in Sections 2.02 and 2.03, MarkWest will, as expeditiously as possible:

 

(a)           prepare and file with the Commission such amendments and supplements to a Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Registration Statement;

 

(b)           furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing any registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing the Registration Statement or supplement or amendment thereto, and (ii) such number of copies of the Registration Statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holders may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement;

 

(c)           if applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by a Registration Statement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request, provided that MarkWest will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so

 

6



 

qualify or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject;

 

(d)           promptly notify each Selling Holder and each underwriter, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the filing of a Registration Statement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and when the same has become effective; and (ii) any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for amendments or supplements to a Registration Statement or any prospectus or prospectus supplement thereto;

 

(e)           immediately notify each Selling Holder and each underwriter, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; (ii) the issuance or threat of issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement, or the initiation of any proceedings for that purpose; or (iii) the receipt by MarkWest of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction.  Following the provision of such notice, MarkWest agrees to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and to take such other action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

 

(f)            furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;

 

(g)           in the case of an Underwritten Offering, furnish upon request to a Selling Holder, (i) an opinion of counsel for MarkWest, dated the effective date of the applicable Registration Statement or the date of any amendment or supplement thereto, and a letter of like kind dated the date of the closing under the underwriting agreement, and (ii) a “cold comfort” letter, dated the effective date of the applicable Registration Statement or the date of any amendment or supplement thereto and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified MarkWest’s financial statements included or incorporated by reference into the applicable Registration Statement, and each of the opinion and the “cold comfort” letter shall be in customary form and covering substantially the same matters with respect to such Registration Statement (and the prospectus and any prospectus supplement included therein) and as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the

 

7



 

underwriters in Underwritten Offerings of securities, such other matters as such underwriters may reasonably request;

 

(h)           otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more than 18 months, beginning with the first full calendar month after the effective date of such Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

 

(i)            make available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and MarkWest personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided that MarkWest need not disclose any information to any such representative unless and until such representative has entered into a confidentiality agreement with MarkWest;

 

(j)            cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by MarkWest are then listed;

 

(k)           use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of MarkWest to enable the Selling Holders to consummate the disposition of such Registrable Securities;

 

(l)            provide a transfer agent and registrar for all Registrable Securities covered by such Registration Statement not later than the effective date of such Registration Statement; and

 

(m)          enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of such Registrable Securities.

 

Each Selling Holder, upon receipt of notice from MarkWest of the happening of any event of the kind described in subsection (e) of this Section 2.04, shall forthwith discontinue disposition of the Registrable Securities until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.04 or until it is advised in writing by MarkWest that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by MarkWest, such Selling Holder will, or will request the Managing Underwriter or underwriters, if any, to deliver to MarkWest (at MarkWest’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

Section 2.05           Cooperation by Holders.  MarkWest shall have no obligation to include Registrable Securities of a Holder in a Registration Statement who has failed to timely furnish such information which, in the opinion of counsel to MarkWest, is reasonably required in order

 

8



 

for a Registration Statement or prospectus supplement, as applicable, to comply with the Securities Act.

 

Section 2.06           Restrictions on Public Sale by Holders of Registrable Securities.  Each Holder of Registrable Securities who is included in a Registration Statement agrees not to effect any public sale or distribution of Registrable Securities during the 30 calendar day period beginning on the date of a prospectus supplement or prospectus filed with the Commission with respect to the pricing of an Underwritten Offering, provided that the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the officers or directors or any other unitholder of MarkWest on whom a restriction is imposed; and provided further, that the restrictions under this Section 2.06 shall not apply (i) to any Holder that is not otherwise eligible to participate in such Underwritten Offering pursuant to Section 2.02(a), (ii) to the sale or distribution of Registrable Securities in such Underwritten Offering pursuant to Section 2.02(a) or (iii) has submitted an Opt Out Notice.

 

Section 2.07           Expenses.

 

(a)           Certain Definitions.  “Registration Expenses” means all expenses incident to MarkWest’s performance under or compliance with this Agreement to effect the registration of Registrable Securities in a Registration Statement, or otherwise pursuant to Section 2.03, and the disposition of such securities, including, without limitation, all registration, filing, securities exchange listing and American Stock Exchange or other securities exchange or listing fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the National Association of Securities Dealers, Inc., transfer taxes and fees of transfer agents and registrars, all word processing, duplicating and printing expenses, the fees and disbursements of counsel and independent public accountants for MarkWest, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance.  Except as otherwise provided in Section 2.08 hereof, MarkWest shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.  In addition, MarkWest shall not be responsible for any “Selling Expenses,” which means all underwriting fees, discounts and selling commissions allocable to the sale of the Registrable Securities.

 

(b)           Expenses.  MarkWest will pay all Registration Expenses in connection with any Registration Statement, whether or not the applicable Registration Statement becomes effective or any sale is made pursuant to such Registration Statement. Each Selling Holder shall pay all Selling Expenses in connection with any sale of its Registrable Securities hereunder.

 

Section 2.08           Indemnification.

 

(a)           By MarkWest.  In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, MarkWest will indemnify and hold harmless each Selling Holder thereunder, its Affiliates that own Registrable Securities and their respective directors and officers, and each underwriter, pursuant to the applicable underwriting agreement with such underwriter, of Registrable Securities thereunder and each Person, if any, who controls such Selling Holder or underwriter within the meaning of the Securities Act and the Exchange Act (collectively, the “Selling Holder Indemnified Persons”), against any losses, claims,

 

9



 

damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively, “Losses”), joint or several, to which such Selling Holder Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in a Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or 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 (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse each such Selling Holder Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings as such expenses are incurred; provided, however, that MarkWest will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Selling Holder Indemnified Person in writing specifically for use in a Registration Statement or such other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder Indemnified Person, and shall survive the transfer of such securities by such Selling Holder.

 

(b)           By Each Selling Holder.  Each Selling Holder agrees severally and not jointly to indemnify and hold harmless MarkWest, its Affiliates and their respective directors and officers, and each Person, if any, who controls MarkWest within the meaning of the Securities Act or of the Exchange Act to the same extent as the foregoing indemnity from MarkWest to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in a Registration Statement or prospectus supplement relating to the Registrable Securities, or any amendment or supplement thereto; provided, however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

 

(c)           Notice.  Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under this Section 2.08.  In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof.  The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume the defense and employ counsel or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to

 

10



 

the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred.  Notwithstanding any other provision of this Agreement, no indemnifying party, without the consent of the indemnified party, shall settle any action in respect for which indemnification may be sought hereunder, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnified party.

 

(d)           Contribution.  If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to MarkWest or any Selling Holder or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses as between MarkWest on the one hand and such Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of MarkWest on the one hand and of such Selling Holder (or other indemnified party) on the other in connection with the statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification.  The relative fault of MarkWest on the one hand and each Selling Holder on the other 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 has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this paragraph.  The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss which is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

 

(e)           Other Indemnification.  The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution which an indemnified party may have pursuant to law, equity, contract or otherwise.

 

11



 

Section 2.09           Rule 144.

 

(a)           Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, MarkWest shall:

 

(i)            make and keep public information regarding MarkWest available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;

 

(ii)           file with the Commission in a timely manner all reports and other documents required of MarkWest under the Securities Act and the Exchange Act at all times from and after the date hereof;

 

(iii)          so long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a copy of the most recent annual or quarterly report of MarkWest, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration; and

 

(iv)          take such additional actions as may be reasonably required to permit the sale of the Registrable Securities pursuant to Rule 144 as a result of subsequent amendments or modifications thereto.

 

(b)           Failure to Timely File Required Documents with the Commission.

 

(i)            If MarkWest fails for any reason to comply with the provisions of Section 2.09(a) during the period beginning on the date which is six months from the date hereof and ending one year from the date hereof, then MarkWest shall pay each Holder an amount equal to the Liquidated Damages Amount for those days in excess of ten days in the aggregate on which such Holder is unable to sell its Purchased Units pursuant to Rule 144 under the Securities Act as a result of such failure to comply with Section 2.09(a).  Any such amounts shall be paid as liquidated damages and not as a penalty.

 

(ii)           The Liquidated Damages Amount shall accrue on a daily basis and shall be paid to each Holder within five Business Days of end of the month in which it accrues.  Any payments made pursuant to this Section 2.09(b) shall constitute the Holders’ exclusive remedy for such events.  The Liquidated Damages Amount imposed hereunder shall be made to the Holders in immediately available funds.

 

Section 2.10           Transfer or Assignment of Registration Rights.  The rights granted to the Holders by MarkWest under this Article II may be transferred or assigned by one or more Holders to one or more transferee(s) or assignee(s) of such Registrable Securities, provided that (a) unless such transferee is a Holder or an Affiliate of the transferring Holder, or the transfer is to a swap counterparty, following such transfer or assignment, each such transferee or assignee owns Registrable Securities representing at least ten million dollars ($10,000,000) of Registrable Securities (determined by multiplying the number of Registrable Securities owned by the average of the closing price for Common Units for the ten (10) trading days preceding the date of

 

12



 

such transfer or assignment) or MarkWest otherwise consents to such transfer or assignment, (b) MarkWest is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee and identifying the securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee assumes in writing responsibility for its portion of the obligations of such Holder under this Agreement (unless it is already a party to this Agreement).

 

Section 2.11           Limitation on Subsequent Registration Rights.  From and after the date hereof, MarkWest shall not, without the prior written consent of the Holders of 66 2/3% of the outstanding Registrable Securities, enter into any agreement with any current or future holder of any securities of MarkWest that would allow such current or future holder to require MarkWest to include securities in any Registration Statement filed by MarkWest on a basis other than pari passu with, or subject to priority in favor of, the Purchasers hereunder, except as contemplated under the Hydrocarbon Purchase Agreement.

 

Section 2.12           Registration.  Any Registration Statement contemplated by this Agreement when declared effective (including the documents incorporated therein by reference) will comply as to form with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

ARTICLE III
MISCELLANEOUS

 

Section 3.01           CommunicationsAll notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, internet electronic mail, courier service or personal delivery:

 

(a)           if to the Purchasers, at the most current addresses given by the Purchasers to MarkWest in accordance with the provisions of this Section 3.01, which addresses initially are, with respect to the Purchasers, the addresses set forth in the Purchase Agreement,

 

(b)           if to a transferee of the Purchaser, to such Holder at the address provided pursuant to Section 2.10 above, and

 

(c)           if to MarkWest, at 1515 Arapahoe, Tower 2, Suite 700, Denver, Colorado 80202, notice of which is given in accordance with the provisions of this Section 3.01.

 

                All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via Internet electronic mail; and when actually received, if sent by courier service or any other means.

 

Section 3.02           Successor and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

 

13



 

Section 3.03           Assignment of Rights.  All or any portion of the rights and obligations of the Purchasers under this Agreement may be transferred or assigned by the Purchasers in accordance with Section 2.10 hereof.

 

Section 3.04           Recapitalization, Exchanges, etc. Affecting the Common Units.  The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all units of MarkWest or any successor or assign of MarkWest (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, recapitalizations and the like occurring after the date of this Agreement.

 

Section 3.05           Specific Performance.  Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief.  The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity which such Person may have.

 

Section 3.06           Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

 

Section 3.07           Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 3.08           Governing Law.  The laws of the State of Delaware shall govern this Agreement without regard to principles of conflict of laws.

 

Section 3.09           Severability of Provisions.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

 

Section 3.10           Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by MarkWest set forth herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.11           Amendment.  This Agreement may be amended only by means of a written amendment signed by MarkWest and the Holders of a majority of the then outstanding

 

14



 

Registrable Securities; provided, however, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.

 

Section 3.12           No Presumption.  In the event any claim is made by a party relating to any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

 

Section 3.13           Aggregation of Registrable Securities.  All Registrable Securities held or acquired by any Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

[The remainder of this page  is intentionally left blank.]

 

15



 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

MARKWEST ENERGY PARTNERS, L.P.

 

 

 

By:

MarkWest Energy GP, L.L.C.,

 

its general partner

 

 

 

By:

/s/ NANCY K. BUESE

 

Name:

Nancy K. Buese

 

Title:

SVP & Chief Financial Officer

 



 

MAGNETAR SPECTRUM FUND

 

 

 

 

By:

Magnetar Financial LLC,

 

its investment manager

 

 

 

 

 

By:

/s/ PAUL SMITH

 

 

Name:

Paul Smith

 

 

Title:

General Counsel

 



 

KAYNE ANDERSON MLP FUND, LP

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

its general partner

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

David Shladovsky

 

 

General Counsel

 

 

KAYNE ANDERSON CAPITAL INCOME PARTNERS (QP), LP

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

its general partner

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

David Shladovsky

 

 

General Counsel

 

 

KAYNE ANDERSON MIDSTREAM OPPORTUNITY FUND, LP

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

its general partner

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

David Shladovsky

 

 

General Counsel

 

 

ARBCO II, L.P.

 

 

 

 

By:

Kayne Anderson Capital Advisors, L.P.,

 

 

its general partner

 

 

 

 

 

 

By:

/s/ DAVID SHLADOVSKY

 

 

 

David Shladovsky

 

 

 

General Counsel

 

 



 

KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.

 

 

By:

/s/ JAMES C. BAKER

 

James C. Baker

 

Vice President

 



 

TORTOISE ENERGY CAPITAL CORPORATION

 

 

 

 

By:

/s/ DAVID J. SCHULTE

 

Name:

David J. Schulte

 

Title:

Chief Executive Officer

 



 

HARTZ CAPITAL INVESTMENTS, LLC

 

 

 

By:

Hartz Capital, Inc.

 

its manager

 

 

 

 

By:

/s/ RONALD J. BANGS

 

 

Ronald J. Bangs

 

 

Chief Operating Officer

 



 

Schedule A

 

Purchaser

 

Units Purchased

 

Total Purchase
Price

 

Magnetar Spectrum Fund

 

1,904,762

 

$

60,000,003.00

 

Kayne Anderson Capital Income Partners (QP), LP

 

19,842

 

625,023.00

 

Kayne Anderson MLP Fund, LP

 

109,127

 

3,437,500.50

 

Kayne Anderson Midstream Opportunity Fund, LP

 

19,842

 

625,023.00

 

ARBCO II, L.P.

 

9,921

 

312,511.50

 

Kayne Anderson Energy Total Return Fund, Inc.

 

158,731

 

5,000,026.50

 

Tortoise Energy Capital Corporation

 

317,461

 

10,000,021.50

 

Hartz Capital Investments, LLC

 

317,461

 

10,000,021.50

 

 

 

 

 

 

 

Total

 

2,857,147

 

$

90,000,130.50

 

 


EX-99.1 4 a07-31470_2ex99d1.htm EX-99.1

 

Exhibit 99.1

 

 

MarkWest Energy Partners, L.P.

Contact:

Frank Semple, President and CEO

1515 Arapahoe Street

 

Nancy Buese, Senior VP and CFO

Tower 2, Suite 700

 

Andy Schroeder, VP of Finance/Treasurer

Denver, CO 80202

Phone:

(866) 858-0482

 

Fax:

(303) 925-8709

 

E-mail

investorrelations@markwest.com

 

Website:

www.markwest.com

 

MarkWest Energy Partners Announces $90 Million Private Placement

 

                DENVER—December 18, 2007—MarkWest Energy Partners, L.P. (NYSE: MWE), announced today that it entered into and closed a definitive agreement for the private placement of approximately 2.9 million newly issued common units at a purchase price of $31.50, for gross proceeds of approximately $90 million, not including the General Partner’s contribution to maintain its two percent general partner interest.  The proceeds of this transaction will be used for general corporate purposes, including working capital, and to fund capital expenditures. Magnetar Capital acted as the lead investor in the private placement.  Other investors in the private placement included funds managed by Kayne Anderson Capital Advisors, L.P.; Tortoise Capital Advisors, LLC; and Hartz Capital Investments, LLC.

 

                “We are very pleased with the strong support from these institutional investors,” said Frank Semple, the Partnership’s President and Chief Executive Officer. “This private placement will fund a significant portion of the equity financing required for our very robust 2008 expansion capital program.”

 

                The securities offered in the private placement have not been registered under the Securities Act of 1933, as amended, (the “Securities Act”), or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities.

 

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MarkWest Energy Partners, L.P. (NYSE:MWE) is a publicly traded master limited partnership with a solid core of midstream assets and a growing core of gas transmission assets. It is one of the largest processors of natural gas in the Northeast and is the largest gas gatherer of natural gas in the prolific Carthage field in east Texas. It also has a growing number of other gas gathering and intrastate gas transmission assets in the Southwest, primarily in Texas and Oklahoma.

 

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements.  Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.  The forward-looking statements involve risks and uncertainties that affect our operations, financial performance and other factors as discussed in our filings with the Securities and Exchange Commission. 

 



 

Among the factors that could cause results to differ materially are those risks discussed in our Form 10-K/A for the year ended December 31, 2006, as filed with the SEC.  You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.”  We do not undertake any duty to update any forward-looking statement.

 

MarkWest Energy Partners and MarkWest Hydrocarbon filed a preliminary joint proxy statement/prospectus and other documents with the Securities and Exchange Commission (the “SEC”) in relation to the merger transaction announced on September 5, 2007.  Investors and security holders are urged to read these documents carefully because they contain important information regarding MarkWest Energy Partners, MarkWest Hydrocarbon, and the transaction. A definitive joint proxy statement/prospectus will be sent to security holders of MarkWest Energy Partners and MarkWest Hydrocarbon seeking their approval of the transactions contemplated by the redemption and merger agreement. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus and other documents containing information about MarkWest Energy Partners and MarkWest Hydrocarbon, without charge, at the SEC’s website at www.sec.gov. Copies of the joint proxy statement/prospectus and the SEC filings that will be incorporated by reference in the joint proxy statement/prospectus may also be obtained free of charge by directing a request to the entities’ investor relations department at 866-858-0482, or by accessing the companies’ website at www.markwest.com.

 

MarkWest Energy Partners, MarkWest Hydrocarbon, the officers and directors of the general partner of MarkWest Energy Partners, and the officers and directors of MarkWest Hydrocarbon may be deemed to be participants in the solicitation of proxies from their security holders. Information about these persons can be found in the Annual Report on Form 10-K/A for the year ended December 31, 2006, for each of MarkWest Energy Partners and MarkWest Hydrocarbon, as filed with the SEC, and additional information about such persons may be obtained from the joint proxy statement/prospectus when it becomes available.

 

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended.

 


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