EXHIBIT 10.2
2d Draft of April 30, 2002
CONTRIBUTION, CONVEYANCE
AND ASSUMPTION AGREEMENT
THIS CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of May __,
2002, is entered into by and among MARKWEST ENERGY PARTNERS, L.P., a Delaware
limited partnership ("MLP"), MARKWEST ENERGY OPERATING COMPANY, L.L.C., a
Delaware limited liability company ("OLP"), MARKWEST ENERGY GP, L.L.C., a
Delaware limited liability company ("GP"), MARKWEST MICHIGAN, INC., a Michigan
corporation ("MICHIGAN"), MARKWEST ENERGY APPALACHIA, L.L.C., a Delaware limited
liability company ("MEA"), WEST SHORE PROCESSING COMPANY, L.L.C., a Michigan
limited liability company ("WEST SHORE") and MARKWEST HYDROCARBON, INC., a
Delaware corporation ("MARKWEST"). Capitalized terms used herein shall have the
meanings assigned to such terms in Section 1.1.
RECITALS
A. MarkWest and GP have formed MLP pursuant to the Delaware Revised Uniform
Limited Partnership Act (the "DELAWARE ACT"), for the purpose of, among other
things, serving as the managing member of OLP, and engaging in any business
activity permitted to be engaged in by GP and OLP pursuant to the Limited
Liability Company Agreement of OLP, including, without limitation, indirectly
acquiring, owning and operating certain of the assets of MarkWest, and of
certain subsidiaries of MarkWest, used in extracting, processing, fractionating,
storing, transporting and distributing natural gas liquid.
B. In order to accomplish the objectives and purposes in the preceding
recital, the following actions have been taken prior to the date hereof pursuant
to that certain Contribution Agreement dated May ___, 2002:
1. MarkWest has formed MEA, to which MarkWest contributed $1,000 in
exchange for all of the membership interests in MEA.
2. MarkWest has formed GP, to which MarkWest contributed $1,000 in
exchange for all of the membership interests in GP.
3. MarkWest and GP have formed MLP, to which MarkWest contributed $980
in exchange for a 98% limited partner interest in MLP, and GP contributed $20 in
exchange for a 2% general partner interest in MLP.
4. The MLP has formed OLP, to which MLP contributed $1000 in exchange
for all of the membership interests in OLP.
C. Concurrently with the consummation of the transactions contemplated
hereby, each of the following matters shall occur:
1. MarkWest will contribute the Assets to MEA as a capital
contribution in exchange for a continuation of MarkWest's 100% membership
interest in MEA and the assumption by MEA of the MarkWest Liabilities.
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2. MarkWest will contribute the MEA Interest to GP as a capital
contribution.
3. GP will contribute the MEA Interest to MLP in exchange for (a) a
continuation of its 2% general partner interest in MLP, (b) the issuance of the
IDRs, (c) 1,792,000 Sub Units representing a 35.1% interest in MLP, (d) the
right to receive $20,100,000 of the proceeds of the OLP Debt, and (e) the right
to receive $16,100,000 for reimbursement of capital expenditures.
4. Michigan will contribute the Basin Interest and the West Shore
Interest to MLP in exchange for (a) 1,208,000 Sub Units representing a 23.7%
interest in MLP, (b) the assumption by MLP of the Michigan Debt, and (c) the
right to receive $400,000 for reimbursement of capital expenditures.
5. The public, through the Underwriters, will contribute $40,000,000
in cash, less the Underwriters' spread of $2,800,000, in exchange for 2,000,000
Common Units, representing a 39.2% interest in MLP.
6. MLP will (a) pay transaction expenses associated with the
Acquisition in the amount of $3,200,000 (exclusive of the Underwriter's spread),
(b) contribute $4,300,000 to Basin, as a capital contribution, which Basin shall
use to retire Basin's debt of $4,300,000; (c) retire the Michigan Debt assumed
by MLP; and (d) reimburse GP $9,900,000 of capitalized expenditures.
7. MLP will contribute its remaining cash (approximately $4,600,000)
and the MEA Interest, Basin Interest and West Shore Interest to OLP as a capital
contribution in exchange for a continuation of its 100% membership interest in
OLP.
8. West Shore will distribute its membership interest in Basin to OLP.
9. OLP will incur the OLP Debt.
10. OLP will distribute $26,700,000 of the proceeds of the OLP Debt to
MLP and the OLP shall retain $2,800,000 of the proceeds of the OLP Debt for
working capital purposes.
11. MLP will distribute $26,300,000 of the funds received from the OLP
Debt to GP, of which distribution a portion equal to $6,200,000 is in
reimbursement of capital expenditures.
12. MLP will distribute $400,000 to Michigan in reimbursement of
capital expenditures.
13. The GP will distribute its Sub Units and $36,200,000 of the funds
received from the MLP to MarkWest.
14. MarkWest will sell 24,864 Sub Units to the Management Group for
$397,824.00.
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15. MarkWest will sell 8.6% of its interest in GP to the Management
Group for $175,440.
16. If the Underwriters exercise their over allotment option (the
"OPTION") to purchase up to 300,000 Common Units, the proceeds of that exercise,
net of the applicable underwriter's spread, shall be used to retire a portion of
the OLP Debt in reimbursement of capital expenditures of MarkWest.
17. The Agreement of Limited Partnership of MLP, the Limited Liability
Company Agreement of OLP and the Limited Liability Company Agreement of GP will
be amended and restated to reflect the applicable matters set forth above and as
contained in this Agreement.
D. In connection with the above described transactions, certain of the
parties have agreed to indemnify other of the parties from and against certain
liabilities.
NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, MLP, OLP, GP, Michigan, MEA, West Shore and MarkWest
undertake and agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 The following capitalized terms shall have the meanings given
below.
(a) "ACQUISITION" means consummation of the transactions contemplated
by the terms of this Agreement.
(b) "AGREEMENT" means this Contribution, Conveyance and Assumption
Agreement.
(c) "ASSETS" means all right, title and interest of MarkWest in and
to the properties and assets set forth in EXHIBIT A attached hereto,
including all assets of every kind, character and description, whether
tangible or intangible, whether real, personal or mixed, whether accrued or
contingent, and wherever located, including, without limitation, all of the
assets necessary to operate the Business, and all right title and interest of
MarkWest to the following:
(1) any and all rights, claims and causes of action that MarkWest
may have under insurance policies or otherwise against any person or
property, whether known or unknown, accrued or contingent, and whether or
not reflected on the books and records of MarkWest, insofar as any of the
same relate to the operation of the assets set forth in EXHIBIT A or the
Business;
(2) all know-how, every trade secret, every customer list and all
other confidential information of every kind relating to the foregoing
properties and rights; and
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(3) all governmental licenses, permits and authorizations of
every kind owned or held by MarkWest in connection with the ownership or
operation of the foregoing properties and rights.
(d) "ASSUMED LIABILITIES" means, collectively, the MarkWest
Liabilities and the Michigan Liabilities, excluding, however, the "Covered
Environmental Losses" as defined in the Omnibus Agreement.
(e) "BASIN" means Basin Pipeline, L.L.C., a Michigan limited liability
company.
(f) "BASIN INTEREST" means Michigan's membership interests in Basin
prior to the Effective Time.
(g) "BUSINESS" means the gas extraction, processing and fractionation
activities of MarkWest as the same was operated immediately prior to the
Acquisition, but expressly excluding (1) marketing of natural gas liquids and
fractionated products, (2) oil and gas exploration and production activities,
and (3) gas gathering, treating and compressing activities related to oil and
gas exploration and production activities.
(h) "CLAIMS" means any and all claims, demands, costs, liabilities
(including, without limitation, liabilities arising by way of active or passive
negligence) and expenses (including court costs and reasonable attorneys' fees)
of every kind, character and description, whether known or unknown, accrued or
contingent, and whether or not reflected on the books and records of MarkWest.
(i) "COMMON UNIT" has the meaning assigned to such term in the
Partnership Agreement.
(j) "CONVEYANCE DOCUMENTS" means the documents attached hereto as
[EXHIBIT B-1 AND EXHIBIT B-2] from MarkWest to MEA, dated the date of this
Agreement. MarkWest may execute and deliver multiple Conveyance Documents as
desirable to expedite recording thereof in the various jurisdictions in which
the Assets are located.
(k) "DELAWARE ACT" has the meaning assigned to such term in Recital A
of this Agreement.
(l) "EFFECTIVE TIME" shall mean 11:00 a.m. New York, New York time on
May __, 2002.
(m) "EXCLUDED LIABILITIES" means (1) all of the income tax liabilities
of MarkWest and Michigan, and (2) all of the liabilities arising from or related
to MarkWest's ownership or operation of the Assets and Michigan's ownership of
the Basin Interest and West Shore Interest prior to the Effective Time;
provided, Excluded Liabilities does not include "Covered Environmental Losses"
as defined in the Omnibus Agreement.
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(n) "GP" has the meaning assigned to such term in the opening
paragraph of this Agreement.
(o) "IDRS" means "Incentive Distribution Rights" as such term is
defined in the Partnership Agreement.
(p) "LAWS" means any and all laws, statutes, ordinances, rules or
regulations promulgated by a governmental authority, orders of a governmental
authority, judicial decisions, decisions of arbitrators or determinations of any
governmental authority or court.
(q) "LIMITED PARTNER INTEREST" has the meaning assigned to such term
in Section 2.2 hereof.
(r) "MANAGEMENT GROUP" means the individuals listed in EXHIBIT C
hereto.
(s) "MARKWEST" has the meaning assigned to such term in the opening
paragraph of this Agreement.
(t) "MARKWEST LIABILITIES" means all liabilities, including the
MarkWest Trade Payables, arising out of or related to the ownership or operation
of the Assets, or the ownership or conduct of MEA, to the extent arising or
accruing on and after the Effective Time, whether known or unknown, accrued or
contingent, and whether or not reflected on the books and records of MarkWest,
except the Excluded Liabilities.
(u) "MARKWEST TRADE PAYABLES" means the current trade payables owed by
MarkWest in the amount of $4,600,000.
(v) "MEA" has the meaning assigned to such term in the opening
paragraph of this Agreement.
(w) "MEA INTEREST" means the membership interests in MEA.
(x) "MICHIGAN" has the meaning assigned to such term in the opening
paragraph of this Agreement.
(y) "MICHIGAN DEBT" means debt owed by Michigan in the amount of
$15,200,000.
(z) "MICHIGAN LIABILITIES" means all of the liabilities, including
the Michigan Debt, arising out of or related to the ownership or operation of
Basin and West Shore, or the Basin Interest and West Shore Interest, to the
extent arising or accruing on and after the Effective Time, whether known or
unknown, accrued or contingent, and whether or not reflected on the books and
records of Michigan, except the Excluded Liabilities.
(aa) "MLP" has the meaning assigned to such term in the opening
paragraph of this Agreement.
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(bb) "OLP" has the meaning assigned to such term in the opening
paragraph of this Agreement.
(cc) "OLP DEBT" means new borrowing on debt by OLP in the approximate
amount of $29,500,000, which shall be nonrecourse to MarkWest and its
subsidiaries; provided, however, such debt shall be with recourse to GP and MLP.
(dd) "OMNIBUS AGREEMENT" means that certain Omnibus Agreement of even
date herewith, among MarkWest, GP, MLP and OLP.
(ee) "OPTION" has the meaning assigned to such term in Recital C16 of
this Agreement.
(ff) "PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement
of Limited Partnership of MarkWest Energy Partners, L.P. dated as of
______________, 2002.
(gg) "RESTRICTION" has the meaning assigned to such term in Section
9.2 hereof.
(hh) "RESTRICTION-ASSET" has the meaning assigned to such term in
Section 9.2 hereof.
(ii) "SUB UNIT" means "Subordinated Unit" as such term is defined in
the Partnership Agreement.
(jj) "UNDERWRITERS" means X.X. Xxxxxxx & Sons, Inc., RBC Capital
Markets and McDonald Investments, Inc.
(kk) "WEST SHORE" has the meaning assigned to such term in the opening
paragraph of this Agreement.
(ll) "WEST SHORE INTEREST" means Michigan's membership interests in
West Shore prior to the Effective Time.
ARTICLE 2
CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS
Section 2.1 CONTRIBUTION OF THE ASSETS BY MARKWEST TO MEA. MarkWest hereby
grants, contributes, bargains, sells, conveys, assigns, transfers, sets over and
delivers to MEA, its successors and assigns, for its and their own use forever,
all right, title and interest of MarkWest in and to the Assets in exchange for
(a) the continuation of MarkWest's 100% membership interest in MEA, (b) the
assumption by MEA of the MarkWest Liabilities as set forth in Section 4.1
hereof, and (c) other good and valuable consideration, the sufficiency of which
is hereby acknowledged, and MEA hereby accepts the Assets as a contribution to
the capital of MEA. To further evidence this conveyance with respect to the real
property included in the Assets, MarkWest will execute and deliver the
Conveyance Documents to MEA.
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TO HAVE AND TO HOLD the Assets unto MEA, its successors and assigns, together
with all and singular the rights and appurtenances thereto in any way belonging,
subject, however, to the terms and conditions stated in this Agreement, forever.
Section 2.2 CONTRIBUTION OF THE MEA INTEREST BY MARKWEST TO GP. MarkWest
hereby grants, contributes, bargains, sells, conveys, assigns, transfers, sets
over and delivers to GP, its successors and assigns, for its and their own use
forever, all right, title and interest of MarkWest in and to the MEA Interest in
exchange for (a) the continuation of MarkWest's membership interest in GP, and
(b) other good and valuable consideration, the sufficiency of which is hereby
acknowledged, and GP hereby accepts the MEA Interest as a contribution to the
capital of GP.
Section 2.3 CONTRIBUTION OF THE MEA INTEREST BY GP TO MLP. GP hereby
grants, contributes, bargains, sells, conveys, assigns, transfers, sets over and
delivers to MLP, its successors and assigns, for its and their own use forever,
all right, title and interest of GP in and to the MEA Interest in exchange for
(a) a continuation of its 2% general partner interest in MLP, (b) the issuance
of the IDRs, (c) 1,792,000 Sub Units representing a 35.1% interest in MLP, (d)
the right to receive $20,100,000 from MLP sourced from the OLP Debt, (e) the
right to receive $16,100,000 in reimbursement of capital expenditures, and (f)
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, and MLP hereby accepts the MEA Interest as a contribution to the
capital of MLP.
Section 2.4 CONTRIBUTION OF THE BASIN INTEREST AND WEST SHORE INTEREST BY
MICHIGAN TO MLP. Michigan hereby grants, contributes, bargains, sells, conveys,
assigns, transfers, sets over and delivers to MLP, its successors and assigns,
for its and their own use forever, all right, title and interest of Michigan in
and to the Basin Interest and West Shore Interest in exchange for (a) 1,208,000
Sub Units representing a 23.7% interest in MLP, (b) the assumption by MLP of the
Michigan Debt, (c) the assumption by MLP of the Michigan Liabilities as set
forth in Section 4.2 hereof, (d) the right to receive $400,000 in reimbursement
of capital expenditures, and (e) other good and valuable consideration, the
sufficiency of which is hereby acknowledged, and MLP hereby accepts the Basin
Interest and West Shore Interest as a contribution to the capital of MLP.
Section 2.5 PUBLIC CASH CONTRIBUTION. The parties to this Agreement
acknowledge a cash contribution by the public through the Underwriters to MLP of
$40,000,000 ($37,200,000 net to MLP after the underwriters' spread of
$2,800,000) in exchange for 2,000,000 Common Units, representing a 39.2%
interest in MLP.
Section 2.6 PAYMENT OF TRANSACTION COSTS; RETIREMENT OF MICHIGAN DEBT. The
parties to this Agreement acknowledge (a) payment by MLP, in connection with the
Acquisition, of transaction expenses in the amount of $3,200,000, (b) retirement
by MLP of the Michigan Debt, and (c) reimbursement by MLP to GP of $9,900,000
for capital expenditures.
Section 2.7 CONTRIBUTION OF CASH BY MLP TO BASIN. MLP hereby contributes to
Basin, its successors and assigns, for its and their own use forever, $4,300,000
in exchange for (a) a continuation of MLP's membership interest in Basin and (b)
other good and valuable
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consideration, the sufficiency of which are hereby acknowledged, and Basin
hereby accepts such sum as a contribution to the capital of Basin, which shall
be used to retire the debt of Basin.
Section 2.8 CONTRIBUTION OF CASH AND THE MEA INTEREST, BASIN INTEREST AND
WEST SHORE INTEREST BY MLP TO OLP. The MLP hereby grants, contributes, bargains,
sells, conveys, assigns, transfers, sets over and delivers to OLP, its
successors and assigns, for its and their own use forever, all of its remaining
cash and all right, title and interest of MLP in and to the MEA Interest, Basin
Interest and West Shore Interest in exchange for (a) a continuation of its 100%
membership interest in OLP, and (b) other good and valuable consideration, the
sufficiency of which is hereby acknowledged, and OLP hereby accepts the cash and
the MEA Interest, Basin Interest and West Shore Interest as a contribution to
the capital of OLP.
Section 2.9 DISTRIBUTION BY WEST SHORE OF INTERESTS IN BASIN TO OLP. West
Shore hereby grants, contributes, bargains, sells, convey, assigns, transfers,
sets over and delivers to OLP, its successors and assigns, for its and their own
use forever, all if West Shore's membership interests in Basin, and OLP hereby
accepts the membership interests in Basin.
Section 2.10 BORROWING OF THE OLP DEBT. The parties to this Agreement
acknowledge that OLP is borrowing the OLP Debt concurrently herewith.
Section 2.11 DISTRIBUTION OF CASH BY OLP TO MLP. OLP hereby distributes to
MLP, its successors and assigns, for its and their own use forever, a portion of
the proceeds from the OLP Debt, equal to $26,700,000, and MLP accepts such funds
as a distribution.
Section 2.12 DISTRIBUTION OF CASH BY MLP TO GP. MLP hereby distributes to
GP, its successors and assigns, for its and their use forever, a portion of the
funds received from OLP, equal to $26,300,000, and GP accepts such proceeds as a
distribution and in reimbursement of $6,200,000 of capital expenditures.
Section 2.13 DISTRIBUTION OF CASH BY MLP TO MICHIGAN. MLP hereby
distributes to Michigan, its successors and assigns, for its and their use
forever, a portion of the funds received from OLP equal to $400,000 and Michigan
accepts such funds in reimbursement of $400,000 of capital expenditures.
Section 2.14 DISTRIBUTION OF GP'S SUB UNITS AND CASH TO MARKWEST. GP hereby
distributes to MarkWest, its successors and assigns, for its and their use
forever, GP's Sub Units and a portion of the funds received from MLP equal to
$36,200,000, and MarkWest accepts such Sub Units and proceeds as a distribution.
Section 2.15 SALE OF SUB UNITS BY MARKWEST TO THE MANAGEMENT GROUP. The
parties to this Agreement acknowledge the 24,864 Sub Units to the Management
Group for $397,824.
Section 2.16 SALE OF INTEREST IN GP BY MARKWEST TO THE MANAGEMENT GROUP.
The parties to this Agreement acknowledge the sale by MarkWest of an
8.6%membership interest in GP to the Management Group for $175,000.
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ARTICLE 3
ADDITIONAL TRANSACTIONS
Section 3.1 PURCHASE OF ADDITIONAL COMMON UNITS. IF THE OPTION IS EXERCISED
IN WHOLE OR IN PART, THE PUBLIC, THROUGH THE UNDERWRITERS, WILL CONTRIBUTE
ADDITIONAL CASH TO MLP IN EXCHANGE FOR UP TO AN ADDITIONAL 300,000 COMMON UNITS,
AND THE NET PROCEEDS THEREOF WILL BE USED TO RETIRE A PORTION OF THE OLP DEBT AS
A PARTIAL REIMBURSEMENT FOR CAPITAL EXPENDITURES INCURRED BY MARKWEST.
ARTICLE 4
ASSUMPTION OF CERTAIN LIABILITIES
Section 4.1 ASSUMPTION OF THE MARKWEST LIABILITIES BY MEA. In connection
with MarkWest's contribution and transfer of the Assets to MEA, MEA hereby
assumes and agrees to duly and timely pay, perform and discharge the MarkWest
Liabilities, to the full extent that MarkWest has been heretofore or would have
been in the future, were it not for the execution and delivery of this
Agreement, obligated to pay, perform and discharge the MarkWest Liabilities;
provided, however, that said assumption and agreement to duly and timely pay,
perform and discharge the MarkWest Liabilities shall not increase the obligation
of MEA with respect to the MarkWest Liabilities beyond that of MarkWest, waive
any valid defense that was available to MarkWest with respect to the MarkWest
Liabilities or enlarge any rights or remedies of any third party, if any, under
any of the MarkWest Liabilities. This assumption shall inure to the benefit of
MarkWest, its shareholders, officers, directors, employees and agents.
Section 4.2 ASSUMPTION OF THE MICHIGAN LIABILITIES BY MLP. In connection
with Michigan's contribution and transfer of the Basin Interest and West Shore
Interest to MLP, MLP hereby assumes and agrees to duly and timely pay, perform
and discharge the Michigan Liabilities, to the full extent that Michigan has
been heretofore or would have been in the future, were it not for the execution
and delivery of this Agreement, obligated to pay, perform and discharge the
Michigan Liabilities; provided, however, that said assumption and agreement to
duly and timely pay and discharge the Michigan Liabilities shall not increase
the obligation of MLP with respect to the Michigan Liabilities beyond that of
Michigan, waive any valid defense that was available to Michigan with respect to
the Michigan Liabilities or enlarge any rights or remedies of any third party,
if any, under any of the Michigan Liabilities. This assumption shall inure to
the benefit of Michigan, its members and each of their predecessors-in-interest
and each of their shareholders, officers, directors, employees and agents.
ARTICLE 5
INDEMNIFICATION
Section 5.1 INDEMNIFICATION WITH RESPECT TO EXCLUDED LIABILITIES. MarkWest
shall indemnify, defend and hold harmless GP, OLP, MLP and their respective
successors and assigns from and against all Claims arising from or relating to
the Excluded Liabilities; provided, however, MarkWest's indemnity obligation
shall only apply with respect to Claims as to which it received written notice
from GP, OLP or MLP within one year following the date hereof.
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Section 5.2 INDEMNIFICATION BY OLP WITH RESPECT TO OPERATION OF THE
BUSINESS AND THE ASSUMED LIABILITIES. The OLP shall indemnify, defend and hold
harmless MarkWest, Michigan, GP and MLP and their respective successors and
assigns from and against any and all Claims (including, without limitation,
costs of environmental investigation and remediation and penalties and other
assessments) arising from or relating to the Assumed Liabilities, or the
operation of the Assets or the Business, excluding any claims, demands, costs,
liabilities and expenses arising from or relating to the Excluded Liabilities
for which written notice was provided to MarkWest within one year following the
date hereof, provided, however, that notwithstanding the foregoing, OLP shall
not be required to indemnify, defend and hold harmless MarkWest and its
successors and assigns to the extent that any of the foregoing claims, demands,
costs, liabilities and expenses are recovered through insurance proceeds paid to
MarkWest.
Section 5.3 INDEMNIFICATION BY MLP WITH RESPECT TO OPERATION OF THE
BUSINESS AND THE ASSUMED LIABILITIES. The MLP shall indemnify, defend and hold
harmless MarkWest, Michigan and GP and their respective successors and assigns
from and against any and all Claims (including, without limitation, costs of
environmental investigation and remediation and penalties and other assessments)
arising from or relating to the Assumed Liabilities, or the operation of the
Assets or the Business, excluding any claims, demands, costs, liabilities and
expenses arising from or relating to the Excluded Liabilities for which written
notice was provided to MarkWest within one year following the date hereof,
provided, however, that notwithstanding the foregoing, MLP shall not be required
to indemnify, defend and hold harmless MarkWest and its successors and assigns
to the extent that any of the foregoing claims, demands, costs, liabilities and
expenses are recovered through insurance proceeds paid to MarkWest.
Section 5.4 INDEMNIFICATION BY GP WITH RESPECT TO OPERATION OF THE BUSINESS
AND THE ASSUMED LIABILITIES. The GP shall indemnify, defend and hold harmless
MarkWest and its respective successors and assigns from and against any and all
Claims (including, without limitation, costs of environmental investigation and
remediation and penalties and other assessments) arising from or relating to the
Assumed Liabilities, or the operation of the Assets or the Business, excluding
any claims, demands, costs, liabilities and expenses arising from or relating to
the Excluded Liabilities for which written notice was provided to MarkWest
within one year following the date hereof, provided, however, that
notwithstanding the foregoing, GP shall not be required to indemnify, defend and
hold harmless MarkWest and its successors and assigns to the extent that any of
the foregoing claims, demands, costs, liabilities and expenses are recovered
through insurance proceeds paid to MarkWest.
Section 5.5 COVERED ENVIRONMENTAL LOSSES. Nothing herein is intended to
affect or apply to Covered Environmental Losses, as such are defined in the
Omnibus Agreement, and which shall be governed by the Omnibus Agreement.
ARTICLE 6
TITLE MATTERS
Section 6.1 ENCUMBRANCES. The contribution of the Assets made under Section
2.1 is made expressly subject to all recorded and unrecorded liens,
encumbrances, agreements, defects,
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restrictions, adverse claims and all laws, rules, regulations, ordinances,
judgments and orders of governmental authorities or tribunals having or
asserting jurisdiction over the Assets or the Business and operations conducted
thereon or therewith, in each case to the extent the same are valid, enforceable
and affect the Assets, including, without limitation, all matters that a current
survey or visual inspection of the Assets would reflect.
Section 6.2 DISCLAIMER OF WARRANTIES; SUBROGATION; WAIVER OF BULK SALES
LAWS.
(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, MARKWEST AND MEA ACKNOWLEDGE AND AGREE MARKWEST HAS NOT MADE, DOES
NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN,
PAST OR PRESENT (ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY MARKWEST REGARDING
(1) THE TITLE, VALUE, NATURE, QUALITY OR CONDITION OF THE ASSETS, INCLUDING,
WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE
ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR
OTHER MATTERS ON THE ASSETS, (2) THE INCOME TO BE DERIVED FROM THE ASSETS, (3)
THE SUITABILITY OF THE ASSETS FOR ANY AND ALL ACTIVITIES AND USES WHICH MEA MAY
CONDUCT THEREON, (4) THE COMPLIANCE OF OR BY THE ASSETS OR THEIR OPERATIONS
WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL
PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR
REQUIREMENTS), OR (5) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS. MARKWEST AND
MEA ACKNOWLEDGE AND AGREE MEA HAS HAD THE OPPORTUNITY TO INSPECT THE ASSETS AND
MEA IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE ASSETS, AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY MARKWEST AND MARKWEST IS NOT LIABLE OR
BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE ASSETS FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT
OR THIRD PARTY. MARKWEST AND MEA EACH ACKNOWLEDGE THAT TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE CONTRIBUTION OF THE ASSETS AS PROVIDED FOR HEREIN IS MADE
ON AN "AS IS", "WHERE IS" BASIS WITH ALL FAULTS AND THE ASSETS ARE CONTRIBUTED
OR DISTRIBUTED AND CONVEYED BY MARKWEST AND ACCEPTED BY MEA SUBJECT TO THE
FOREGOING. THIS PARAGRAPH SHALL SURVIVE SUCH CONTRIBUTION OR DISTRIBUTION AND
CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION
6.2(a) HAVE BEEN NEGOTIATED BY MARKWEST AND MEA AFTER DUE CONSIDERATION AND ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR
WARRANTIES OF MARKWEST, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO
THE ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR
OTHERWISE.
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(b) The contribution of the Assets made under Section 2.1 is made with
full rights of substitution and subrogation of MEA, and all persons claiming by,
through and under MEA, to the extent assignable, in and to all covenants and
warranties by the predecessors-in-title of MarkWest, and with full subrogation
of all rights accruing under applicable statutes of limitation and all rights of
action of warranty against all former owners of the Assets.
(c) MarkWest and MEA agree that the disclaimers contained in this
Section 6.2 are conspicuous disclaimers. Any covenants implied by statute or law
by the use of the words grant, convey, bargain, sell, assign, transfer, deliver
or set over, or any of them or any other words used in this Agreement, are
hereby expressly disclaimed, waived and negated.
(d) Each of the parties hereto hereby waives compliance with any
applicable bulk sales law or any similar law in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement.
ARTICLE 7
FURTHER ASSURANCES
Section 7.1 MARKWEST ASSURANCES. From time to time after the Effective
Time, and without any further consideration, MarkWest shall execute, acknowledge
and deliver all such additional deeds, assignments, conveyances, instruments,
notices, releases, acquittances and other documents, and will do all such other
acts and things, including any required conveyance of certificated titles or
other official registration documentation, all in accordance with applicable
law, as may be necessary or appropriate (a) to more fully assign to MEA, and
each of its successors and assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges by this Agreement granted to
MEA or intended so to be, and (b) to more fully and effectively carry out the
purposes and intent of this Agreement. Additionally, from time to time after the
Effective Time, and without any further consideration, MarkWest will do all acts
necessary or appropriate to assign to MEA any rights to indemnification
associated with the Assets, to the extent assignable, or if not assignable, do
all acts necessary or appropriate to assign to MEA the benefits of any such
rights, including, without limitation, filing claims for indemnification and
pursuing such claims in good faith and with diligence until completion.
Section 7.2 OTHER ASSURANCES. From time to time after the Effective Time,
and without any further consideration, MarkWest, GP, Michigan and MLP shall
execute, acknowledge and deliver all such additional instruments, notices and
other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate to more fully and
effectively carry out the purposes and intent of this Agreement.
ARTICLE 8
EFFECTIVE TIME
Notwithstanding anything contained in this Agreement to the contrary, none
of the provisions of Article 2, Article 3, Article 4 or Article 5 of this
Agreement shall be operative or have any effect until the Effective Time, at
which time all the provisions of Article 2, Article 3, Article 4 and Article 5
of this Agreement shall be effective and operative as of the Effective Time,
without further action by any party hereto.
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ARTICLE 9
MISCELLANEOUS
Section 9.1 ORDER OF COMPLETION OF TRANSACTIONS. The transactions provided
for in Article 2 and Article 3 of this Agreement shall be completed immediately
following the Effective Time in the following order: first, the transactions
provided for in Article 2 shall be completed; and second, following the
completion of the transactions as provided in Article 2, the transactions, if
they occur, provided for in Article 3 shall be completed.
Section 9.2 CONSENTS; RESTRICTION ON ASSIGNMENT. If there are prohibitions
against or conditions to the conveyance of one or more portions of the Assets
without the prior written consent of third parties, including, without
limitation, governmental agencies (other than consents of a ministerial nature
which are normally granted in the ordinary course of business), which if not
satisfied would result in a breach of such prohibitions or conditions or would
give an outside party the right to terminate MEA's rights with respect to such
portion of the Assets (a "RESTRICTION"), then any provision contained in this
Agreement to the contrary notwithstanding, the transfer of title to or interest
in each such portion of the Assets (the "RESTRICTION-ASSET") pursuant to this
Agreement shall not become effective unless and until such Restriction is
satisfied, waived or no longer applies. When and if such a Restriction is so
satisfied, waived or no longer applies, to the extent permitted by applicable
law and any applicable contractual provisions, the assignment of the
Restriction-Asset subject thereto shall become effective automatically as of the
date of this Agreement, without further action on the part of MEA or MarkWest.
MarkWest and OLP agree to use their best efforts to obtain satisfaction of any
Restriction on a timely basis. The description of any portion of the Assets as a
Restriction-Asset shall not be construed as an admission that any Restriction
exists with respect to the transfer of such portion of the Assets. In the event
that any Restriction-Asset exists, MarkWest agrees to hold such
Restriction-Asset in trust for the exclusive benefit of MEA and to otherwise use
its best efforts to provide OLP with the benefits thereof, and MarkWest will
enter into other agreements, or take such other action as it deems necessary, in
order to help ensure that OLP has all of the Assets and concomitant rights
necessary to operate the Business.
Section 9.3 COSTS. The OLP shall pay all expenses, fees and costs,
including but not limited to, all sales, use and similar taxes, arising out of
the contributions, conveyances and deliveries to be made hereunder and shall pay
all documentary, filing, recording, transfer, deed, and conveyance taxes and
fees required in connection therewith. In addition, the OLP shall be responsible
for all costs, liabilities and expenses (including court costs and reasonable
attorneys' fees) incurred in connection with the implementation of any
conveyance or delivery pursuant to Section 7.1 or Section 7.2 or the
satisfaction or waiver of any Restriction pursuant to Section 9.2.
Section 9.4 HEADINGS; REFERENCES; INTERPRETATION. All Article and Section
headings in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any of the provisions hereof.
The words "hereof," "herein" and "hereunder" and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole, including,
without limitation, all Schedules and Exhibits attached hereto, and not to any
particular provision of this Agreement. All references herein to Articles,
Sections, Schedules and Exhibits shall, unless the context requires a different
construction, be deemed to
13
be references to the Articles and Sections of this Agreement and the Schedules
and Exhibits attached hereto, and all such Schedules and Exhibits attached
hereto are hereby incorporated herein and made a part hereof for all purposes.
All personal pronouns used in this Agreement, whether used in the masculine,
feminine or neuter gender, shall include all other genders, and the singular
shall include the plural and vice versa. The use herein of the word including
following any general statement, term or matter shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as without limitation, but not limited to, or words
of similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that could reasonably fall within the
broadest possible scope of such general statement, term or matter.
Section 9.5 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and
inure to the benefit of the parties signatory hereto and their respective
successors and assigns.
Section 9.6 NO THIRD PARTY RIGHTS. The provisions of this Agreement are
intended to bind the parties signatory hereto as to each other and are not
intended to and do not create rights in any other person or confer upon any
other person any benefits, rights or remedies and no person is or is intended to
be a third party beneficiary of any of the provisions of this Agreement.
Section 9.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
Section 9.8 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the state of Colorado applicable to
contracts made and to be performed wholly within such state without giving
effect to conflict of law principles thereof, except to the extent that it is
mandatory that the law of a jurisdiction wherein an Asset is located shall
apply.
Section 9.9 SEVERABILITY. If any of the provisions of this Agreement are
held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.
Section 9.10 DEED; XXXX OF SALE; ASSIGNMENT. To the extent required by
applicable law, this Agreement shall, as of the Effective Time, also constitute
a deed, xxxx of sale or assignment of the Assets.
Section 9.11 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto. Each such instrument shall be reduced to writing and shall be designated
on its face as an Amendment to this Agreement.
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Section 9.12 INTEGRATION. This Agreement supersedes all previous
understandings or agreements between the parties, whether oral or written, with
respect to its subject matter. This document is an integrated agreement which
contains the entire understanding of the parties. No understanding,
representation, promise or agreement, whether oral or written, is intended to be
or shall be included in or form part of this Agreement unless it is contained in
a written amendment hereto executed by the parties hereto after the date of this
Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
15
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
MARKWEST ENERGY OPERATING MARKWEST ENERGY APPALACHIA, L.L.C.
COMPANY, L.L.C.
By: MarkWest Energy Partners, L.P., By: MarkWest Hydrocarbon, Inc., its
its sole member sole member
By: MarkWest Energy GP, L.L.C.,
its General Partner
By: By:
------------------------ ---------------------------
Name: Name:
---------------------- -------------------------
Title: Title:
--------------------- ------------------------
MARKWEST MICHIGAN, INC. MARKWEST ENERGY PARTNERS, L.P.
By: MarkWest Energy GP, L.L.C., its
General Partner
By: By:
------------------------------- ---------------------------
Name: Name:
----------------------------- -------------------------
Title: Title:
----------------------------- ------------------------
MARKWEST HYDROCARBON, INC. MARKWEST ENERGY GP, L.L.C.
By: MarkWest Hydrocarbon, Inc., its
sole member
By: By:
------------------------------- ---------------------------
Name: Name:
----------------------------- -------------------------
Title: Title:
----------------------------- ------------------------
WEST SHORE PROCESSING COMPANY, L.L.C.
By: MarkWest Michigan, Inc., its Manager
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
16
EXHIBIT A
Assets
A-1
EXHIBIT B-1
[Deeds]
B-1
EXHIBIT B-2
[Bills of Sale]
B-2
EXHIBIT C
Management Group
NAME & ADDRESS
XXXX X. XXX
[Address]
[Phone & Fax]
XXXXXX X. XXXXXX
[Address]
[Phone & Fax]
XXXXXX XXXXXXXX
[Address]
[Phone & Fax]
XXXXX X. XXXXXXXXX
[Address]
[Phone & Fax]
XXXX X. XXXXXXXXXX
[Address]
[Phone & Fax]
XXXXXXXXX X. XXXXXXX
[Address]
[Phone & Fax]
XXXXX X. XXXXXX
[Address]
[Phone & Fax]
C-1
