AMENDED AND RESTATED
CLASS B MEMBERSHIP INTEREST
CONTRIBUTION AGREEMENT
dated as of
October 26, 2007
by and among
MARKWEST ENERGY PARTNERS, L.P.,
and
THE SELLERS NAMED HEREIN
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.1
Definitions
2
Section 1.2
Rules of Construction
5
ARTICLE II
CONTRIBUTION OF CLASS B INTERESTS; CLOSING
Section 2.1
Contribution of Class B Interests
5
Section 2.2
Closing
5
Section 2.3
Sellers92 Closing Deliveries
6
Section 2.4
Buyer92s Closing Deliveries
6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1
Representations of the Sellers
7
Section 3.2
Representations of Buyer
6
ARTICLE IV
ADDITIONAL AGREEMENTS, COVENANTS, RIGHTS AND OBLIGATIONS
Section 4.1
Commercially Reasonable Best Efforts; Further Assurances
12
Section 4.2
Registration Rights Agreement
12
Section 4.3
No Solicitation
12
Section 4.4
Expenses
12
Section 4.5
Public Announcements
13
Section 4.6
Reimbursement for Certain Contributions to the Company
13
Section 4.7
Seller Capacity
13
Section 4.8
Distributions
13
Section 4.9
Legends
13
ARTICLE V
CLOSING CONDITIONS
Section 5.1
Mutual Conditions
14
Section 5.2
Buyer92s Conditions
14
Section 5.3
Sellers92 Conditions
15
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ARTICLE VI
TERMINATION
Section 6.1
Termination
15
Section 6.2
Effect of Termination
16
ARTICLE VII
INDEMNIFICATION
Section 7.1
Seller92s Indemnity
16
Section 7.2
Survival
16
Section 7.3
Enforcement of this Agreement
17
Section 7.4
No Waiver Relating to Claims for Fraud or Willful Misconduct
17
ARTICLE VIII
MISCELLANEOUS
Section 8.1
Notices
17
Section 8.2
Waiver and Amendment; Entire Agreement
18
Section 8.3
Binding Effect and Assignment
19
Section 8.4
Severability
19
Section 8.5
Headings
19
Section 8.6
Governing Law; Jurisdiction
19
Section 8.7
Waiver of Jury Trial
20
Section 8.8
Negotiated Agreement
20
Section 8.9
Counterparts
20
Section 8.10
No Act or Failure to Act
20
EXHIBITS
Exhibit A
97
Form of Assignment for Class B Membership Interest
Exhibit B
97
Form of Seller92s Closing Certificate
Exhibit C
97
Form of FIRPTA Certificate
Exhibit D
97
Form of Buyer92s Closing Certificate
Exhibit E
97
Form of Registration Rights Agreement
ii
AMENDED AND RESTATED
CLASS B MEMBERSHIP INTEREST
CONTRIBUTION AGREEMENT
THIS AMENDED AND RESTATED CLASS B MEMBERSHIP INTEREST CONTRIBUTION AGREEMENT, dated as of October 26, 2007 (this " Agreement "), is entered into by and
among each of the Sellers listed in Schedule 2.1 attached hereto (each referred to herein as a " Seller " and collectively, the " Sellers "),
and MarkWest Energy Partners, L.P., a Delaware limited partnership (" Buyer "). The Sellers and the Buyer are collectively referred to herein as the " Parties
," with each a " Party ."
WITNESSETH:
WHEREAS, Buyer previously entered into the Class B Membership Interest Contribution Agreement, dated September 5, 2007 (the " Original Agreement "), with
the holders of Class B Membership Interests named therein (the " Original Sellers ");
WHEREAS, pursuant to Section 8.2 of the Original Agreement, Denney & Denney Capital, LLLP, a Colorado limited liability limited partnership ("DDC"), has requested that the Original Agreement be amended to include DDC as a party;
WHEREAS, pursuant to Section 8.2 of the Original Agreement, the Buyer and the Original Sellers agree to amend, restate and replace the Original Agreement in its entirety to include DDC as a party to this Agreement and the transactions contemplated
herein;
WHEREAS, the Sellers collectively own all of the outstanding Class B Membership Interests (as defined below) in the Company, representing, in the aggregate, a 10.3% Membership Interest (as defined below) in MarkWest Energy GP, L.L.C.,
a Delaware limited liability company (the " Company "), with each Seller owning the Class B Membership Interest specified on Schedule 2.1 attached hereto, and MarkWest
Hydrocarbon, Inc., a Delaware corporation (" Hydrocarbon "), owns all of the outstanding Class A Membership Interests (as defined below) representing a 89.7% Membership Interest in the Company;
WHEREAS, subject to the terms and conditions set forth herein, each of the Sellers desires to contribute to Buyer, and Buyer desires for the Sellers to contribute to it, their respective Class B Membership Interests in exchange for
cash and common units representing limited partnership interests in the Buyer (" Common Units ");
WHEREAS, as a material inducement to the Sellers entering into this Agreement, the Buyer has agreed to enter into a Registration Rights Agreement on the Closing Date and grant the Sellers certain registration rights as provided therein;
WHEREAS, as of the date hereof, pursuant to the requirements of Section 12.1 of the Company LLC Agreement (as defined below), in its capacity as the Class A Member of the Company, Hydrocarbon has consented to the transactions contemplated
by this Agreement; and
WHEREAS, on September 5, 2007, the Buyer, Hydrocarbon and MWEP, L.L.C. (" MergerCo ") have entered into
an Agreement and Plan of Redemption and Merger (the " Merger Agreement "), pursuant to which (i) Hydrocarbon will redeem a portion of its outstanding shares of common stock (the "
Redemption ") and then (ii) MergerCo will merge (the " Merger ") with and into Hydrocarbon, with Hydrocarbon surviving, such that following the Redemption and Merger, Hydrocarbon will be
a direct, wholly owned subsidiary of the Buyer.
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follow:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. In this Agreement, unless the context otherwise requires, the following terms shall have the following meanings respectively:
" Affiliate ," when used with respect to a Person, means any other Person that directly or indirectly controls, is controlled by or is under common control with such first Person.
" Aggregate Consideration Value ," with respect to a Seller, means the sum of (i) the cash received by such Seller pursuant to this Agreement plus (ii) the product of (A) the number of Common
Units received by such Seller pursuant to this Agreement multiplied by (B) the Common Unit Price.
" Agreement " has the meaning set forth in the Preamble.
" Business Day " means any day on which commercial banks are generally open for business in Denver, Colorado other than a Saturday, a Sunday or a day observed as a holiday in Denver, Colorado
under the Laws of the State of Colorado or the federal Laws of the United States of America.
" Buyer " has the meaning set forth in the Preamble.
" Buyer Disclosure Schedule " means the disclosure schedule prepared by Buyer and delivered to Sellers as of the date of this Agreement.
" Buyer Indemnified Parties " has the meaning set forth in Section 7.1 .
" Closing " has the meaning set forth in Section 2.2 .
" Closing Date " has the meaning set forth in Section 2.2 .
" Class A Membership Interests " has the meaning assigned to such term in the Company LLC Agreement.
" Class B Membership Interests " has the meaning assigned to such term in the Company LLC Agreement.
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" Class B Proposal " has the meaning set forth in Section 4.3 .
" Code " means the Internal Revenue Code of 1986, as amended.
" Common Unit Price " means $33.32.
" Common Units " has the meaning set forth in the recitals.
" Company " has the meaning set forth in the recitals.
" Company LLC Agreement " means the Amended and Restated Limited Liability Company Agreement of the Company, dated May 24, 2002, as amended by Amendment No. 1 thereto, dated effective December
31, 2004, and Amendment No. 2 thereto, dated effective January 19, 2005.
" Conflicts Committee " means the Conflicts Committee of the Board of Directors of the Company.
" Current Quarter " has the meaning set forth in Section 4.8(b) .
" control ," and its derivatives, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person.
" Delaware LLC Act " means Delaware Revised Limited Liability Company Act.
" Encumbrances " means pledges, restrictions on transfer, proxies and voting or other agreements, liens, claims, charges, mortgages, security interests or other legal or equitable encumbrances,
limitations or restrictions of any nature whatsoever, other than restrictions on transfer under the Company LLC Agreement, which have been waived, and federal and state securities laws.
" Exchange Act " means the Securities Exchange Act of 1934, as amended.
" FIRPTA " means the Foreign Investment in Real Property Tax Act.
" Fox Support Agreement " means the Voting Agreement, dated the date hereof, among the Buyer and the Stockholders (as defined therein).
" GAAP " means United States generally accepted accounting principles applied on a consistent basis during the periods involved.
" governing documents " means, with respect to any person, the certificate or articles of incorporation, by-laws, articles of organization, limited liability company agreement, partnership
agreement, formation agreement, joint venture agreement, operating agreement, unanimous equityholder agreement or declaration or other similar governing documents of such person.
" Governmental Authority " means any (a) multinational, federal, national, provincial, territorial, state, regional, municipal, local or other government, governmental or public department,
central bank, court, tribunal, arbitral body, commission, administrative agency,
3
board, bureau or agency, domestic or foreign, (b) subdivision, agent, commission, board, or authority of any of the foregoing, or (c) quasi-governmental or private body exercising any regulatory, expropriation or taxing
authority under, or for the account of, any of the foregoing, in each case which has jurisdiction or authority with respect to the applicable party.
" GP Capital Contribution " has the meaning set forth in Section 4.6 .
" Indemnified Parties " has the meaning set forth in Section 7.1 .
" IDRs " means the Incentive Distribution Rights (as such term in defined in the Partnership Agreement).
" Laws " means all statutes, regulations, statutory rules, orders, judgments, decrees and terms and conditions of any grant of approval, permission, authority, permit or license of any court,
Governmental Authority, statutory body or self-regulatory authority (including the NYSE).
" Material Adverse Effect " means, with respect to Buyer, any effect that (i) is material and adverse to the financial position, results of operations, business, assets or prospects of Buyer
and its Subsidiaries taken as a whole or (ii) would materially impair the ability of Buyer to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the transactions contemplated by this
Agreement.
" Membership Interests " has the meaning assigned to such term in the Company LLC Agreement.
" Merger " has the meaning set forth in the recitals.
" Merger Agreement " has the meaning set forth in the recitals.
" NYSE " means the New York Stock Exchange.
" Order " means any judgment, decree, injunction, ruling, award, settlement, stipulation or orders of a Governmental Authority.
" Partnership Agreement " means the Second Amended and Restated Agreement of Limited Partnership of Buyer.
" Person " or " person " means any individual, corporation, limited liability company, limited or general partnership, joint venture, association,
joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity, or any group comprised of two or more of the foregoing.
" Previously Disclosed " by Buyer shall mean information set forth in Buyer Disclosure Schedule.
4
" Representatives " means with respect to a Person, its directors, officers, employees, agents and representatives, including any investment banker, financial advisor,
attorney, accountant or other advisor, agent or representative.
" Rights " shall mean, with respect to any person, securities or obligations convertible into or exchangeable for, or giving any person any right to subscribe for or acquire, or any options,
calls or commitments relating to, equity securities of such person.
" Securities Act " means the Securities Act of 1933, as amended.
" Seller " has the meaning set forth in the Preamble.
" Subsidiary " shall mean an Affiliate of a Person that is controlled by such Person directly, or indirectly through one or more intermediaries.
" Tax " or " Taxes " shall mean any and all taxes, including any interest, penalties or other additions to tax that may become payable in respect
thereof, imposed by any federal, state, local or foreign government or any agency or political subdivision of any such government, which taxes shall include, without limiting the generality of the foregoing, all income or profits taxes, payroll and employee
withholding taxes, unemployment insurance taxes, social security taxes, severance taxes, license charges, taxes on stock, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes,
real and personal property taxes, stamp taxes, environmental taxes, transfer taxes, workers92 compensation and other obligations of the same or of a similar nature to any of the foregoing.
" Unaffiliated Common Unitholders " means holders of Common Units other than Hydrocarbon or holders affiliated with Hydrocarbon or the Company.
Section 1.2 Rules of Construction. In constructing this Agreement: (a) the word "includes" and its derivatives means "includes, without
limitation" and corresponding derivative expressions; (b) the currency amounts referred to herein, unless otherwise specified, are in United States dollars; (c) whenever this Agreement refers to a number of days, such number shall refer to calendar
days unless business days are specified; (d) unless otherwise specified, all references in this Agreement to "Article," "Section," "Schedule," "Disclosure Schedule," "Exhibit," "preamble" or
"recitals" shall be references to an Article, Section, "Schedule," Disclosure Schedule, Exhibit, preamble or recitals hereto; and (e) whenever the context requires, the words used in this Agreement shall include the
masculine, feminine and neuter and singular and the plural.
ARTICLE II
CONTRIBUTION OF CLASS B INTERESTS; CLOSING
Section 2.1 Contribution of Class B Interests. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined below), each Seller agrees, severally and
not jointly, to contribute to the Buyer the Class B Membership Interest specified on Schedule 2.1 attached hereto as owned by such Seller, and the Buyer agrees to accept the contribution of each such Class B Membership Interest from each Seller
and (a) pay to each
5
Seller the amount in cash and (b) issue to each Seller the number of Common Units, in each case, set forth opposite the name of such Seller on Schedule 2.1 attached hereto.
Section 2.2 Closing. The closing of the contribution of the Class B Membership Interests pursuant to this Agreement (the " Closing
") shall take place concurrently with the closing of the Merger, subject to satisfaction or waiver of all of the conditions to each of the respective Parties92 obligations to consummate the contribution of the Class B Membership
Interest hereunder (such date, the " Closing Date "); provided, that the Buyer shall have given the Sellers three (3) Business Days (or such shorter period as shall be agreeable to the Parties) prior written notice
of such designated Closing Date. The Closing shall take place at the offices of Hogan & Hartson LLP, 1200 Seventeenth Street, Suite 1500, Denver, Colorado 80202.
Section 2.3 Sellers92 Closing Deliveries. At the Closing, each of the Sellers shall deliver, or cause to be delivered, to the Buyer the following:
(a) a duly executed Assignment in substantially the form attached hereto as Exhibit A , transferring the Class B Membership Interest of such Seller;
(b) a closing certificate, substantially in the form attached as Exhibit B , duly executed by, or on behalf of, such Seller;
(c) a FIRPTA certificate, in the form attached hereto as Exhibit C duly executed by, or on behalf of, such Seller (i) stating that such Seller is not a foreign individual, foreign corporation, foreign partnership, foreign
trust or foreign estate, (ii) providing such Seller92s U.S. Employer Identification Number and (iii) providing such Seller92s address;
(d) the Registration Rights Agreement, in the form attached hereto as Exhibit E duly executed by, or on behalf of, such Seller; and
(e) such other certificates, instruments of conveyance or contribution and documents as may be reasonably requested by the Buyer prior to the Closing Date to carry out the intent and purposes of this Agreement.
Section 2.4 Buyer92s Closing Deliveries. At the Closing, Buyer shall deliver, or cause to be delivered, to each of the Sellers the following:
(a) the full amount in cash set forth opposite the name of such Seller on Schedule 2.1 by wire transfer of immediately available funds to the respective accounts designated in writing by such Seller
at least two (2) Business Days prior to Closing;
(b) a duly executed certificate, countersigned by the appropriate officer(s) of the Company, representing the number of Common Units set forth opposite the name of such Seller on Schedule 2.1 hereto;
(c) a closing certificate, substantially in the form attached as Exhibit D , duly executed by, or on behalf of, Buyer;
6
(d) the Registration Rights Agreement, in the form attached hereto as Exhibit E duly executed by, or on behalf of, Buyer;
(e) a long-form certificate of good standing of recent date of Buyer; and
(f) such other certificates, instruments of conveyance or contribution and documents as may be reasonably requested by such Seller prior to the Closing Date to carry out the intent and purposes of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations of the Sellers. Each Seller hereby represents and warrants, severally and not jointly, to Buyer that:
(a) Organization; Authorization; Validity of Agreement; Necessary Action . This Agreement has been duly executed and delivered by such Seller and constitutes a legal, valid and binding agreement
of such Seller, enforceable against such Seller in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors92 rights and
to general equitable principles.
(b) Ownership . Such Seller92s Class B Membership Interest is, and on the Closing Date will be, owned beneficially and of record by such Seller and, to the best knowledge of such Seller, has been duly authorized and
is validly issued, fully paid (to the extent required under the Company LLC Agreement) and non-assessable (except as provided under the Delaware LLC Act or the Company LLC Agreement). Such Seller has good and marketable title to such Seller92s Class B
Membership Interest, free and clear of any Encumbrances, including any liens for Taxes. Such Seller has and will have at all times through the Closing Date sole voting power, sole power of disposition and sole power to agree to all of the matters set
forth in this Agreement, in each case with respect to such Seller92s Class B Membership Interest at all times through the Closing Date.
(c) No Violation . Neither the execution and delivery of this Agreement by such Seller, the performance by such Seller of such Seller92s obligations under this Agreement, nor the consummation by such Seller of the transactions
contemplated hereby nor compliance by such Seller with any of the provisions herein will (i) result in the creation of any Encumbrance upon the Class B Membership Interest or (ii) violate any Orders or Laws applicable to such Seller or any of such Seller92s
properties, rights or assets.
(d) Consents and Approvals . No consent, approval, Order or authorization of, or registration, declaration or filing with, any Governmental Authority is necessary to be obtained or made by such Seller in connection with
such Seller92s execution, delivery and performance of this Agreement or the consummation by such Seller of the transactions contemplated by this Agreement.
(e) Absence of Litigation . There is no action, litigation or proceeding pending and no Order of any Governmental Authority outstanding nor, to the knowledge of such Seller, is
7
any such action, litigation, proceeding or Order threatened, against such Seller or such Seller92s Class B Membership Interest which may prevent or materially delay such Seller from performing such Seller92s obligations under
this Agreement or consummating the transactions contemplated hereby on a timely basis.
(f) Brokerage and Finder92s Fee . No fees or commissions will be payable by such Seller to any broker, finder, or investment banker with respect to the disposition or contribution of any of such
Seller92s Class B Membership Interest or the consummation of the transactions contemplated by this Agreement.
(g) No Side Agreements . Except for this Agreement and the agreements contemplated by this Agreement and the Merger Agreement (if and to the extent such Seller is a party to any such agreements), there are no other agreements
by, among or between such Seller or any of such Seller92s Affiliates, on the other hand, and the Company or its Affiliates, on the other hand, with respect to the transactions contemplated hereby.
(h) Community Property . Except for DDC, each Seller is a natural person. Except in the case of Jan Kindrick and Kevin Kubat, each Seller that is a natural person is domiciled and residing in the State of Colorado,
and such Seller92s Class B Membership Interest is not subject to community property rights. Kevin Kubat is domiciled and residing in the State of Oklahoma and such Seller92s Class B Membership Interest is not subject to community property rights.
Jan Kindrick is domiciled and residing in the State of Texas and such Seller92s Class B Membership Interest may be subject to community property rights.
(i) Investment Intent; Investment Experience; Restricted Securities . In acquiring the Common Units hereunder, such Seller is not offering or selling, and shall not offer or sell the Common Units, in connection with
any distribution of any of such Common Units, and such Seller shall not participate in any such undertaking or in any underwriting of such an undertaking, except in compliance with applicable federal and state securities Laws. Such Seller acknowledges
that Seller can bear the economic risk of such Seller92s investment in the Common Units, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Common Units.
Such Seller is an "accredited investor" as such term is defined in Regulation D under the Securities Act. Such Seller understands that none of the Common Units received pursuant to this Agreement shall have been registered pursuant to the Securities
Act or any applicable state securities Laws, that all of such Common Units shall be characterized as " restricted securities" under federal securities Laws and that under such Laws and applicable
regulations none of such Common Units can be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.
(j) Limitation of Representations and Warranties . EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 3.1 , SUCH SELLER IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR
ORAL, STATUTORY, EXPRESS OR IMPLIED.
Section 3.2 Representations of Buyer. Except as set forth in a section of the Buyer Disclosure Schedule delivered concurrently herewith corresponding to the applicable sections of
8
this Section 3.2 to which such disclosure applies, Buyer hereby represents and warrants to each Seller that:
(a) Organization; Qualification . Buyer has the requisite power and authority to execute and deliver this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery by Buyer of this Agreement, its performance of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly and validly authorized by Buyer and no other actions or proceedings
on the part of Buyer to authorize the execution and delivery of this Agreement, the performance by Buyer of the obligations hereunder or the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by
Buyer and constitutes a legal, valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors92 rights and to general equitable principles.
(b) No Violations . Neither the execution and ...
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