Exhibit 10.2
SPECIFIC TERMS IN THIS EXHIBIT
HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS
HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPERATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE
BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS
(**).
Execution
Version
CONTRIBUTION
AGREEMENT
BY AND AMONG
MARKWEST LIBERTY GAS GATHERING,
L.L.C.,
M&R MWE LIBERTY,
LLC,
AND
MARKWEST LIBERTY
MIDSTREAM & RESOURCES, L.L.C.
TABLE OF CONTENTS
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Page
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ARTICLE 1
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DEFINITIONS; INTERPRETATION
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Section 1.1
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Definitions
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2
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Section 1.2
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Headings; References; Interpretation
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2
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ARTICLE 2
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CONTRIBUTIONS, ASSUMED LIABILITIES AND
CLOSING
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Section 2.1
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Contributions and Payments
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2
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Section 2.2
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Assumption of Liabilities
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3
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Section 2.3
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Closing
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3
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Section 2.4
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Closing Deliveries
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3
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ARTICLE 3
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REPRESENTATIONS AND WARRANTIES OF MWE
LIBERTY
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Section 3.1
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Organization; Qualification
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5
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Section 3.2
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Authority; Enforceability
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5
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Section 3.3
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No Violation; Consents and Approvals
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6
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Section 3.4
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Capitalization
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7
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Section 3.5
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Compliance with Law
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7
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Section 3.6
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No Default
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7
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Section 3.7
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Title to Properties and Assets
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8
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Section 3.8
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Rights-of-Way
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8
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Section 3.9
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Financial Statements
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8
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Section 3.10
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Environmental Matters
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8
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Section 3.11
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Material Contracts
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9
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Section 3.12
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Legal Proceedings
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10
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Section 3.13
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Permits
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10
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Section 3.14
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Taxes
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10
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Section 3.15
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Employees
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10
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Section 3.16
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Brokers’ Fee
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11
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Section 3.17
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Insurance
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11
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Section 3.18
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Intellectual Property
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11
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Section 3.19
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Affiliate Transactions
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11
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ARTICLE 4
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REPRESENTATIONS AND WARRANTIES OF
NGPMR
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Section 4.1
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Organization
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Section 4.2
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Authority; Enforceability
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12
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Section 4.3
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No Violation; Consents and Approvals
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12
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Section 4.4
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Brokers’ Fee
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12
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ARTICLE 5
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INDEMNIFICATION
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Section 5.1
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Survival
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Section 5.2
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Indemnification by the Company
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13
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Section 5.3
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Indemnification by MWE Liberty
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14
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Section 5.4
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Indemnification by NGPMR
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14
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Section 5.5
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No Effect on Services Agreement and Company
Operating Agreement
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14
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Section 5.6
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Third Party Claims Procedures
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14
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Section 5.7
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Satisfaction of Claims for
Indemnification
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15
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Section 5.8
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Limits on Indemnification
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Section 5.9
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Extent of Indemnification
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Section 5.10
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No Reliance
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ARTICLE 6
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COVENANTS
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Section 6.1
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HSR Filing
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Section 6.2
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Tax Effect
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Section 6.3
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Tax Matters
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Section 6.4
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Further Assurances
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20
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Section 6.5
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Consents
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20
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Section 6.6
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Expenses
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20
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Section 6.7
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Public Statements
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21
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Section 6.8
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Conduct of Business
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ARTICLE 7
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CONDITIONS PRECEDENT
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Section 7.1
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Conditions to Each Party’s
Obligations
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Section 7.2
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Conditions to NGPMR’s
Obligations
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Section 7.3
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Conditions to MWE Liberty’s
Obligations
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ARTICLE 8
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TERMINATION
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Section 8.1
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Termination
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Section 8.2
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Effect of Termination
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ARTICLE 9
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GENERAL PROVISIONS
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Section 9.1
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Effective Time
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Section 9.2
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Costs; Taxes
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Section 9.3
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Notices
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Section 9.4
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Binding Effect
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Section 9.5
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No Third Party Rights
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Section 9.6
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No Waiver
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Section 9.7
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Applicable Law
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Section 9.8
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Severability
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Section 9.9
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Amendment or Modification
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Section 9.10
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Assignment; Deed; Bill of Sale
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ii
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Section 9.11
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Conspicuousness of Provisions
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Section 9.12
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Counterparts
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Section 9.13
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No Recourse Against Officers or
Directors
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Section 9.14
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Entire Agreement; Supersedure
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EXHIBITS
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Exhibit A
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Defined Terms
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Exhibit B
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Assets
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Exhibit C
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Company Operating Agreement
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Exhibit D
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Services Agreement
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Exhibit E
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Bill of Sale, Assignment and Assumption
Agreement
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SCHEDULES
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Schedule 1.1
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Knowledge Individuals
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Schedule 3.3
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Consents or Approvals
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Schedule 3.4(b)
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Capitalization
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Schedule 3.6
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No Default
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Schedule 3.7(a)
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Title to Properties and Assets
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Schedule 3.7(b)
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Valid Transfer of Properties and
Assets
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Schedule 3.8
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Rights-of-Way
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Schedule 3.9
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Trial Balance
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Schedule 3.10
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Environmental Matters
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Schedule 3.11
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Material Contracts
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Schedule 3.15(a)
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Employees
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Schedule 3.15(b)
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Benefit Plans
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Schedule 3.18
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Intellectual Property
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Schedule 3.19
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Affiliate Transactions
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Schedule 5.3(d)
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Specific Indemnity Items **
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Schedule 5.3(e)
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Specific Indemnity Items **
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Schedule 7.2(c)
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Required Consents
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iii
CONTRIBUTION
AGREEMENT
THIS CONTRIBUTION
AGREEMENT , dated as of
January 22, 2009, is entered into by and among MarkWest
Liberty Gas Gathering, L.L.C., a Delaware limited liability company
(“ MWE Liberty ”), M&R MWE Liberty,
LLC, a Delaware limited liability company (“
NGPMR ”), and MarkWest Liberty
Midstream & Resources, L.L.C., a Delaware limited
liability company (the “ Company
”). The parties to this Agreement are collectively
referred to herein as the “ Parties
.”
RECITALS
WHEREAS, MWE Liberty has formed the
Company, pursuant to the Act, for the purpose of engaging in the
natural gas midstream business, including, but not limited to,
natural gas gathering and processing, and the natural gas liquids
processing, fractionation, transportation, storage and marketing
business within the Area of Mutual Interest and certain other
purposes (the “ Business ”);
WHEREAS, at the Closing MWE Liberty
and NGPMR (the “ Members ”) shall execute
and agree to that certain Amended and Restated Limited Liability
Company Agreement of the Company (the “ Company
Operating Agreement ”) in the form attached hereto as
Exhibit C , which Company Operating Agreement shall
become effective at the Closing;
WHEREAS, at the Closing MWE Liberty,
MarkWest Hydrocarbon, Inc. and the Company shall execute and
agree to that certain Services Agreement (the “
Services Agreement ”) in the form attached
hereto as Exhibit D , which Services Agreement shall
become effective at the Closing;
WHEREAS, subject to the terms and
conditions of this Agreement, NGPMR desires to contribute to the
Company, and the Company desires to accept from NGPMR, certain cash
consideration in exchange for all of the Class A Interests;
and
WHEREAS, subject to the terms and
conditions of this Agreement, MWE Liberty desires to contribute,
convey, assign and transfer to the Company, and the Company desires
to accept from MWE Liberty, all of MWE Liberty’s right, title
and interest in and to the Assets in exchange for all of the
Class B Interests and the assumption of certain liabilities by
the Company.
AGREEMENTS
NOW, THEREFORE, in consideration of
their mutual undertakings and agreements hereunder, the Parties
undertake and agree as follows:
ARTICLE 1
DEFINITIONS;
INTERPRETATION
Section 1.1
Definitions . Capitalized terms used in this
Agreement but not defined in the body hereof shall have the
meanings ascribed to them in Exhibit A .
Section 1.2
Headings; References; Interpretation . In this
Agreement, unless a clear contrary intention appears:
(a) the singular includes the plural and vice versa;
(b) reference to a person includes such Person’s
successors and assigns but, in the case of a Party, only if such
successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person
in any other capacity; (c) reference to any gender includes
each other gender; (d) reference to any agreement (including
this Agreement), document or instrument means such agreement,
document, or instrument as amended or modified and in effect from
time to time in accordance with the terms thereof and, if
applicable, the terms of this Agreement; (e) reference to any
Section or Article means such Section or
Article of this Agreement, and references in any
Section or Article or definition to any clause means such
clause of such Section, Article or definition;
(f) “hereunder,” “hereof,”
“hereto” and words of similar import are references to
this Agreement as a whole and not to any particular provision
hereof; and (g) the word “or” is not exclusive,
and the word “including” (in its various forms) means
including without limitation. Section titles and
headings in this Agreement are inserted for convenience of
reference only and are not intended to be a part of, or to affect
the meaning or interpretation of, this Agreement.
ARTICLE 2
CONTRIBUTIONS, ASSUMED
LIABILITIES AND CLOSING
Section 2.1
Contributions and Payments . Subject to the
terms and conditions of this Agreement, at the Closing, the
following contributions, equity issuances and payments shall be
made:
(a)
NGPMR shall contribute $50,000,000.00 to the Company in immediately
available funds in exchange for all of the Class A
Interests. In its capacity as a holder of such interests,
NGPMR shall have the obligations set forth in the Company Operating
Agreement with respect to a Class A Member to contribute
additional capital to the Company, but shall have no other
obligation to contribute any additional capital to the
Company.
(b)
MWE Liberty shall grant, contribute, bargain, convey, assign,
transfer, set over and deliver to the Company, its successors and
assigns, and for its and their own use forever, all of MWE
Liberty’s right, title and interest in and to the Assets in
exchange for all of the Class B Interests. In its
capacity as a holder of such interests, MWE Liberty shall have the
obligations set forth in the Company Operating Agreement with
respect to a Class B Member to contribute additional capital
to the Company, but shall have no other obligation to contribute
any additional capital to the Company. The term “
Assets ” shall mean (i) all of the assets
owned by MWE Liberty, including the natural gas gathering systems
described in Exhibit B attached hereto, together with
all natural gas gathering and processing and natural gas liquids
processing, fractionation, transportation, storage and marketing
plants and facilities constituting a part thereof or related
thereto, and all easements, rights of way, privileges, franchises,
tracts of land,
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surface leases, other interests in land,
pipelines, equipment, permits, licenses, contract rights and
personal property constituting a part thereof or necessary for the
ownership and operation thereof including the easements, rights of
way, permits and other instruments referenced in
Exhibit B and (ii) all of the assets owned by
Affiliates of MWE Liberty that are related exclusively to the
Business within the Area of Mutual Interest, but in any event,
excluding any and all amounts payable by Range
Resources-Appalachia, LLC pursuant to Section 4.3(d) of
that certain Interim Gas Processing Agreement dated March 5,
2008, between MarkWest Energy Appalachia, L.L.C. and Range
Resources-Appalachia, LLC, for procuring, constructing and
installing the interim plant prior to January 1, 2008 and
representing 115% of all Installation Costs (as defined therein)
incurred in the procurement, construction and installation of the
interim plant (the “ Excluded Assets
”). The Excluded Assets shall be retained by MWE
Liberty and its Affiliates and shall not be considered Assets
hereunder.
(c)
The Company shall pay to MWE Liberty in immediately available funds
the amount of any ** ; provided that any such
** by MWE Liberty after the date hereof shall be consistent
with Section 6.8 .
Section 2.2
Assumption of Liabilities . As part of the
consideration for the contribution of the Assets by MWE Liberty to
the Company, effective as of the Closing, the Company will assume
and agree to duly and timely pay, perform and discharge, pursuant
to the Assignment and Assumption, all of the liabilities and
obligations of any kind whatsoever of MWE Liberty arising from or
relating to the Assets, whether known or unknown, liquidated or
contingent, and regardless of whether the same are deemed to have
arisen, accrued or are attributable to periods prior to, on or
after the Closing Date, including, but not limited to, obligations
and liabilities of MWE Liberty: (a) concerning the use,
ownership, management or operation of the Assets, (b) under or
relating to any contracts, agreements, Permits and instruments
existing as of the Closing Date by which the Assets are bound or
subject or that relate to or are otherwise applicable to the Assets
(other than obligations of MWE Liberty under the Transaction
Documents) and (c) which are Disclosed Liabilities, (all of
the liabilities and obligations described in this
Section 2.2 are collectively referred to as the “
Assumed Liabilities ”); provided,
however , that the Company does not assume (and Assumed
Liabilities shall not include) any costs or expenses included
within the amount of MWE Liberty’s initial capital
contribution to the Company.
Section 2.3
Closing . Subject to the terms and conditions
of this Agreement, the closing of the transactions contemplated by
this Agreement (the “ Closing ”) shall
take place at the offices of Vinson & Elkins LLP, First
City Tower, 1001 Fannin Street, Suite 2500, Houston,
Texas 77002 on the second Business Day after all of the conditions
precedent set forth in Article 7 have been satisfied,
or if permissible, waived, or at such other place, time and date as
is agreed to in writing by the Parties (the “ Closing
Date ”). The Closing will be deemed effective
as of 11:59 p.m., Houston, Texas time on the Closing
Date.
Section 2.4
Closing Deliveries .
(a)
NGPMR Deliveries . At the Closing, NGPMR will execute
and deliver, or cause to be executed and delivered, to the other
Parties, as applicable, each of the following
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documents, where the execution or delivery of
documents is contemplated, and will take or cause to be taken the
following actions, where the taking of action is
contemplated:
(i)
a certificate of the Secretary of State of the State of Delaware,
dated not more than five days prior to the Closing Date, as to the
existence and good standing of NGPMR;
(ii)
a certificate of an officer of NGPMR providing the following
documents and certifying that each is a true and correct
copy: (A) the Organizational Documents of NGPMR and
(B) resolutions of NGPMR’s governing body authorizing
the transactions contemplated hereby (including designation of the
Persons authorized to execute this Agreement on behalf of NGPMR and
the Transaction Documents to which it is a party);
(iii)
a duly executed counterpart of the Company Operating Agreement;
and
(iv)
a certificate of an officer of NGPMR, dated as of the Closing Date,
certifying that all of the conditions set forth in
Sections 7.1(a) and 7.3(a) have been
satisfied.
(b)
MWE Liberty Deliveries . At the Closing, MWE Liberty
will execute and deliver, or cause to be executed and delivered, to
the other Parties, as applicable, each of the following documents,
where the execution or delivery of documents is contemplated, and
will take or cause to be taken the following actions, where the
taking of action is contemplated:
(i)
a certificate of the Secretary of State of the State of Delaware,
dated not more than five days prior to the Closing Date, as to the
existence and good standing of MWE Liberty;
(ii)
a certificate of an officer of MWE Liberty providing the following
documents and certifying that each is a true and correct
copy: (A) the Organizational Documents of MWE Liberty
and (B) resolutions of MWE Liberty’s governing body
authorizing the transactions contemplated hereby (including
designation of the Persons authorized to execute this Agreement on
behalf of MWE Liberty and the Transaction Documents to which it is
a party);
(iii)
a duly executed counterpart of the Company Operating
Agreement;
(iv)
a duly executed counterpart of the Services Agreement;
(v)
counterparts of the Bill of Sale, Assignment and Assumption
Agreement, in substantially the form attached as
Exhibit E hereto (the “ Assignment and
Assumption ”); and
(vi)
a certificate of an officer of MWE Liberty, dated as of the Closing
Date, certifying that all of the conditions specified in
Section 7.1(e) and Section 7.2(a)
have been satisfied.
4
(c)
Company Deliveries . At the Closing, MWE Liberty will
cause the Company to execute and deliver:
(i)
a certificate of the Secretary of State of the State of Delaware,
dated not more than five days prior to the Closing Date, as to the
existence and good standing of the Company;
(ii)
a copy of the Certificate of Formation of the Company certified by
the Secretary of State of the State of Delaware;
(iii)
a duly executed counterpart of the Assignment and Assumption;
and
(iv)
a duly executed counterpart of the Services Agreement;
The transactions described above,
together with the issuance and sale of the Class A Interests
and the Class B Interests pursuant to this Agreement and the
entry into the Company Operating Agreement, are referred to herein
as the “ Transactions .” The
“ Transaction Documents ” shall mean this
Agreement, the Company Operating Agreement, and the Services
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF MWE LIBERTY
MWE Liberty hereby makes the
following representations and warranties to the Company and
NGPMR:
Section 3.1
Organization; Qualification . Each of MWE
Liberty and the Company is a limited liability company duly formed,
validly existing and in good standing under the laws of the State
of Delaware and has all requisite limited liability company power
and authority to own, lease and operate its properties and to carry
on its business, and is duly qualified, registered or licensed to
do business as a foreign limited liability company and is in good
standing in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be
so duly qualified, registered or licensed and in good standing
would not have or be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect.
Section 3.2
Authority; Enforceability .
(a)
Each of MWE Liberty and the Company has the requisite limited
liability company power and authority to execute and deliver the
Transaction Documents to which it is a party, and to consummate the
Transactions. The execution and delivery by MWE Liberty and
the Company of the Transaction Documents to which either of them is
a party, and the consummation by MWE Liberty and the Company of the
Transactions, have been duly and validly authorized by MWE Liberty
and/or the Company, as applicable, and no other limited liability
company proceedings on the part of MWE Liberty or the Company are
necessary to authorize the Transaction Documents or to consummate
the Transactions.
5
(b)
Each of the Transaction Documents to which MWE Liberty or the
Company is a party has been (or will be, in the case of Transaction
Documents to be delivered at the Closing) duly executed and
delivered by MWE Liberty and/or the Company, as applicable, and,
assuming the due authorization, execution and delivery by the other
parties thereto, each Transaction Document constitutes (or will
constitute, in the case of Transaction Documents to be delivered at
the Closing) the valid and binding agreement of MWE Liberty and the
Company, and is enforceable against MWE Liberty and/or the Company,
as applicable, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors’ rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
Section 3.3
No Violation; Consents and Approvals . Except
as set forth on Schedule 3.3 :
(a)
The execution, delivery and performance of the Transaction
Documents by MWE Liberty and the Company and the consummation by
MWE Liberty and the Company of the Transactions do not and will
not: (i) result in any breach of any provision of the
organizational, governing or charter documents, as amended, of MWE
Liberty or the Company; (ii) constitute a default (or an event
that with notice or lapse of time or both would give rise to a
default) under, or give rise to any right of termination,
cancellation, amendment or acceleration (with or without notice,
lapse of time or both) under any of the terms, conditions or
provisions of any contract, note, bond, mortgage, indenture,
license, agreement or other instrument or obligation to which MWE
Liberty or the Company is a party or by which any of the Assets is
bound or affected, except to the extent that such default,
termination, amendment, acceleration or cancellation right
(A) would not have or be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect or
(B) results from obtaining the Miscellaneous Consents after
the Closing pursuant to Section 6.5 ; (iii) result
in a violation of any law, statute, rule, regulation, order,
judgment, injunction, decree or other restriction of any
Governmental Authority to which MWE Liberty or the Company is
subject (including federal and state securities laws and
regulations) or by which any of the Assets is bound or affected
except as may result from obtaining the Miscellaneous Consents
after the Closing pursuant to Section 6.5 ; or
(iv) result in the creation or imposition of any lien, charge
or encumbrance upon any of the Assets, except for Permitted Liens
or as may result from obtaining the Miscellaneous Consents and
contractual consents listed on Schedule 3.3 after the
Closing pursuant to Section 6.5 .
(b)
No declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any Governmental Authority
or other third party is necessary for the consummation by MWE
Liberty or the Company of the Transactions contemplated by the
Transaction Documents, other than such declarations, filings,
registrations, notices, authorization, consents or approvals that
have been or will be obtained or made prior to the Closing and
other than the Miscellaneous Consents that may be obtained after
the Closing pursuant to Section 6.5 .
(c)
No consents are required under the Indentures to permit the
consummation of the Transactions.
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Section 3.4
Capitalization .
(a)
Except for the Company, MWE Liberty does not (i) own, directly
or indirectly, any capital stock, equity interests or other
securities of any Person, or (ii) have any
Subsidiaries.
(b)
Except as set forth on Schedule 3.4(b) , prior to the
Closing, the Company has not conducted any business operations, has
no assets or liabilities and is not a party to any contract or
agreement of any kind or nature (other than the Organizational
Documents of the Company).
(c)
Upon Closing, the Class A Interests and the Class B
Interests issued and sold pursuant to this Agreement (i) will
constitute all of the issued and outstanding membership interests
of the Company and (ii) will be duly authorized, validly
issued and fully paid (to the extent required under the Company
Operating Agreement). Except as set forth in the
Company’s Organizational Documents, there are no existing
subscriptions, rights, warrants, calls, options, convertible or
exchangeable securities, “phantom” equity rights,
equity appreciation rights, equity-based performance units,
commitments, contracts, agreements or undertakings of any character
to which the Company is bound: (i) obligating the
Company to issue, deliver or sell, or cause to be issued, delivered
or sold, additional equity interests in, or any security
convertible or exercisable for, or exchangeable into, any equity
interest in the Company, or (ii) obligating the Company to
issue, grant, extend or enter into any such option, warrant, call,
right, security, commitment, contract, arrangement or
undertaking. There are no outstanding contractual obligations
of the Company to repurchase, redeem or otherwise acquire any
equity interests of the Company. There are no outstanding
securities or other instruments convertible into or exchangeable
for equity interests of the Company and no commitments to issue
such securities or instruments. Except as set forth in the
Company’s Organizational Documents, there are no voting
trusts, proxies or other agreements or understandings to which the
Company is bound with respect to the voting of any equity interests
or other securities of the Company.
Section 3.5
Compliance with Law . (a) MWE Liberty is
(and to MWE Liberty’s Knowledge has been) in compliance in
all material respects with all Laws of any Governmental Authority
applicable to the use, ownership and operation of the Assets;
(b) MWE Liberty has not received written notice of any
material violation of any such Law relating to the use, ownership
and operation of the Assets; and (c) MWE Liberty is not in
material default or violation of any order, writ, judgment, award,
injunction or decree of any Governmental Authority applicable to
the use, ownership or operation of the Assets.
Section 3.6
No Default . MWE Liberty is not in violation of
its organizational, governing or charter documents. Except as set
forth on Schedule 3.6 , MWE Liberty is not in default, and
no event has occurred which, with notice or lapse of time or both,
would give rise to a default, under, or give to others any rights
of termination, amendment, acceleration or cancellation of or
under, any agreement, credit facility, debt or other instrument
(evidencing a debt or other obligation of MWE Liberty) to which MWE
Liberty is a party, by which any of the Assets are bound or
affected, except to the extent that such default, termination,
amendment, acceleration or cancellation right (i) would not
have or be reasonably expected to have,
7
individually or in the aggregate, a Material
Adverse Effect or (ii) results from obtaining the
Miscellaneous Consents after the Closing pursuant to
Section 6.5 .
Section 3.7
Title to Properties and Assets . Except as set
forth on Schedule 3.7(a) , MWE Liberty and its Affiliates
have good, valid and defensible title to all real property (other
than real property and buildings held under lease by MWE Liberty)
and personal property to be transferred pursuant to this Agreement
and the constituent documents contemplated hereby, free and clear
of all liens, encumbrances, security interests, equities, charges
or claims or other restrictions whatsoever, except for Permitted
Liens. With respect to any real property and buildings held
under lease by MWE Liberty or its Affiliates, such real property
and buildings are held under valid and subsisting and enforceable
leases with such exceptions as do not materially interfere with the
present or intended use of such properties by MWE Liberty and its
Affiliates taken as a whole. Except as set forth on
Schedule 3.7(b) , pursuant to the Assignment and Assumption,
MWE Liberty and its Affiliates are validly transferring at Closing
all of their ownership interests in the Assets to the Company, and
the Assets so transferred (together with the Services (as defined
in the Services Agreement) to be provided pursuant to the Services
Agreement) constitute all rights and properties necessary in all
material respects to operate the Business in a manner consistent
with MWE Liberty’s operation of the Business immediately
prior to the Closing, other than the Miscellaneous Consents and
contractual consents listed on Schedule 3.3 that may be
obtained after the Closing pursuant to Section 6.5
.
Section 3.8
Rights-of-Way . Except as set forth on
Schedule 3.8 , the Company, as of Closing, will have such
easements or rights-of-way from each person (collectively, “
Rights-of-Way ”) as are necessary in all
material respects to use, own and operate the Assets in the manner
the Assets were used, owned and operated by MWE Liberty immediately
prior to the Closing. Except as set forth on Schedule
3.8 , MWE Liberty has fulfilled and performed all of its
material obligations with respect to such Rights-of-Way and no
event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or would result in
any impairment of the rights of the holder of any such
Rights-of-Way, except for such revocations, terminations and
impairments that would not have a Material Adverse Effect and the
Miscellaneous Consents that may be obtained after the Closing
pursuant to Section 6.5 .
Section 3.9
Financial Statements . Schedule 3.9
is an accurate copy of the trial balance (the “ Trial
Balance ”) of MWE Liberty as of December 31,
2008 (the “ Trial Balance Date ”) which
accurately reflects the assets and material liabilities of MWE
Liberty as of such date subject to normal year-end
adjustments. Except as set forth on Schedule 3.9 ,
since the Trial Balance Date, there has not been any change in
financial condition, properties, assets, liabilities, business or
results of operations of the Business, which, individually or in
the aggregate, has had or is reasonably likely to have a Material
Adverse Effect. Since the Trial Balance Date, the Company has
not incurred any obligation or liability (whether accrued,
absolute, contingent or otherwise) of the type required to be
reflected on a consolidated balance sheet of the Company prepared
in accordance with GAAP applied on a basis consistent with the
Trial Balance except liabilities and obligations incurred in the
ordinary course of business and consistent with the Initial Budget
or Section 6.8 hereof.
Section 3.10
Environmental Matters . Except as set forth in
Schedule 3.10 :
8
(a)
MWE Liberty and the Assets and operations thereof, are and, during
the relevant time periods specified in all applicable statutes of
limitations, have been in compliance in all material respects with
Environmental Laws;
(b)
MWE Liberty possesses, and is in compliance in all material
respects with, all Environmental Permits for MWE Liberty’s
operation of the Assets as presently conducted and such Permits are
in full force and effect subject to obtaining the Miscellaneous
Consents after the Closing pursuant to Section 6.5
;
(c)
MWE Liberty is not subject to any pending or, to MWE
Liberty’s Knowledge, threatened, Proceeding with respect to
its operation of the Assets, nor has MWE Liberty received any
written notice of violation, noncompliance, or enforcement with
respect to its operation of the Assets that remains pending or any
written notice that it is or is suspected of being a potentially
responsible party under CERCLA or any similar law with respect to
its operation of the Assets that remains pending, or any written
notice of investigation, remediation or request for information
pursuant to Environmental Law from any Governmental Authority with
respect to operation of the Assets that would reasonably be
expected to result in a material liability to MWE Liberty pursuant
to Environmental Laws, which notice of investigation, remediation
or request for information remains pending;
(d)
Except for such matters that would not reasonably be expected to
give rise to any material liability, costs or remedial or
corrective action obligations under Environmental Laws,
(i) there has been no Release or, to MWE Liberty’s
Knowledge, threatened Release of Hazardous Substances by MWE
Liberty or, to MWE Liberty’s Knowledge, any third party; and
(ii) no Hazardous Substances are present in, on, at, under or
from any of the Assets, or otherwise in connection with the
operation of the Assets by MWE Liberty;
(e)
In connection with the operation of the Assets, MWE Liberty has not
assumed or retained by written contract, or to MWE Liberty’s
Knowledge, by operation of law, any material liabilities (including
STRICT LIABILITY) under any Environmental Laws for any Hazardous
Substances; and
(f)
MWE Liberty has made available to NGPMR and the Company complete
and correct copies of all environmental assessment and audit
reports and studies in its possession addressing potentially
material environmental liabilities or obligations relating to MWE
Liberty or its operation of the Assets.
Notwithstanding any other provisions
of this Agreement to the contrary, this Section 3.10
contains the sole and exclusive representations and warranties of
MWE Liberty on environmental matters, including Environmental Laws,
Environmental Claims, Environmental Responses, Environmental
Permits and Hazardous Substances.
Section 3.11
Material Contracts . Each Material Contract is
valid, binding and enforceable in accordance with its terms, and is
in full force and effect. MWE Liberty has provided to NGPMR a
true and complete copy of each Material Contract. MWE Liberty has
not received any written notice of default under any Material
Contract in the 12-month period prior to the date of this
Agreement. Except as set forth on Schedule 3.11 , there are
no (a) uncured
9
defaults of MWE Liberty under any Material
Contract that would give the counterparty thereto the right to
terminate such Material Contract and (b) to MWE
Liberty’s Knowledge, defaults by any of the counterparties to
such Material Contracts.
Section 3.12
Legal Proceedings . There are no Proceedings
pending or, to the MWE Liberty’s Knowledge, threatened,
against MWE Liberty, the Company or the Assets. To MWE
Liberty’s Knowledge, there are no events or circumstances
that have occurred which would reasonably be expected to result in
Proceedings against MWE Liberty, the Company or the
Assets.
Section 3.13
Permits . MWE Liberty has, and upon Closing,
MWE Liberty will transfer to the Company and the Company will have
(or have the benefit of pursuant to Section 6.5 ), all
permits, approvals, consents, licenses, franchises, exemptions and
other governmental authorizations, consents and approvals
(collectively, “ Permits ”) necessary to
use, own and operate the Assets as presently used, owned and
operated, except for any such Permits the failure to have (or have
the benefit of) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. MWE
Liberty has not received any written notification that it is in
violation of any material Permits. MWE Liberty is in material
compliance with all Permits.
Section 3.14
Taxes . All Tax Returns required to be filed
with respect to MWE Liberty and the Assets have been filed and all
such Tax Returns are complete and correct in all material respects;
all Taxes due relating to MWE Liberty and the Assets have been paid
in full (whether or not shown to be due on such Tax Returns).
MWE Liberty has not received any written notice of deficiency or
assessment from any taxing authority with respect to liabilities
for Taxes of MWE Liberty or associated with the ownership or
operation of the Assets, which have not been fully paid or finally
settled, unless being contested in good faith through appropriate
proceedings and for which adequate reserves have been established
in the Trial Balance. All Taxes required to be withheld,
collected or deposited by or with respect to MWE Liberty or
associated with the ownership or operation of the Assets have been
timely withheld, collected or deposited as the case may be, and to
the extent required, have been paid to the relevant taxing
authority. There are no outstanding agreements or waivers
extending the applicable statutory periods of limitation for Taxes
of MWE Liberty or that are associated with the ownership or
operation of the Assets for any period. MWE Liberty, which
was formed on March 26, 2008, is treated as a partnership or a
disregarded entity for U.S. federal income Tax purposes and no
election has been made to treat MWE Liberty as an association
taxable as a corporation.
Section 3.15
Employees .
(a)
Except as set forth on Schedule 3.15(a) ,
(i) neither MWE Liberty nor the Company has or previously had
any employees and (ii) no Affiliate of MWE Liberty or the
Company is a party to a collective bargaining agreement with its
employees.
(b)
Except as set forth on Schedule 3.15(b) , neither MWE
Liberty nor the Company sponsors, maintains, has liability under or
has an obligation to contribute to any “employee benefit
plans” (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
(“ ERISA ”), including, without
limitation,
10
multiemployer plans within the meaning of
Section 3(37) of ERISA), or any stock purchase, stock option,
severance, employment, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation,
employee loan or any other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to
ERISA (all such plans, agreements, programs, policies and
arrangements, collectively, the “ Benefit Plans
”). Neither MWE Liberty nor the Company, nor any of
their ERISA Affiliates, have any liability under Section 412
of the Code or Title IV of ERISA.
Section 3.16
Brokers’ Fee . Except for the fee payable
to Morgan Stanley, which shall be paid by MWE, no broker, finder or
similar intermediary has acted for or on behalf of, or is entitled
to any broker, finder or similar fee or other commission from MWE
Liberty, the Company or any of their Affiliates in connection with
this Agreement or the transactions contemplated hereby.
Section 3.17
Insurance . MWE Liberty has provided or made
available to NGPMR and the Company a true and complete list of all
liability, property, workers’ compensation and other
insurance policies currently in effect that insure or relate to the
Assets.
Section 3.18
Intellectual Property . Except as set forth on
Schedule 3.18 , (a) MWE Liberty owns or has the right
to use, and upon Closing and subject to the Miscellaneous Consents
to be obtained after the Closing pursuant to
Section 6.5 , the Company will own or have the right to
use pursuant to license, sublicense, agreement (including the
Services Agreement) or otherwise all items of Intellectual Property
used in the operation of the Business as presently conducted,
except for such Intellectual Property the failure of which to own
or have the right to use, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect, (b) no third party has asserted in writing delivered
to MWE Liberty a claim that MWE Liberty is infringing on the
Intellectual Property of such third party and (c) to MWE
Liberty’s Knowledge, no third party is infringing on the
Intellectual Property owned by MWE Liberty.
Section 3.19
Affiliate Transactions . Except as set forth on
Schedule 3.19 , there are no existing agreements or
transactions relating to the provision of material services (or
otherwise providing for the payment of material amounts) between
MWE Liberty, on the one hand, and any of its officers, managers,
directors, employees, or any of their respective Affiliates, on the
other hand. Except for any ownership interest in MWE, no
officer, director, manager or employee of MWE Liberty has any
direct or indirect material ownership interest in any Person with
which MWE Liberty has any material business
relationship.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF NGPMR
NGPMR hereby makes the following
representations and warranties to the Company:
Section 4.1
Organization . NGPMR is a limited liability
company duly formed, validly existing and in good standing under
the laws of the State of Delaware and has all requisite limited
liability company power and authority to own, lease and operate its
properties and to carry on its business.
11
Section 4.2
Authority; Enforceability .
(a)
NGPMR has the requisite limited liability company power and
authority to execute and deliver the Transaction Documents to which
it is a party, and to consummate the Transactions. The
execution and delivery by NGPMR of the Transaction Documents to
which it is a party, and the consummation by NGPMR of the
Transactions, have been duly and validly authorized by NGPMR and no
other limited liability company proceedings on the part of NGPMR is
necessary to authorize the Transaction Documents or to consummate
the Transactions.
(b)
Each of the Transaction Documents to which NGPMR is a party has
been (or will be, in the case of Transaction Documents to be
delivered at Closing) duly executed and delivered by NGPMR and,
assuming the due authorization, execution and delivery by the other
parties thereto, each Transaction Document to which NGPMR is a
party constitutes (or will constitute, in the case of Transaction
Documents to be delivered at Closing) the valid and binding
agreement of NGPMR, and is enforceable against NGPMR in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or
affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 4.3
No Violation; Consents and Approvals .
(a)
The execution, delivery and performance of the Transaction
Documents by NGPMR and the consummation by NGPMR of the
Transactions do not and will not: (i) result in any
breach of any provision of the Organizational Documents, as
amended, of NGPMR; (ii) constitute a default (or an event that
with notice or lapse of time or both would give rise to a default)
under, or give rise to any right of termination, cancellation,
amendment or acceleration (with or without notice, lapse of time or
both) under any of the terms, conditions or provisions of any
contract, note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which NGPMR is a party or by
which any of its assets is bound, except to the extent that such
default, termination, amendment, acceleration or cancellation right
would not have or be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect; or (iii) result
in a violation of any law, statute, rule, regulation, order,
judgment, injunction, decree or other restriction of any
Governmental Authority to which NGPMR is subject (including federal
and state securities laws and regulations) or by which any of its
assets is bound.
(b)
Other than the filings with respect to the HSR Act set forth in
Section 6.1 , no declaration, filing or registration
with, or notice to, or authorization, consent or approval of, any
Governmental Authority is necessary for the consummation by NGPMR
of the Transactions contemplated by the Transaction Documents,
other than such declarations, filings, registrations, notices,
authorization, consents or approvals that have been obtained or
made prior to the Closing.
Section 4.4
Brokers’ Fee . No broker, finder or
similar intermediary has acted for or on behalf of, or is entitled
to any broker, finder or similar fee or other commission from
NGPMR
12
or any of its Affiliates, in connection with
this Agreement or the transactions contemplated hereby.
ARTICLE 5
INDEMNIFICATION
Section 5.1
Survival .
(a)
The representations and warranties of MWE Liberty contained in
Article 3 shall survive the Closing until the date that
is ** after the date of the Closing, with the exception that the
representations and warranties in (i) ** shall survive the
Closing until ** after the ** and (ii) ** shall survive
**. The representations and warranties of NGPMR contained in
** shall survive **, with the exception that the representations
and warranties in ** shall survive the Closing until the date that
is ** after the date of the Closing.
(b)
All covenants and agreements contained herein that by their terms
are to be performed in whole or in part subsequent to the Closing,
shall survive the Closing in accordance with their terms;
provided that the agreement by MWE Liberty to indemnify the
NGPMR Covered Persons pursuant to ** shall survive the Closing
until the date that is ** after the Closing Date; provided further
that the covenants contained in Section 6.3 shall
survive **.
(c)
The period of time a representation or warranty or covenant or
agreement survives the Closing pursuant to this
Section 5.1 shall be the “ Survival
Period ” with respect to such representation or
warranty or covenant or agreement. In the event notice of any
claim for indemnification under this Article 5 shall
have been asserted in writing within the applicable Survival Period
and such claim has not been finally resolved by the expiration of
such Survival Period, the representations or warranties or
covenants or agreements that are the subject of such claim shall
survive, but only to the extent of the underlying facts of
the claim (so long as the facts or circumstances alleged to give
rise to such claim have been specified in reasonable detail and are
not based on speculative facts, circumstances or other events) as
made prior to the expiration of the Survival Period, until such
claim is finally resolved.
Section 5.2
Indemnification by the Company .
(a)
Subject to the terms of this Article 5 , from and after
the Closing, the Company shall indemnify, defend and hold harmless
MWE Liberty and its Affiliates and their respective directors,
members, managers, stockholders, officers, partners, employees,
agents, consultants, attorneys, representatives, successors,
transferees and assignees (collectively, the “ MWE
Liberty Covered Persons ”) from and against any
losses, claims, damages, liabilities (including STRICT LIABILITY),
costs and expenses (including reasonable attorneys’ fees and
expenses), interest, penalties, judgments and settlements of any
and every kind and character, known or unknown, fixed or contingent
(collectively, “ Losses ”), incurred,
arising out of, or relating to, the Assumed Liabilities except to
the extent such Losses arise from the same facts
13
and circumstances as a good faith
indemnification claim by the Company or NGPMR pursuant to
Section 5.3 .
(b)
Subject to the terms of this Article 5 , from and after
the Closing, the Company shall indemnify, defend and hold harmless
the NGPMR Covered Persons to the fullest extent permitted by law,
from and against any Losses incurred, arising out of or related to
those items set forth in Section 5.3 (for which MWE
Liberty has an obligation to indemnify the NGPMR Covered Persons)
to the extent that MWE Liberty fails to remedy such Losses pursuant
to Section 5.7(b) .
Section 5.3
Indemnification by MWE Liberty . Subject to the
terms of this Article 5 , from and after the Closing,
MWE Liberty shall indemnify, defend and hold harmless the Company,
NGPMR and its Affiliates and their respective directors, members,
managers, stockholders, officers, partners, employees, agents,
consultants, attorneys, representatives, successors, transferees
and assignees (collectively, the “ NGPMR Covered
Persons ”) to the fullest extent permitted by law,
from and against any Losses, incurred, arising out of or relating
to (a) any breach of any of the representations or warranties
(in each case, when made) of MWE Liberty contained in
Article 3 , (b) any breach of any of the covenants
of MWE Liberty contained in this Agreement, (c) the ownership,
management or operation of the Assets prior to the Closing Date,
other than the Specified Liabilities, (d) those items listed
on Schedule 5.3(d) or (e) those items listed on
Schedule 5.3(e) . It is acknowledged and agreed by the
Parties that the indemnity obligations of MWE Liberty under
Section 5.3(d) and Section 5.3(e)
shall **by ** in the **.
Section 5.4
Indemnification by NGPMR . Subject to the terms
of this Article 5 , from and after the Closing, NGPMR
shall indemnify and hold harmless the MWE Liberty Covered Persons,
to the fullest extent permitted by law, from and against Losses
incurred, arising out of or relating to (i) any breach of any
of the representations or warranties (in each case, when made) of
NGPMR contained in Article 4 or (ii) any breach of
any of the covenants of NGPMR in this Agreement.
Section 5.5
No Effect on Services Agreement and Company Operating
Agreement . Notwithstanding anything to the contrary
contained in this Agreement, no provision of
Section 5.2 or Section 5.3 shall be
construed to have any effect upon, or to otherwise limit, any
indemnification obligation contained in the Services Agreement or
the Company Operating Agreement.
Section 5.6
Third Party Claims Procedures .
(a)
In the event that any action, suit, claim or proceeding is
commenced by a third party involving a claim for which a party
required to provide indemnification hereunder (an “
Indemnifying Party ”) may be liable to a party
entitled to indemnification (an “ Indemnified
Party ”) hereunder (a “ Third Party
Claim ”), the Indemnified Party shall promptly notify
the Indemnifying Party in writing of such Third Party Claim
indicating the nature of such claim and the basis therefore (the
“ Claim Notice ”) and the Indemnifying
Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with
defense thereof; provided
14
that if the Indemnifying Party does not promptly take
reasonable action to assume such defense, the Indemnified Party may
lead the defense of such potentially indemnified claim and the
Indemnifying Party shall be liable for all additional costs and
expenses incurred by the Indemnified Party in connection therewith,
provided further , that no failure of any Indemnified Party
to give such Claim Notice and no delay on the part of the
Indemnified Party in giving any such Claim Notice shall relieve the
Indemnifying Party of any indemnification obligation hereunder
except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying
Party.
(b)
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless:
(i) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (ii) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in
any such Proceeding; or (iii) the named parties to any such
Proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of
interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of
the Indemnifying Party, such counsel shall be at the expense of the
Indemnifying Party). It being understood, however, that the
Indemnifying Party shall not, in connection with any one such
Proceeding, be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all Indemnified Parties,
which firm shall be appointed by a majority of the Indemnified
Parties; provided, however , that in the case a single firm
of attorneys would be inappropriate due to actual or potential
differing interests or conflicts between such Indemnified Parties
and any other party represented by such counsel in such Proceeding
or otherwise, then the Indemnifying Party shall be liable for the
fees and expenses of one additional firm of attorneys with respect
to such Indemnified Parties. The Indemnifying Party shall not
be liable for any settlement of any such Proceeding effected
without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party (which in the
event that the Indemnified Party is the Company shall include the
written consent of NGPMR, not to be unreasonably withheld), effect
any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless (A) such settlement
includes a full and unconditional release of such Indemnified Party
from all liability on claims that are the subject matter of such
Proceeding, (B) does not contain any admission of wrongdoing
or illegal conduct and (C) the Indemnifying Party has agreed
in writing that it is liable to the Indemnified Party for an
indemnification payment in respect of the full amount of the
settlement.
Section 5.7
Satisfaction of Claims for Indemnification
.
(a)
The Parties agree that in the event any Losses are determined to
have been incurred as a result of an indemnification claim pursuant
to Section 5.3 , MWE Liberty shall have the right to
first satisfy and discharge any such Losses by either (i) **
for such Losses and/or (ii) ** such Losses;
15
provided that , (i) if and to the extent any such ** for
any ** for which it is entitled to indemnity hereunder, MWE Liberty
shall indemnify NGPMR ** for any such Losses pursuant to
Section 5.7(b) and (ii) in no event shall **
a claim for indemnification made pursuant to this
Article 5 has been satisfied **, or that ** any
obligation hereunder, **.
(b)
In the event that MWE Liberty fails to satisfy in full any Losses
in accordance with Section 5.7(a) ** such Losses
being finally determined, MWE Liberty shall satisfy any such claim
for indemnification by either (i) ** for any Losses incurred
by NGPMR ** or (ii) having ** (as such term is defined in the
Company Operating Agreement) ** the amount of any such Company Loss
that has not been satisfied in full pursuant to
Section 5.7(a) ; provided that ** set forth
above by providing ** within 30 days of such Losses being finally
determined. In the event that unremedied Losses are to be
indemnified pursuant to clause (ii) of this
Section 5.7(b) , MWE Liberty and NGPMR shall ** the
Company Operating Agreement ** an amount equal to such unremedied
Loss.
Section 5.8
Limits on Indemnification .
(a)
In calculating amounts payable to an Indemnified Party, the amount
of any indemnified Losses shall be determined without duplication
of any other Loss for which an indemnification claim has been made
or could be made under any other representation, warranty,
covenant, or agreement and shall be computed net of
(i) payments actually recovered by the Indemnified Party under
any insurance policy with respect to such Losses and (ii) any
prior or subsequent actual recovery by the Indemnified Party from
any Person with respect to such Losses and (iii) any Tax
Benefit accruing to any Indemnified Party on account of such
Losses.
(b)
Notwithstanding any other provision of this Agreement, in no event
shall any Party be liable for punitive, special, incidental,
indirect, consequential or lost profits damages of any kind or
nature, regardless of the form of action through which such damages
are sought, except for any such damages recovered by any third
party against any Party in respect of which such Party would
otherwise be entitled to indemnification pursuant to the terms
hereof.
(c)
In addition to being entitled to exercise all rights provided
herein, including recovery of damages, the Parties will be entitled
to specific performance under this Agreement. The Parties
agree that monetary damages may not be adequate compensation for
any loss incurred by reason of any breach of obligations described
in the foregoing sentence and hereby agree to waive in any action
for specific performance of any such obligation the defense that a
remedy at law would be adequate.
(d)
If the Closing occurs, neither the Company nor NGPMR will be
entitled to indemnity under ** of this Agreement for Losses with
respect to any claim under ** until the aggregate amount of all
such claims
16
**, and thereafter, the Company
and/or NGPMR shall ** Losses **; provided however , that all
Losses resulting from or arising out of any ** shall be indemnified
against ** to the **. Except for a claim of actual fraud
involving a knowing and intentional misrepresentation or omission
of a material fact or willful or intentional breach, in no event
will the aggregate liability of (i) ** under ** and
(ii) ** under ** in respect of ** claims of ** under ** exceed
**; provided, however , that the aggregate liability of **
under ** with respect to ** shall not exceed **; provided,
further that the aggregate liability of ** under ** in respect
of ** claims of ** under ** with respect to ** shall not exceed
**. Notwithstanding anything to the contrary in this
Agreement, in no event shall the aggregate liability of (i) **
arising under this Agreement and from the transactions contemplated
hereby exceed ** and (ii) ** arising under this Agreement and
from the transactions contemplated hereby exceed **. The
reimbursement and indemnification obligations set forth in ** shall
not be subject to any of the limitations set forth in this
Section 5.8 .
(e)
In no event shall the ** recovery of any Losses pursuant to this
Article 5 be duplicative.
(f)
The remedies provided in this Article 5 shall be the
sole and exclusive legal remedies of the Parties, from and after
the Closing, with respect to this Agreement and the transactions
contemplated hereby; provided that nothing in this
Section 5.8(f) shall prevent either Party from
(i) seeking specific performance, injunctive and/or equitable
relief for claims of breach or failure to perform covenants
performable under this Agreement at any time after the Closing or
(ii) pursuing, and recovering in respect of, any claim based
on actual fraud involving a knowing and intentional
misrepresentation or omission of a material fact or willful or
intentional breach.
Section 5.9
Extent of Indemnification . WITHOUT LIMITING
THE SCOPE OF THE INDEMNIFICATION, DISCLAIMER, RELEASE AND
ASSUMPTION OBLIGATIONS SET FORTH IN THIS AGREEMENT, TO THE FULLEST
EXTENT PERMITTED BY LAW, AN INDEMNIFIED PERSON SHALL BE ENTITLED TO
INDEMNIFICATION HEREUNDER IN ACCORDANCE WITH THE TERMS HEREOF,
REGARDLESS OF WHETHER THE INDEMNIFIABLE LOSS GIVING RISE TO ANY
SUCH INDEMNITY OBLIGATION IS THE RESULT OF THE SOLE, ACTIVE,
PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY OR
OTHER LEGAL FAULT OR VIOLATION OF ANY LAW OF OR BY ANY SUCH
INDEMNIFIED PERSON.
Section 5.10
No Reliance . THE REPRESENTATIONS AND
WARRANTIES OF MWE LIBERTY CONTAINED IN ARTICLE 3
CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF
MWE LIBERTY TO THE COMPANY IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREBY.
17
THE REPRESENTATIONS AND WARRANTIES OF NGPMR
CONTAINED IN ARTICLE 4 CONSTITUTE THE SOLE AND
EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF NGPMR TO THE COMPANY IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY. EXCEPT
FOR SUCH REPRESENTATIONS AND WARRANTIES (IN EACH CASE, AS MODIFIED
BY THE SCHEDULES HERETO), NONE OF MWE LIBERTY, THE COMPANY, NGPMR
OR ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WITH RESPECT TO SUCH PARTIES, THE ASSETS
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND EACH PARTY
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY
SUCH PARTIES OR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES (INCLUDING WITH RESPECT TO THE
DISTRIBUTION TO, OR ANY SUCH PERSON’S RELIANCE ON, ANY
INFORMATION, DOCUMENTS OR OTHER MATERIAL MADE AVAILABLE TO SUCH
PERSON IN ANY DATA ROOM, MANAGEMENT PRESENTATION OR IN ANY OTHER
FORM IN EXPECTATION OF, OR IN CONNECTION WITH, THE
TRANSACTIONS CONTEMPLATED HEREBY). EXCEPT FOR SUCH
REPRESENTATIONS AND WARRANTIES (IN EACH CASE, AS MODIFIED BY THE
SCHEDULES HERETO), EACH PARTY HEREBY DISCLAIMS ALL LIABILITY
AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY,
PROJECTION, FORECAST, STATEMENT, OR INFORMATION MADE, COMMUNICATED,
OR FURNISHED (ORALLY OR IN WRITING) TO ANY OTHER PARTY OR ITS
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES (INCLUDING OPINION, INFORMATION, PROJECTION, OR
ADVICE THAT MAY HAVE BEEN OR MAY BE PROVIDED TO ANY PARTY
OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT, OR
REPRESENTATIVE OF SUCH PARTY OR ANY OF ITS AFFILIATES).
ARTICLE 6
COVENANTS
Section 6.1
HSR Filing .
(a)
As promptly as reasonably possible following the execution of this
Agreement, but in no event later than 10 Business Days following
such date, NGPMR shall make such filings as may be required under
the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976 (“
HSR Act ”) with respect to the transactions
contemplated by this Agreement and, in making such filings, NGPMR
shall request early termination of the waiting period specified in
the HSR Act. Thereafter, NGPMR shall file as promptly as
possible all reports or other documents required or requested by
the U.S. Federal Trade Commission (“ FTC
”) or the U.S. Department of Justice (“
DOJ ”) pursuant to the HSR Act or otherwise
including requests for additional information concerning such
transactions. Without limiting the foregoing, NGPMR and MWE
Liberty shall use commercially reasonable efforts to cooperate and
oppose any preliminary injunction sought by any Governmental
Authority under the HSR Act preventing the consummation of the
transactions contemplated by this Agreement. NGPMR and MWE
Liberty shall cause their respective counsel to furnish the other
party such necessary information and reasonable assistance as the
other may reasonably request in connection with NGPMR’s
preparation of necessary filings or submissions under the
provisions of the HSR Act. NGPMR
18
shall cause its counsel to supply to MWE Liberty
copies of the date stamped receipt copy of the cover letters
delivering the filings or submissions required under the HSR Act to
the FTC or DOJ, as applicable. Notwithstanding anything in
this Section 6.1 to the contrary, neither NGPMR nor
MWE, nor any of their Affiliates, shall be required by this
Section 6.1 to take any action that would require or
result in holding separate or divesting assets or operations of
NGPMR, MWE Liberty or any of their Affiliates in order to have
satisfied their obligation to use their commercially reasonable
efforts under this Section 6.1 .
(b)
The cost all filing or application fees associated with filings
under the HSR Act shall be ** . Within two Business
Days of filing under the HSR Act, ** .
Section 6.2
Tax Effect .
(a)
None of the Parties (nor such Parties’ counsel or
accountants) has made or is making any representations to any other
Party (nor such Party’s counsel or accountant) concerning any
of the Tax effects of the transactions provided for in this
Agreement. Each Party hereto represents that it has obtained,
or may obtain, independent Tax advice with respect thereto and upon
which it, if so obtained, has solely relied.
Section 6.3
Tax Matters .
(a)
Each of the Parties agrees to cooperate fully with each other Party
to enable each Party to more accurately determine its own tax
liability and to minimize such liability to the extent legally
permissible. Each Party shall provide and make available to
each other Party such records as a Party may reasonably request for
the defense of any audit, examination, administrative appeal or
litigation of any Tax Return or other similar governmental report
or form.
(b)
MWE Liberty shall be liable for, and shall indemnify, defend and
hold harmless the Company for, any and all liability for Taxes with
respect to the Assets for any taxable period ending on or before
the Closing Date (“ Pre-Closing Tax Period
”) and with respect to any taxable period that begins on or
before and ends after the Closing Date (“ Straddle
Period ”), for the portion thereof ending on the
Closing Date. In the case of any Straddle Period, the amount
of Taxes with respect to the Assets allocable to the portion of the
Straddle Period ending on the Closing Date shall be deemed to be
the amount of such Taxes for the entire period (or, in the case of
such Taxes determined on an arrears basis, the amount of such Taxes
for the immediately preceding period) multiplied by a fraction, the
numerator of which is the number of calendar days in the applicable
period ending on and including the Closing Date and the denominator
of which is the number of calendar days in the entire relevant
period.
(c)
Ad valorem property Taxes imposed on or with respect to the Assets
for the taxable period (for purposes of this section,
“taxable period” means the period beginning on the
assessment date for ad valorem property Taxes through the day
before the next assessment date for such Taxes) that contains the
Closing Date shall be prorated between MWE Liberty and Company
based on the relative number of days prior to the Closing Date and
on and after the Closing Date during the taxable period, with MWE
Liberty being responsible for such prorated ad valorem property
Taxes for the period prior to the Closing Date and Company
being
19
responsible for such prorated ad valorem
property Taxes for the period beginning on the Closing Date.
Upon receipt of the ad valorem property Tax bills for the taxable
period that contains the Closing Date, MWE Liberty shall calculate
the prorated ad valorem property Taxes and shall bill Company for
such amount, with Company making such payment within 20 days of
receipt of such bill. Company shall promptly forward to MWE
Liberty any ad valorem property Tax bills for the taxable period
that contains the Closing Date that are received by Company.
MWE Liberty shall be responsible as between MWE Liberty and Company
for the payment of the total amount of ad valorem property Taxes
imposed on or with respect to the Assets for the taxable period
that contains the Closing Date.
Section 6.4
Further Assurances . From time to time after
the Closing Date, and without any further consideration, the
Parties agree to, and MWE Liberty agrees to cause its Affiliates
to, as applicable, execute, acknowledge and deliver all such
additional deeds, assignments, bills of sale, conveyances,
instruments, notices, releases, acquittances and other documents,
and will do all such other acts and things, all in accordance with
applicable Laws, as may be reasonably necessary to give effect to
the transactions consummated by this Agreement and to collect and
reduce to the possession of the Company the Assets and to effect
the assumption by the Company of the Assumed
Liabilities.
Section 6.5
Consents . Except for those consents listed on
Schedule 7.2(c) , which are required to be obtained prior to
the Closing, MWE Liberty shall use commercially reasonable efforts
to obtain and, to the extent that any Assets are held in the name
of an Affiliate of MWE Liberty, cause its Affiliates to use
commercially reasonable efforts to obtain, any other consents of
third parties, including Governmental Authorities, which are
required to be obtained for the assignment of the Assets to the
Company (the “ Consents ”) prior to the
Closing. Prior to obtaining the Consents, any Asset that is
not otherwise assignable or transferable (each a “
Non-Assigned Asset ”) shall be deemed to be
held by MWE Liberty or such Affiliate, as applicable, at all times
during the Holding Period in accordance with this Section.
During the Holding Period, MWE Liberty shall and shall cause its
Affiliates to, to the extent MWE Liberty or its Affiliates may
lawfully and validly do so, grant to the Company a non-exclusive
right and license to use each such Non-Assigned Asset and provide
the Company with the economic benefits and risks of ownership of
the Non-Assigned Assets, the intent of the parties being to provide
the Company, to the extent the same can be reasonably done, with
the same access and ability to utilize such Non-Assigned Assets as
if such Non-Assigned Assets had been included within the
Assets. Upon receipt of the Consent related to a Non-Assigned
Asset, such Non-Assigned Asset shall automatically be deemed to be
an Asset without the need for any further action on the part of the
parties or any other Person and without the payment of any
additional consideration, but subject to the provisions of
Section 6.4 . The Company shall cooperate in good
faith with MWE Liberty and its Affiliates in connection with the
pursuit of the Consents.
Section 6.6
Expenses . Except to the extent otherwise
specifically provided herein, all costs and expenses incurred by
NGPMR in connection with the Transaction Documents and the
Transactions shall be paid by ** , including all fees of its
legal counsel, financial and business advisers and accountants;
provided that the ** to be ** . MWE
Liberty shall bear its own expenses incurred in connection with the
Transaction Documents and the Transactions whether or not the
Transactions are consummated, including all fees of its legal
counsel, financial and
20
business advisers and accountants (which for
clarity purposes shall include the fees of Morgan
Stanley).
Section 6.7
Public Statements . The Parties shall consult
with each other prior to issuing any public announcement, statement
or other disclosure with respect to this Agreement, the other
Transaction Documents or the transactions contemplated hereby or
thereby and neither MWE Liberty on one hand nor NGPMR on the other
shall issue any such public announcement, statement or other
disclosure without having first received the written consent of the
other Party, except as may be required by law.
Section 6.8
Conduct of Business . From the date of this
Agreement through the Closing, MWE Liberty shall operate the
Business in the ordinary course and, without limiting the
generality or effect of the foregoing, MWE Liberty shall use
reasonable efforts to maintain the Assets, comply with all
applicable Laws, and preserve intact the Business and its
relationships with customers, suppliers and others having business
relationships with it, in each case in all material respects.
Without limiting the generality or effect of the foregoing, except
as set forth on Schedule 3.4(b) or as contemplated in
Section 7.2(e) , prior to the Closing, without the
prior written consent of NGPMR, which consent shall not be
unreasonably withheld, neither MWE Liberty nor the Company shall
(a) enter into any commercial contracts with an expected
annual revenue in excess of ** (b) enter into any
commercial, capital or construction contracts reasonably expected
to cause the Company to incur obligations in excess of ** or
(c) make any capital expenditures in excess of ** in
the aggregate.
ARTICLE
7
CONDITIONS PRECEDENT
Section 7.1
Conditions to Each Party’s Obligations .
The respective obligation of each Party to effect the transactions
contemplated hereby is subject to the satisfaction at or prior to
the date hereof of the following conditions:
(a)
NGPMR shall have made all filings required under the HSR Act and
the applicable waiting periods shall have expired or been
terminated without any conditions that would require or result in
either NGPMR or MWE Liberty holding separate or divesting assets or
operations.
(b)
No temporary restraining order, preliminary or permanent injunction
or other order (whether temporary, preliminary or permanent) issued
by any court or other Governmental Authority of competent
jurisdiction or other legal restraint or prohibition shall be in
effect which prevents the consummation of the transactions
contemplated by this Agreement.
(c)
No legal proceeding shall be pending that involves any challenge to
or seeking damages or other relief in connection with the
transactions contemplated by this Agreement or that may have the
effect of preventing, delaying, making illegal, imposing
limitations or conditions on or otherwise interfering with the
transactions contemplated by this Agreement.
(d)
The Credit Agreement shall be amended concurrent with the Closing
to (i) exclude the Company as a Subsidiary and as a Loan Party
(as such terms are defined in the
21
Credit Agreement), (ii) release the Assets
to be contributed to the Company at Closing from any Liens (as such
term is defined in the Credit Agreement) under the Credit Agreement
and (iii) permit MWE Liberty’s initial contribution to,
and future investments in, the Company.
(e)
(i) The Company shall ** (as such term is defined in
the ** ) under the ** and (ii) MWE Liberty shall
provide a certificate to NGPMR, dated as of the Closing Date,
certifying that the condition specified in this
Section 7.1(e) have been satisfied, together with
supporting documentation that ** .
Section 7.2
Conditions to NGPMR’s Obligations . The
obligation of NGPMR to consummate the transactions contemplated by
this Agreement is subject to the satisfaction of the following
conditions, any one or more of which may be waived in writing by
NGPMR:
(a)
Representations, Warranties and Covenants of MWE Liberty
. (i) Each of the representations and warranties of MWE
Liberty made in this Agreement will be true and correct as of the
date of this Agreement (except to the extent such representations
and warranties speak to an earlier date, in which case as of such
earlier date) and as of the Closing (as if made anew at and as of
the Closing, except to the extent such representations speak to an
earlier date, in which case as of such earlier date) except to the
extent the failure of such representations and warranties to be
true and correct as of the Closing Date has not had, and is not
reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect (provided that for purposes of determining
whether the condition set forth in this sentence has been
satisfied, all “Material Adverse Effect” and other
materiality qualifiers contained in the MWE Liberty’s
representations and warranties shall be disregarded), and
(ii) MWE Liberty shall have performed or complied in all
material respects with all of the covenants and agreements required
by this Agreement to be performed or complied with by MWE Liberty
on or before the Closing;
(b)
No Material Adverse Effect . Since the date of the
Agreement, there shall not have been any Material Adverse Effect
with respect to MWE Liberty or the Assets;
(c)
Third Party Consents; Governmental Approvals . The
consents, authorizations, approvals, exemptions and/or waivers
listed on Schedule 7.2(c) shall have been received or
obtained by MWE Liberty;
(d)
Purchase and Sale Agreement . The closing contemplated
by that certain Purchase and Sale Agreement, dated as of **
, between ** and MWE Liberty and/or the Company, shall have
occurred;
(e)
** Agreements . The agreements between
MWE Liberty and ** to (i) include ** from the
** , (ii) provide for an ** to result in an
** and (iii) increase ** to ** ;
and
(f)
Closing Documents . MWE Liberty shall have delivered
or caused to be delivered all of the closing deliveries set forth
in Section 2.4(b) .
Section 7.3
Conditions to MWE Liberty’s Obligations .
The obligation of MWE Liberty to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of
the following conditions, any one or more of which may be waived in
writing by MWE Liberty:
22
(a)
Representations, Warranties and Covenants of NGPMR .
(i) Each of the representations and warranties of NGPMR made
in this Agreement will be true and correct as of the date of this
Agreement (except to the extent such representations and warranties
speak to an earlier date, in which case as of such earlier date)
and as of the Closing (as if made anew at and as of the Closing,
except to the extent such representations and warranties speak to
an earlier date, in which case as of such earlier date) except to
the extent the failure of such representations and warranties to be
true and correct as of the Closing Date has not had, and is not
reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect (provided that for purposes of determining
whether the condition set forth in this sentence has been
satisfied, all “Material Adverse Effect” and other
materiality qualifiers contained in the NGPMR’s
representations and warranties shall be disregarded), and
(ii) NGPMR shall have performed or complied in all material
respects with all of the covenants and agreements required by this
Agreement to be performed or complied with by NGPMR on or before
the Closing; and
(b)
Closing Documents . MWE shall have delivered or caused
to be delivered all of the closing deliveries set forth in
Section 2.4(a) .
ARTICLE 8
TERMINATION
Section 8.1
Termination . At any time prior to the Closing,
this Agreement may be terminated and the transactions contemplated
hereby abandoned:
(a)
by the mutual consent of NGPMR and MWE Liberty as evidenced in
writing signed by each of NGPMR and MWE Liberty;
(b)
by NGPMR, if there has been a breach by MWE Liberty of any
representation, warranty or covenant contained in this Agreement
that has prevented the satisfaction of any condition to the
obligations of NGPMR at the Closing and, if such breach is of a
character that it is capable of being cured, such breach has not
been cured by MWE Liberty within thirty (30) days after written
notice thereof from NGPMR; provided that NGPMR is not then
in material breach of the condition set forth in
Section 8.1(c) ;
(c)
by MWE Liberty, if there has been a breach by NGPMR of any
representation, warranty or covenant contained in this Agreement
that has prevented the satisfaction of any condition to the
obligations of MWE Liberty at the Closing and, if such breach is of
a character that it is capable of being cured, such breach has not
been cured by NGPMR within thirty (30) days after written notice
thereof from MWE Liberty provided that MWE Liberty is not
then in material breach of the condition set forth in
Section 8.1(b) ;
(d)
by either NGPMR or MWE Liberty if any Governmental Authority having
competent jurisdiction has issued a final, non-appealable order,
decree, ruling or injunction (other than a temporary restraining
order) or taken any other action permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this
Agreement; or
(e)
by either NGPMR or MWE Liberty, if the transactions contemplated
hereby have not been consummated by March 13, 2009,
provided that neither NGPMR nor MWE Liberty will be
entitled to terminate this Agreement pursuant to this
Section 8.1(e) if such
23
Person’s breach of this Agreement has
prevented the consummation of the transactions contemplated by this
Agreement.
Section 8.2
Effect of Termination . If this Agreement is
terminated under Section 8.1, all further obligations of the
Parties under this Agreement will terminate without further
liability or obligation of either Party to the other Parties
hereunder; provided, however , nothing herein shall
prejudice the ability of the non-breaching party from seeking
damages from any other Party for any actual fraud involving a
knowing and intentional misrepresentation or omission of a material
fact or willful or intentional breach of this Agreement, including
attorneys’ fees and the right to pursue any remedy at law or
in equity; provided further that if NGPMR terminates this
Agreement as a result of a failure of a condition set forth in
Section 8.1(b) due to a material
misrepresentation or inaccuracy of a representation or warranty by
MWE Liberty made as of the date hereof, then MWE Liberty shall
** as set forth in ** . The Confidentiality
Agreement shall not be affected by a termination of this
Agreement. Nothing in this Section 8.2 will
relieve any Party of their obligation to ** as set forth in
** .
ARTICLE 9
GENERAL PROVISIONS
Section 9.1
Effective Time . If the transactions
contemplated hereby are consummated in accordance with the terms
and conditions of this Agreement, the ownership of the Assets and
the Assumed Liabilities shall be deemed transferred as of
11:59 p.m., Houston, Texas time, on the Closing
Date.
Section 9.2
Costs; Taxes . The Company shall be responsible
for recording and filing documents associated with the transfer of
the Assets to it and for all costs and fees associated therewith,
including (i) filing the assignments with appropriate federal,
state and local Governmental Authorities as required by applicable
Law and (ii) the payment of any and all stamp, documentary,
real property transfer, sales, gross receipts, use or similar Taxes
or assessments (if any) arising out of the conveyance of the Assets
and the assumption of the Assumed Liabilities as contemplated by
this Agreement (collectively, the “ Transfer
Taxes ”). Each Party shall cooperate with the
other in timely making all filings, returns, reports and forms as
may be required in connection with the payment of the expenses,
fees and costs contemplated by the previous sentence, including
delivering all instruments and certificates as are reasonably
necessary to minimize such expenses, fees and costs and to enable
the other Party to timely comply with the filing of any tax return
that relates to such expenses, fees and costs.
Section 9.3
Notices . Any notice, demand or communication
required or permitted under this Agreement shall be in writing and
delivered personally or by reputable overnight delivery service or
other courier, and shall be deemed to have been duly given as of
the date and time reflected on the delivery receipt, addressed as
follows:
If to the Company:
MarkWest Liberty
Midstream & Resources, L.L.C.
1515 Arapahoe Street
Tower 2, Suite 700
24
Denver, Colorado
80202-2126
Attention: Senior Vice
President and Chief Operations Officer
and
MarkWest Liberty
Midstream & Resources, L.L.C.
1515 Arapahoe Street
Tower 2, Suite 700
Denver, Colorado
80202-2126
Attention: General
Counsel
If to MWE Liberty:
MarkWest Liberty Gas Gathering,
L.L.C.
1515 Arapahoe Street
Tower 2, Suite 700
Denver, Colorado
80202-2126
Attention: Senior Vice
President and Chief Operations Officer
and
MarkWest Liberty Gas Gathering,
L.L.C.
1515 Arapahoe Street
Tower 2, Suite 700
Denver, Colorado
80202-2126
Attention: General
Counsel
If to NGPMR:
M&R MWE Liberty, LLC
1401 McKinney,
Suite 1025
Houston, Texas 77010
Attention: Jeffrey C.
Rawls
with a copy to:
Locke Lord Bissell &
Liddell, LLP
600 Travis Street,
Suite 3400
Houston, Texas 77002
Fax (713) 229-2518
Attention: H. William
Swanstrom
A Party may change its address for the purposes
of notices hereunder by giving notice to the other Party specifying
such changed address in the manner specified in this
Section 9.3 .
25
Section 9.4
Binding Effect . This Agreement will be binding
upon, and will inure to the benefit of, the Parties and their
respective successors, permitted assigns and legal
representatives.
Section 9.5
No Third Party Rights . The provisions of this
Agreement are intended to bind the Parties as to each other and are
not intended to and do not create rights in any other Person or
confer upon any other Person (other than the express beneficiaries
of the indemnity provisions contained in Sections 5.2, 5.3 and
5.4 ) 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 9.6
No Waiver . No waiver or consent, express or
implied, by any Party to or of any breach or default by any Person
in the performance by such Person of its obligations hereunder
shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by such Person of the
same or any other obligations of such Person hereunder. Failure on
the part of a Party to complain of any act of any Person or to
declare any Person in default, irrespective of how long such
failure continues, shall not constitute a waiver by such Party of
its rights hereunder until the applicable statute of limitations
period has run.
Section 9.7
Applicable Law . THIS AGREEMENT AND THE RIGHTS
OF THE PARTIES HEREUNDER SHALL BE INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL
BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS; PROVIDED, HOWEVER , THAT MATTERS CONCERNING TITLE
TO THE TRANSFERRED ASSETS SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE JURISDICTION WHERE SUCH TRANSFERRED
ASSETS ARE LOCATED. THE PARTIES FURTHER AGREE THAT ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT
RELATING HERETO MAY BE BROUGHT ONLY IN A FEDERAL OR STATE
COURT OF COMPETENT JURISDICTION IN HOUSTON, TEXAS. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, BUT NOT LIMITED
TO, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON-CONVENIENCE, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF SUCH ACTION OR PROCEEDING IN ANY SUCH RESPECTIVE
JURISDICTION.
Section 9.8
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 9.9
Amendment or Modification . This Agreement may
be amended, modified or supplemented from time to time only by a
written agreement executed by all the Parties.
26
Section 9.10
Assignment; Deed; Bill of Sale . No Party shall
have the right to assign its right or obligations under this
Agreement without the prior written consent of the other
Parties. To the extent required and permitted by applicable
Law, this Agreement shall also constitute a “deed,”
“bill of sale” or “assignment” of the
assets and interests referenced herein.
Section 9.11
Conspicuousness of Provisions . THE PARTIES
ACKNOWLEDGE AND AGREE THAT THE PROVISIONS CONTAINED IN THIS
AGREEMENT THAT ARE IN CAPITALIZED LETTERS SATISFY THE REQUIREMENT
OF THE “EXPRESS NEGLIGENCE RULE” AND ANY OTHER
REQUIREMENT AT LAW OR IN EQUITY THAT PROVISIONS CONTAINED IN A
CONTRACT BE CONSPICUOUSLY MARKED OR HIGHLIGHTED.
Section 9.12
Counterparts . This Agreement may be executed
in any number of counterparts with the same effect as if all
Parties had signed the same document. All counterparts shall
be construed together and shall constitute one and the same
instrument. Execution and delivery of this Agreement by
exchange of facsimile or other electronically transmitted
counterparts bearing the signature of a Party shall be equally as
effective as delivery of a manually executed counterpart by such
Party.
Section 9.13
No Recourse Against Officers or Directors . For
the avoidance of doubt, the provisions of this Agreement shall not
give rise to any right of recourse against any officer, director or
manager of any Party.
Section 9.14
Entire Agreement; Supersedure . This Agreement
and the instruments referenced herein supersede all previous
understandings or agreements among the Parties, whether oral or
written, with respect to their subject matter. This Agreement and
such instruments contain the entire understanding of the Parties
with respect to the subject matter hereof and thereof. 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.
[Signature Page Follows]
27
IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first written
above.
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MARKWEST LIBERTY GAS GATHERING,
L.L.C.
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By:
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/s/ Frank M. Semple
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Frank M. Semple
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President and Chief Executive Officer
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MARKWEST LIBERTY MIDSTREAM & RESOURCES,
L.L.C.
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By:
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/s/ Frank M. Semple
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Frank M. Semple
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President and Chief Executive Officer
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M&R MWE LIBERTY, LLC
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By:
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/s/ John Raymond
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Name:
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John Raymond
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Title:
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Managing Partner & Chief Executive
Officer
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Signature Page to Contribution
Agreement
EXHIBIT A
DEFINED TERMS
“ Act ” means the
Delaware Limited Liability Company Act, 6 Del.C. §§
18-101 et seq ., as it may be amended from time to
time, and any successor thereto.
“ Affiliate ” means
with respect to a Person, any other Person that, directly or
indirectly, Controls, is Controlled by, or is under Common Control
with, the specified Person.
“ Agreement ” means
this Contribution Agreement, as it may be amended, supplemented or
modified from time to time.
“ Area of Mutual Interest
” has the meaning ascribed to such term in the Company
Operating Agreement.
“ Assets ” shall have
the meaning set forth in Section 2.1(b) .
“ Assignment and Assumption
” shall have the meaning set forth in
Section 2.4(b)(v) .
“ Assumed Liabilities
” shall have the meaning set forth in Section 2.2
.
“ Base Cap
” means **.
“ Basket Amount ”
means **.
“ Benefit Plans ”
shall have the meaning set forth in Section 3.15(b)
.
“ Business ” shall
have the meaning set forth in the recitals.
“ Business Day ” means
any day that is not a Saturday, Sunday or other day on which
commercial banks are required or authorized by law to be closed in
the State of Texas or the State of Colorado.
“ CERCLA ” means the
Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. §9601 et seq., as amended.
“ Class A Interests
” has the meaning ascribed to such term in the Company
Operating Agreement.
“ Class A Member
” has the meaning ascribed to such term in the Company
Operating Agreement.
“ Class A Percentage
Interests ” has the meaning ascribed to such term in
the Company Operating Agreement.
“ Class B Interests
” has the meaning ascribed to such term in the Company
Operating Agreement.
A-1
“ Class B
Member ” has the meaning ascribed to such term in the
Company Operating Agreement.
“ Claim Notice ” shall
have the meaning set forth in Section 5.6(a)
.
“ Closing ” shall have
the meaning set forth in Section 2.3 .
“ Closing Date ” shall
have the meaning set forth in Section 2.3 .
“ Code ” means the
Internal Revenue Code of 1986, as amended.
“ Company ” shall have
the meaning set forth in the preamble.
** means an amount equal to the lesser of
(a) ** or (b) the ** at the time of an indemnification
claim pursuant to **, in each case, less any amount paid by ** in
respect of indemnification claims under this Agreement.
“ Company Operating
Agreement ” shall have the meaning set forth in the
recitals.
“ Confidentiality Agreement
” shall mean that certain Amended and Restated
Confidentiality Agreement, dated as of ** , by and between
MarkWest Energy Partners, L.P. and NGP Midstream &
Resources, L.P.
“ Consents ” shall
have the meaning set forth in Section 6.5 .
“ Control ,” including
the correlative terms “Controlling,” “Controlled
by” and “under Common Control with” means
possession, directly or indirectly (through one or more
intermediaries), of the power to direct or cause the direction of
the management or policies (whether through ownership of securities
or any partnership or other ownership interest, by contract or
otherwise) of a Person. For the purposes of this definition,
ownership of more than 50% of the voting interests of any entity
shall be conclusive evidence that Control exists.
“ Credit Agreement ”
means that certain Credit Agreement, dated as of February 20,
2008, among MWE, certain subsidiary guarantors, Royal Bank of
Canada, as Administrative Agent and Collateral Agent, and the other
lenders party thereto.
“ Disclosed Liabilities
” means any and all liabilities of MWE Liberty and/or the
Company (i) arising from or relating to matters set forth on
the disclosure schedules of MWE Liberty or (ii) set forth on
the Trial Balance or arising after the date of the Trial Balance in
the ordinary course of business.
“ DOJ ” shall have the
meaning set forth in Section 6.1(a) .
“ Effective Date ”
means 12:01 a.m. on January 1, 2009.
“ Environmental Claim
” means any Proceeding or Loss resulting from or arising out
of: (i) violation of or liability (including STRICT LIABILITY)
under any Environmental Law or
A-2
Environmental Permit; (ii) the performance
of an Environmental Response; (iii) unlawful exposure to
Hazardous Substances; or (iv) the Release of any Hazardous
Substances.
“ Environmental Laws ”
means any and all applicable laws (including common law), rules,
ordinances, codes, decrees, judgments, directives, judicial or
administrative orders or regulations of any Governmental Authority
having jurisdiction over MWE Liberty or its Assets pertaining to
prevention of pollution, protection of the environment, remediation
of contamination, or workplace health and safety, including CERCLA;
the Resource Conservation and Recovery Act, 42 U.S.C. § 6901
et seq .; the Federal Water Pollution Control Act, 33
U.S.C. § 1251 et seq .; the Clean Air Act, 42
U.S.C. § 7401 et seq .; the Hazardous Materials
Transportation Act, 49 U.S.C. § 5101 et seq .;
the Toxic Substances Control Act, 15 U.S.C. §§ 2601
through 2629; the Oil Pollution Act, 33 U.S.C. § 2701
et seq .; the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. § 11001 et seq .;
the Safe Drinking Water Act, 42 U.S.C. §§ 300f through
300j; the Occupational Safety and Health Act, 29 U.S.C. § 651
et seq .; each as amended, and all similar laws,
rules and regulations of any Governmental Authority having
jurisdiction over MWE Liberty or its Assets.
“ Environmental Permits
” means Permits required under Environmental Law.
“ Environmental Response
” means any action required under Environmental Law:
(i) to prevent, respond to, remove, remediate, abate,
investigate or monitor the release or threatened release of
Hazardous Substances at, on, in, about, under, within or near the
air, soil, surface water, groundwater, or other environmental
media; or (ii) to correct a violation under Environmental
Law.
“ ERISA ” shall have
the meaning set forth in Section 3.15(b) .
“ ERISA Affiliate ”
means any entity (whether or not incorporated) which is a member of
a controlled group including MWE Liberty or the Company or which is
under Common Control with MWE Liberty or the Company within the
meaning of Sections 414(b), (c), (m) or (o) of the
Code.
“ Excluded Assets ”
shall have the meaning set forth in Section 2.1(b)(ii)
.
“ FTC ” shall have the
meaning set forth in Section 6.1(a) .
“ GAAP ” means
generally accepted accounting principles in the United
States.
“ Governmental Authority
” means any governmental, quasi-governmental, state, county,
city or other political subdivision of the United States or any
other country, or any agency, court or instrumentality, foreign or
domestic, or statutory or regulatory body thereof.
“ Hazardous Substances
” means and includes each substance, waste or material
regulated, defined, designated or classified as a hazardous waste,
hazardous substance, hazardous material, pollutant, contaminant or
toxic (or words of similar import) substance under any
Environmental Law and any petroleum or petroleum products that have
been Released into the environment, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls and naturally occurring radioactive material.
A-3
“ Holding Period ”
means, for any particular Non-Assigned Asset, the period beginning
on the Closing Date and ending on the earlier of (i) the date
upon which the contract or agreement for which the Consent was not
obtained expires, or (ii) the date upon which such Consent or
an alternative arrangement is obtained on terms that are
substantially similar in operational and economic effects as would
have been achieved if the Non-Assigned Asset had been included
within the Assets.
“ HSR Act ” shall have
the meaning set forth in Section 6.1(a) .
“ Indebtedness ” of
any Person means any obligations of such Person: (a) for
borrowed money, (b) evidenced by notes, bonds, indentures or
similar instruments, (c) for the deferred purchase price of
goods and services (other than trade payables incurred in the
ordinary course of business), (d) under capital leases or
(e) in the nature of guarantees of the obligations described
in clauses (a) through (d) above of any other
Person.
“ Indemnified Party ”
shall have the meaning set forth in Section 5.6(a)
.
“ Indemnifying Party ”
shall have the meaning set forth in Section 5.6(a)
.
“ Indentures ” means
(a) that certain Indenture, dated as of April 15, 2008,
by and among MWE, MarkWest Energy Finance Corporation, a Delaware
corporation, the Subsidiary Guarantors (as defined therein), and
Wells Fargo Bank, National Association, a national banking
association, as trustee, (b) that certain Indenture, dated as
of July 6, 2006, by and among MWE, MarkWest Energy Finance
Corporation, a Delaware corporation, the Subsidiary Guarantors (as
defined therein), and Wells Fargo Bank, National Association, a
national banking association, as trustee, as amended and
supplemented, and (c) that certain Indenture, dated as of
October 25, 2004, by and among MWE, MarkWest Energy Finance
Corporation, a Delaware corporation, the Subsidiary Guarantors (as
defined therein), and Wells Fargo Bank, National Association, a
national banking association, as trustee, as amended and
supplemented.
“ Initial Budget ”
shall have the meaning ascribed to such term in the Company
Operating Agreement.
“ Intellectual Property
” means intellectual property rights, statutory or common
Law, worldwide, including (a) trademarks, service marks, trade
dress, slogans, logos and all goodwill associated therewith, and
any applications or registrations for any of the foregoing;
(b) copyrights and any applications or registrations for any
of the foregoing; and (c) patents, all confidential know-how,
trade secrets and similar proprietary rights in confidential
inventions, discoveries, improvements, processes, techniques,
devices, methods, patterns, formulae, specifications, and lists of
suppliers, vendors, customers, and distributors.
“ Investment Balance ”
shall have the meaning ascribed to such term in the Company
Operating Agreement.
“ Knowledge ” means
the actual knowledge of the Persons listed on Schedule
1.1.
A-4
“ Law ” means any law,
statute, code, ordinance, order, rule, rules of common law,
regulation, judgment, decree, injunction, franchise, permit,
certificate, license, authorization, or other directional
requirement of any Governmental Authority.
“ Losses ” shall have
the meaning set forth in Section 5.2 .
“ Material Adverse Effect
” means any effect, event, development or change,
(a) which individually or in the aggregate with all effects,
events, developments or changes is or is reasonably likely to
become materially adverse to the business, assets, liabilities,
properties, results of operations or financial condition of the
Person, taken as a whole, or (b) prevents or has an adverse
effect on the ability of the Person to execute and perform their
obligations under this Agreement or the other Transaction Documents
or to consummate the transactions contemplated hereby and thereby
in accordance with the terms hereof and thereof, excluding any such
result or consequence resulting from or related to (i) changes
in general economic, political or business conditions which affect
the Person, except any such changes that affect the Person in a
disproportionate manner compared to similarly situated participants
in the industries in which the Person operates;
(ii) conditions affecting the oil and gas industry or oil and
gas services industry generally except any such changes that affect
the Person in a disproportionate manner compared to similarly
situated participants in the industries in which the Person
operates; (iii) any change in law or in accounting
rules except any such change that affects the Person in a
disproportionate manner compared to similarly situated participants
in the industries in which the Person operates; or
(iv) conditions or effects that have been demonstrated by the
Person as resulting from the announcement of the existence of this
Agreement.
“ Material Contracts ”
shall mean all contracts, agreements, personal property leases,
commitments, understandings or instruments of MWE Liberty or by
which MWE Liberty is bound that (a) is reasonably expected to
(i) result in expenditures or liabilities in excess of
** or (ii) generate annual revenues in excess of
** , (b) contains any provision or covenant, which
after the Closing will apply to the Business, or the Company,
prohibiting or materially restricting MWE Liberty from engaging in
any lawful business activity or competing with any person or entity
within the Area of Mutual Interest (as such term is defined in the
Company Operating Agreement), (c) relates to Indebtedness of
MWE Liberty or (d) is in respect of any partnership, joint
venture or other similar agreement or arrangement or otherwise
relates to the joint ownership or operation of the assets owned by
MWE Liberty.
“ Members ” shall have
the meaning set forth in the recitals.
“ Miscellaneous Consents
” means (a) all Consents that are not set forth on
Schedule 7.2(c) and which relate to interests in real
property, including, without limitation, leases, rights-of-way,
easements and other property use agreements and (b) Permits or
Environmental Permits issued by Governmental Authorities which are
required in connection with the ownership or operation of the
Assets ** , and which Consents shall include any
requirements of the applicable Governmental Authorities requiring
the reissuance of any such Permits or Environmental Permits in
connection with the Closing and by the Transaction
Documents.
“ MWE ” means MarkWest
Energy Partners, L.P., a Delaware limited partnership.
A-5
“ MWE **” means an
amount equal to MWE Liberty’s ** as of the Closing Date after
giving effect to ** the Company contemplated hereby (prior to the
** ).
“ MWE Liberty ” shall
have the meaning set forth in the preamble.
“ MWE Liberty Covered Person
” shall have the meaning set forth in Section 5.2
.
“ NGPMR ” shall have
the meaning set forth in the preamble.
“ NGPMR Covered Persons
” shall have the meaning set forth in Section 5.3
.
“ Non-Assigned Asset ”
is defined in Section 6.5 .
“ Organizational Documents
” means the articles of incorporation, certificate of
incorporation, certificate of formation, certificate of limited
partnership, bylaws, operating agreement, partnership agreement,
stockholders’ agreement and all other similar documents,
instruments or certificates executed, adopted or filed in
connection with the creation, formation or organization of a
Person, including any amendments thereto.
“ Parties ” shall have
the meaning set forth in the preamble.
“ Permits ” shall have
the meaning set forth in Section 3.13 .
“ Permitted Liens ”
means (a) statutory liens for current Taxes applicable to the
assets of MWE Liberty or assessments not yet delinquent or the
amount or validity of which is being contested in good faith and
for which adequate reserves have been established in the Trial
Balance; (b) mechanics’, carriers’,
workers’, repairers’, landlords’, and other
similar liens arising or incurred in the ordinary course of
business MWE Liberty relating to obligations as to which there is
no default on the part of MWE Liberty; and (c) any liens,
encumbrances, security interests, equities, charges or other
restrictions with respect to assets of MWE Liberty, which, together
with all other liens, encumbrances, security interests, equities,
charges or other restrictions, do not materially detract from the
value of the Assets or materially interfere with the present use of
the Assets or the conduct of the business of MWE
Liberty.
“ Person ” means any
natural person, corporation, limited partnership, general
partnership, limited liability company, joint stock company, joint
venture, association, company, estate, trust, bank trust company,
land trust, business trust, or other organization, whether or not a
legal entity, custodian, trustee-executor, administrator, nominee
or entity in a representative capacity and any Governmental
Authority.
**
“ Pre-Closing Tax Period
” shall have the meaning set forth in
Section 6.3(b) .
“ Proceeding ” means
any legal action, litigation, arbitration, hearing, written claim,
legal proceeding, prosecution, investigation (for which
investigation a Governmental Authority has provided notice to MWE
Liberty), or suit (whether civil, criminal or administrative)
commenced,
A-6
brought, conducted, or heard by or before, or
otherwise involving, any Governmental Authority or any
arbitrator.
“ Release ” means any
depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating,
injecting, escaping, leaching, dumping, or disposing.
“ Rights-of-Way ”
shall have the meaning set forth in Section 3.8
.
“ Services Agreement ”
shall have the meaning set forth in the recitals.
“ Specified Liabilities
” means (a) the Disclosed Liabilities and
(b) liabilities first arising after the Closing Date and
relating to the ownership, management or operation of the Assets
under any contract, agreement, Permit or other instrument existing
as of the Closing Date. “Specified Liabilities”
shall not include those items listed on Schedule 5.3(d)
and Schedule 5.3(e) .
“ Straddle Period ”
shall have the meaning set forth in Section 6.3(b)
.
“ Subsidiary ” of any
Person (the “ Subject Person ”) means any
Person, whether incorporated or unincorporated, of which
(a) at least 50% of the securities or ownership interests
having by their terms ordinary voting power to elect a majority of
the board of directors or other Persons performing similar
functions, (b) a general partner interest or (c) a
managing member interest, is directly or indirectly owned or
Controlled by the Subject Person or by one or more of its
respective Subsidiaries.
“ Survival Period ”
shall have the meaning set forth in Section 5.1(c)
.
“ Tax ” or “
Taxes ” means (a) any taxes, assessments,
fees, unclaimed property and escheat obligations and other
governmental charges imposed by any Governmental Authority,
including, but not limited to, income, profits, gross receipts, net
proceeds, alternative or add-on minimum, ad valorem, value added,
turnover, sales, use, property, personal property (tangible and
intangible), environmental, stamp, leasing, lease, user, excise,
duty, franchise, capital stock, transfer, registration, license,
withholding, social security (or similar), unemployment,
disability, payroll, employment, social contributions, fuel, excess
profits, occupational, premium, windfall profit, severance,
estimated, or other charge of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not;
(b) any liability for the payment of any amounts of the type
described in clause (a) arising by reason of transferee or
successor liability; and (c) any liability for the payment of
any amounts of the type described in clause (a) or (b) as
a result of the operation of all or any express or implied
obligation to indemnify any other Person.
“ Tax Benefit ” means
the reduction in the amount of Taxes that otherwise would have been
paid by any Indemnified Party as a result of incurring any
Losses.
“ Tax Return ” means
any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
“ Third Party Claim ”
shall have the meaning set forth in Section 5.6(a)
.
A-7
“ Transaction Documents
” shall have the meaning set forth in Section 2.4
.
“ Transactions ” shall
have the meaning set forth in Section 2.4 .
“ Transfer Taxes ”
shall have the meaning set forth in Section 9.2
.
“ Trial Balance ”
shall have the meaning set forth in Section 3.9
.
“ Trial Balance Date ”
shall have the meaning set forth in Section 3.9
.
** means that certain ** , by and between
MWE Liberty and ** , as amended by Amendment No. 1 to
** , by and between MWE Liberty and ** .
A-8
EXHIBIT B
ASSETS
The Assets include, without
limitation, the following:
1. The lease of the “ Interim Plant
” ** .
2. All natural gas gathering and processing
facilities and equipment located on the property that is the
subject of that certain ** , which are not either
(i) the Interim Plant; (ii) that certain natural gas
processing plant, and all of the equipment and appurtenances
relating thereto, referred to as the “ Fisk Plant
” in that ** ; or (iii) facilities and
equipment otherwise owned by ** .
3. The contractual right to purchase the Fisk Plant
pursuant to the Fisk Purchase Agreement.
4. The natural gas gathering and processing systems
located in Washington County, Pennsylvania and identified on the
map set forth as Annex A to this exhibit.
5. The following compressor sites:
a. Zappi-Hoskins
b. Shaw
c. Johnston
d. Godwin
e. Stewart
f.
Fulton
g. Dryer
h. Black
i.
Gapen
6. The fixed assets listed on Annex B to
this exhibit.
7. The assets related to the construction in
progress listed on Annex C to this exhibit.
8. The Air Permits listed on Annex D to this
exhibit.
9. The Road Bore Permits listed on Annex E
to this exhibit.
10. The Stream Crossing Permits listed on Annex
F to this exhibit.
11. The Easements listed on Annex G to this
exhibit.
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**
[4 pages have been omitted and
filed separately with the Securities and Exchange Commission
pursuant to the request for confidential treatment.]
Annex D
AIR PERMITS
MARKWEST LIBERTY GAS GATHERING,
L.L.C.
COMPRESSOR STATIONS AND PLANTS
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WASHINGTON
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AIR PERMIT
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COUNTY
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PERMIT DATE
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NUMBER
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Zappi-Hoskins #1
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5-Aug-08
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GP5-63-00938
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Shaw #4
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7-Aug-08
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GP5-63-00940A
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Shaw #4
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7-Aug-08
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GP5-63-00940
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Johnston #3
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5-Jun-08
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GP5-63-00933A
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Johnston #3
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5-Jun-08
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GP5-63-00933
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Godwin #4
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17-Jun-08
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GP5-63-00934A
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Godwin #4
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17-Jun-08
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GP5-63-00934
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Stewart #5
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5-Aug-08
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GP5-63-00939
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Fulton
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27-Jun-08
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GP5-63-00937
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Dryer
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6-Aug-08
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GP5-63-00942
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Houston Gas Plant
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30-Jun-08
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GP5-63-00936
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Houston Gas Plant
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30-Jun-08
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GP9-63-00936
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Houston Gas Plant
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30-Jun-08
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Application for a Plan
Approval
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GREEN
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AIR PERMIT
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COUNTY
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PERMIT DATE
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NUMBER
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Gapen
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5-Aug-08
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GP5-30-00176
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Black
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14-Nov-08
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GP5-30-00181
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**
[26 pages have been omitted and
filed separately with the Securities and Exchange Commission
pursuant to the request for confidential treatment.]
EXHIBIT C
COMPANY OPERATING AGREEMENT
See attached.
AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT
of
MARKWEST LIBERTY MIDSTREAM & RESOURCES,
L.L.C.
Dated as of
,
2009
TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINED TERMS
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1
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Section 1.1
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Definitions
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1
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ARTICLE 2 FORMATION AND TERM
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14
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Section 2.1
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Formation
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14
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Section 2.2
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Name
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15
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Section 2.3
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Term
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15
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Section 2.4
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Registered Agent and Office
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15
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Section 2.5
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Principal Place of Business
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15
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Section 2.6
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Qualification in Other Jurisdictions
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15
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ARTICLE 3 PURPOSE AND POWERS OF THE
COMPANY
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16
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Section 3.1
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Purpose
|
16
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Section 3.2
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Powers of the Company
|
16
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Section 3.3
|
Projects, Restricted Projects, Exempted Projects
and Out of Scope Projects
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16
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|
ARTICLE 4 CAPITAL CONTRIBUTIONS, MEMBER
INTERESTS, CAPITAL ACCOUNTS AND FUTURE CAPITAL
REQUIREMENTS
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18
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Section 4.1
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Capital Contributions
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18
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Section 4.2
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Capital Contribution Defaults
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21
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Section 4.3
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Member’s Interest
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21
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Section 4.4
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Status of Capital Contributions
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21
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Section 4.5
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Capital Accounts
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22
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Section 4.6
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Capital Accounts Generally
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22
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Section 4.7
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Preferred Return
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22
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Section 4.8
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Investment Accounts
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23
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Section 4.9
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Equalization Target Date
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23
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ARTICLE 5 MEMBERS, MEETINGS AND
AMENDMENTS
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24
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Section 5.1
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Powers of Members
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24
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Section 5.2
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No Resignation or Expulsion
|
24
|
|
Section 5.3
|
Additional Members
|
25
|
|
Section 5.4
|
Confidentiality Obligations of
Members
|
25
|
|
Section 5.5
|
Initial Budget
|
26
|
|
Section 5.6
|
Incentive Interests to MWE Liberty Upon Transfer
of NGPMR’s Interest
|
26
|
|
Section 5.7
|
Preemptive Rights
|
27
|
|
Section 5.8
|
Registration Rights
|
28
|
|
|
|
|
|
ARTICLE 6 MANAGEMENT
|
28
|
|
Section 6.1
|
Management Under Direction of the
Board
|
28
|
|
Section 6.2
|
Number, Tenure and Qualifications
|
28
|
|
Section 6.3
|
Votes Per Manager; Quorum; Required Vote for
Board Action; Meetings of the Board
|
30
|
|
Section 6.4
|
Power to Bind Company
|
31
|
|
Section 6.5
|
Liability for Certain Acts
|
31
|
|
Section 6.6
|
Manager Has No Exclusive Duty to
Company
|
31
|
|
Section 6.7
|
Resignation and Withdrawal
|
31
|
i
|
Section 6.8
|
Removal
|
32
|
|
Section 6.9
|
Vacancies
|
32
|
|
Section 6.10
|
Delegation of Authority; Officers
|
32
|
|
Section 6.11
|
Designation of Operator
|
32
|
|
Section 6.12
|
Approval of Members
|
34
|
|
Section 6.13
|
Reliance by Third Parties
|
36
|
|
Section 6.14
|
Fees and Expenses of the Managers
|
37
|
|
Section 6.15
|
Budgets
|
37
|
|
|
|
|
|
ARTICLE 7 ASSIGNABILITY OF MEMBER
INTERESTS
|
38
|
|
Section 7.1
|
Prohibition on Assignment During Project
Period
|
38
|
|
Section 7.2
|
Transfers After the Project Period
|
39
|
|
Section 7.3
|
Recognition of Assignment by Company or Other
Members
|
41
|
|
Section 7.4
|
Effective Date of Assignment
|
41
|
|
Section 7.5
|
Limitations on Transfer
|
42
|
|
Section 7.6
|
Transferee Not a Substitute Member
|
42
|
|
|
|
|
|
ARTICLE 8 DISTRIBUTIONS TO MEMBERS
|
42
|
|
Section 8.1
|
Available Cash
|
42
|
|
Section 8.2
|
Incentive Interest Percentage
Distributions
|
43
|
|
Section 8.3
|
Withholding
|
43
|
|
Section 8.4
|
Limitations on Distribution
|
43
|
|
Section 8.5
|
Tax Distributions
|
43
|
|
|
|
|
|
ARTICLE 9 ALLOCATIONS
|
44
|
|
Section 9.1
|
Profits and Losses
|
44
|
|
Section 9.2
|
Special Allocations
|
44
|
|
Section 9.3
|
Curative Allocations
|
45
|
|
Section 9.4
|
Income Tax Allocations
|
46
|
|
Section 9.5
|
Allocation and Other Rules
|
46
|
|
|
|
|
|
ARTICLE 10 BOOKS AND RECORDS
|
47
|
|
Section 10.1
|
Inspection Rights Pursuant to Law
|
47
|
|
Section 10.2
|
Books and Records
|
47
|
|
Section 10.3
|
Financial Statements and Reports
|
47
|
|
Section 10.4
|
Accounting Method
|
48
|
|
Section 10.5
|
Bank Accounts; Investments
|
48
|
|
|
|
|
|
ARTICLE 11 TAX MATTERS
|
49
|
|
Section 11.1
|
Taxation of Company
|
49
|
|
Section 11.2
|
Tax Returns
|
49
|
|
Section 11.3
|
Member Tax Return Information
|
49
|
|
Section 11.4
|
Tax Matters Representative
|
49
|
|
Section 11.5
|
Right to Make Section 754
Election
|
50
|
|
Section 11.6
|
Tax Elections
|
50
|
|
Section 11.7
|
Tax Reimbursement
|
50
|
|
|
|
|
|
ARTICLE 12 LIABILITY, EXCULPATION AND
INDEMNIFICATION
|
50
|
|
Section 12.1
|
Liability
|
50
|
|
Section 12.2
|
Exculpation
|
51
|
|
Section 12.3
|
Indemnification
|
51
|
ii
|
Section 12.4
|
Expenses
|
51
|
|
Section 12.5
|
Insurance
|
51
|
|
Section 12.6
|
Certain Liabilities
|
52
|
|
Section 12.7
|
Acts Performed Outside the Scope of the
Company
|
52
|
|
Section 12.8
|
Liability of Members to Company or Other
Members
|
52
|
|
Section 12.9
|
Attorneys’ Fees
|
52
|
|
Section 12.10
|
Subordination of Other Rights to
Indemnity
|
52
|
|
Section 12.11
|
Survival of Indemnity Provisions
|
52
|
|
|
|
|
|
ARTICLE 13 DISSOLUTION, LIQUIDATION AND
TERMINATION
|
52
|
|
Section 13.1
|
No Dissolution
|
52
|
|
Section 13.2
|
Events Causing Dissolution
|
53
|
|
Section 13.3
|
Notice of Dissolution
|
53
|
|
Section 13.4
|
Liquidation
|
53
|
|
Section 13.5
|
Termination
|
54
|
|
Section 13.6
|
Claims of the Members or Third
Parties
|
54
|
|
Section 13.7
|
Distributions In-Kind
|
54
|
|
|
|
|
|
ARTICLE 14 REPRESENTATIONS, WARRANTIES AND
COVENANTS
|
55
|
|
Section 14.1
|
Representations, Warranties and
Covenants
|
55
|
|
|
|
|
|
ARTICLE 15 MISCELLANEOUS
|
56
|
|
Section 15.1
|
Notices
|
56
|
|
Section 15.2
|
Failure to Pursue Remedies
|
56
|
|
Section 15.3
|
Cumulative Remedies
|
56
|
|
Section 15.4
|
Binding Effect
|
57
|
|
Section 15.5
|
Interpretation
|
57
|
|
Section 15.6
|
Severability
|
57
|
|
Section 15.7
|
Counterparts
|
57
|
|
Section 15.8
|
Integration
|
57
|
|
Section 15.9
|
Amendment or Restatement
|
57
|
|
Section 15.10
|
Governing Law
|
57
|
|
Section 15.11
|
Dealings in Good Faith
|
58
|
|
Section 15.12
|
Partition of the Property
|
58
|
|
Section 15.13
|
Third Party Beneficiaries
|
58
|
|
Section 15.14
|
Tax Disclosure Authorization
|
58
|
|
Section 15.15
|
Waivers and Consents
|
58
|
iii
|
EXHIBITS:
|
|
|
|
|
|
|
|
Exhibit A
|
Area of Mutual Interest
|
|
|
Exhibit B
|
Members and Capital Contributions
|
|
|
Exhibit C
|
Base Project
|
|
|
Exhibit D
|
Initial Budget
|
|
|
Exhibit E
|
Illustrative Example Calculation of Incentive
Interests
|
|
|
Exhibit F
|
Services Agreement
|
|
|
Exhibit G
|
Capital Expenditures for Agreements
|
|
|
Exhibit H
|
Pre-Approved Affiliated Transactions
|
|
|
Exhibit I
|
Bring Down Certificate
|
|
|
Exhibit J
|
Escrow Agreement
|
|
|
Exhibit K
|
Fractionation and NGL Purchase
Agreement
|
|
iv
AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT
OF
MARKWEST LIBERTY MIDSTREAM & RESOURCES,
L.L.C.
THIS AMENDED AND RESTATED LIMITED
LIABILITY COMPANY AGREEMENT (“Agreement”) of MarkWest
Liberty Midstream & Resources, L.L.C., a Delaware limited
liability company (the “Company”), is executed and
agreed to as of
[ ]
[ ], 2009, by and among MarkWest Liberty Gas
Gathering, L.L.C., a Delaware limited liability company (“MWE
Liberty”), M&R MWE Liberty, LLC, a Delaware limited
liability company (“NGPMR”), and such other Persons who
may become Members of the Company from time to time pursuant
hereto.
WHEREAS, MWE Liberty, as the then
sole member of the Company, entered into that certain Limited
Liability Company Agreement (the “Original Agreement”)
of the Company, dated as of January 20, 2009;
WHEREAS, in order to initially
capitalize the Company, at or before the Closing, the Members shall
make the Initial Capital Contributions and from time to time
thereafter, certain of the Members shall make additional Capital
Contributions in accordance with Article 4;
WHEREAS, in order to effect the
contribution of the cash consideration comprising NGPMR’s
Initial Capital Contribution and the assets comprising MWE
Liberty’s Initial Capital Contribution, the Company, MWE
Liberty and NGPMR entered into that certain Contribution Agreement,
dated January 22, 2009 (the “Contribution
Agreement”), pursuant to which MWE Liberty agreed to
contribute, convey, assign and transfer to the Company all of MWE
Liberty’s right, title and interest in and to the assets
referenced thereunder;
WHEREAS, contemporaneously with the
execution of this Agreement and in order to provide for the
provision of certain services to the Company, the Company, MWE
Liberty and MarkWest Hydrocarbon, Inc., a Delaware corporation
(“MWE Hydrocarbon”) shall enter into that certain
Services Agreement in the form attached hereto as
Exhibit F (the “Services Agreement”),
pursuant to which MWE Hydrocarbon shall provide certain services,
or cause such services to be provided, to the Company;
WHEREAS, upon the Closing, the
parties to the Contribution Agreement shall consummate the
transactions contemplated by the Contribution Agreement and this
Agreement shall become effective; and
WHEREAS, the Company and the Members
desire to amend and restate the Original Agreement in its entirety
to reflect the agreement of the Company and the Members as set
forth herein;
NOW THEREFORE, in consideration of
the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, effective
as of the Closing the Original Agreement is hereby amended and
restated in its entirety to read as follows:
ARTICLE 1
DEFINED TERMS
Section 1.1
Definitions
.
Unless the context otherwise
requires, the terms defined in this Article I shall, for the
purposes of this Agreement, have the meanings herein
specified.
“AAA” shall have the
meaning set forth in Section 6.15(e).
“Accountants shall have the
meaning set forth in Section 4.1(a)(iii).
“Act” means the Delaware
Limited Liability Company Act, 6 Del. C. §§ 18-101
et seq ., as it may be amended from time to time, and
any successor statute thereto.
“Additional Member”
shall have the meaning set forth in Section 5.3(a).
“Additional Projects”
shall have the meaning set forth in Section 3.3(a).
“Adjusted Capital
Account” means the Capital Account maintained for each Member
(a) increased by any amounts the Member is obligated to
contribute or restore to the Company pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5), and (b) decreased by any amounts described in
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or
(6) with respect to such Member.
“Adjusted Capital Account
Deficit” means a deficit balance in the Adjusted Capital
Account of a Member.
“Affiliate” means with
respect to a Person, any other Person that, directly or indirectly,
Controls, is Controlled by, or is under Common Control with, the
specified Person.
“Affiliate Contract”
means any contract between the Company or any Subsidiary of the
Company, on the one hand, and a Member or an Affiliate of a Member,
on the other hand.
“Affiliated Member
Group” means (a) the MWE Liberty Group, (b) the
NGPMR Group and (c) any other Member and transferee of
Interests directly or indirectly (in the chain of title) from such
Member that is an Affiliate of such transferee Member;
provided , however , that once a Person is designated
as a member of any Affiliated Member Group, such Person shall, as
long as it owns any Interests, at all times be a member of such
Affiliated Member Group and not a member of any other Affiliated
Member Group, and provided, further, that for purposes of this
clause (c) of this definition, an Affiliate shall not include
a member of the MWE Liberty Group or the NGPMR Group.
“Agreement” means this
Amended and Restated Limited Liability Company Agreement, as
amended, modified, supplemented or restated from time to
time.
“Annual Financial
Statements” shall have the meaning set forth in
Section 10.3(a).
“Approved Budget” shall
have the meaning set forth in Section 6.15(b).
“Arbitration Panel”
shall have the meaning set forth in
Section 6.15(e).
“Area of Mutual
Interest” means the area ** identified ** as
Exhibit A .
“Assumed Tax Liability”
shall have the meaning set forth in Section 8.5(a).
“Available Cash” means,
with respect to any period prior to the dissolution of the Company,
all cash and cash equivalents of the Company on hand at the end of
such period less the amount of any cash reserves established by the
Operator to provide for the proper conduct of the business of the
Company, including reserves for: future capital expenditures;
current, future or contingent liabilities; anticipated future
credit needs of the Company; and debt service and repayments;
provided that such reserves shall
2
not equal less than ** as authorized in
the Approved Budget nor more than ** in the Approved Budget,
without the approval of the Board and Requisite Member
Approval.
“Base Project” shall
have the meaning set forth in Section 3.3(a).
“Board” shall have the
meaning set forth in Section 6.1.
“Bring Down Certificate”
means a certificate, in the form attached hereto as
Exhibit I , to be delivered by the Company to the
Class A Members in respect of the Capital Contributions set
forth in Section 4.1(b)(i) stating that the Company has
spent or committed to spend all previous Capital Contributions by
the Class A Members in accordance with an Approved Budget, and
will spend the Capital Contribution to which the Bring Down
Certificate relates in accordance with an Approved
Budget.
“Budget Rejection
Notice” shall have the meaning set forth in
Section 6.15(b).
“Business Day” means any
day that is not a Saturday, Sunday or other day on which commercial
banks are required or authorized by law to be closed in the State
of Texas or the State of Colorado.
“Capital Account” means,
with respect to any Member, the capital account maintained for such
Member in accordance with the provisions of
Section 4.5.
“Capital Call” means a
call or request for additional capital in writing (which may
include electronic mail) by or on behalf of the Company, specifying
the amount of capital requested to be contributed by each Member
receiving such notice in accordance with the terms of this
Agreement.
“Capital Contribution”
means, with respect to any Member, the aggregate amount of cash and
the initial Gross Asset Value of any property other than cash
contributed to the Company pursuant to Article 4 hereof by
such Member. Any reference in this Agreement to a Capital
Contribution of a Member shall include a Capital Contribution
contributed by its predecessors in interest.
“Certificate” means the
Certificate of Formation of the Company filed on behalf of the
Company with the office of the Secretary of State of the State of
Delaware pursuant to the Act on January 20, 2009, and any and
all amendments thereto and restatements thereof.
“Claims” shall have the
meaning set forth in Section 6.5.
“Class A Interest”
means an Interest in the Company which is classified on
Exhibit B as a Class A Interest and which has the
rights, powers and privileges enjoyed by a Member holding a
Class A Percentage Interest (under the Act, the Certificate,
this Agreement or otherwise) in its capacity as a Member, and all
obligations, duties and liabilities imposed on such a Member (under
the Act, the Certificate, this Agreement or otherwise) in its
capacity as a Member.
“Class A Manager”
shall have the meaning set forth in Section 6.2.
“Class A Member”
means a Member who is designated on Exhibit B as a
Class A Member, in its capacity as a holder of a Class A
Percentage Interest.
“Class A Percentage
Interest” means, with respect to a Class A Member, the
quotient (expressed as a percentage) obtained by dividing such
Class A Member’s Investment Balance by the aggregate
Investment Balances of all Class A Members.
3
“Class B Interest”
means an Interest in the Company which is classified on
Exhibit B as a Class B Interest and which has the
rights, powers and privileges enjoyed by a Member holding a
Class B Percentage Interest (under the Act, the Certificate,
this Agreement or otherwise) in its capacity as a Member, and all
obligations, duties and liabilities imposed on such a Member (under
the Act, the Certificate, this Agreement or otherwise) in its
capacity as a Member.
“Class B Manager”
shall have the meaning set forth in Section 6.2.
“Class B Member”
means a Member who is designated on Exhibit B as a
Class B Member, in its capacity as a holder of a Class B
Percentage Interest.
“Class B Percentage
Interest” means, with respect to a Class B Member, the
quotient (expressed as a percentage) obtained by dividing such
Class B Member’s Investment Balance by the aggregate
Investment Balances of all Class B Members.
“Class B Seller”
shall have the meaning set forth in Section 7.2(b).
“Closing” has the
meaning ascribed to such term in the Contribution
Agreement.
“Code” means the
Internal Revenue Code of 1986, as amended from time to time, or any
corresponding federal tax statute enacted after the date of this
Agreement.
“Company” shall have the
meaning set forth in the preamble.
“Company Minimum Gain”
shall have the meaning assigned to the term “partnership
minimum gain” in Treasury Regulations
Sections 1.704-2(b)(2) and 1.704-2(d).
“Company Nonrecourse
Liability” shall have the meaning assigned to the term
“nonrecourse liability” in Treasury Regulations
Section 1.704-2(b)(3)
** shall have the meaning set forth in
Section 4.9(b).
** shall have the meaning set forth in
Section 4.9(c).
“Confidential
Information” shall mean all information provided or made
available by or on behalf of the Company or its Representatives to
a Member or its Representatives, including all information, data,
reports, interpretations, contract terms and conditions, forecasts
and records containing or otherwise reflecting information
concerning the Company or its Affiliates, potential counterparties
or customers or their Affiliates, potential projects, business
plans or proposals, market or economic data, identities of actual
or potential counterparties or customers, designs, concepts, trade
secrets and other business, operational or technical information
(irrespective of the form of communication of such information) and
together with analyses, compilations, studies or other documents,
whether prepared by or on behalf of a Member or its
Representatives, which contain or otherwise reflect such
information (irrespective of the form of communication of such
information). “Confidential Information” also
includes information of third parties, including such information
as may be subject to any Third Party Confidentiality
Agreements. Notwithstanding the foregoing, Confidential
Information shall not include the following:
(a) information which at the time of disclosure by or on
behalf of the Company is publicly available or which later becomes
publicly available through no act or omission of the disclosing
Member or its Representatives; (b) information which a Member
can demonstrate was in its possession on a non-confidential basis
prior to disclosure by or on behalf of the Company hereunder;
(c) information received by a Member from a third party who is
not prohibited from transmitting the information by a
contractual,
4
legal or fiduciary obligation; or
(d) information which a Member can demonstrate was
independently developed by it or for it and which was not derived
or obtained, in whole or in part, from Confidential Information or
from the Company or its Representatives hereunder.
“Contributing Member”
shall mean a Class A Member who makes a Quarterly Budgeted
Funding Election in accordance with Section 4.1(c).
“Contribution Agreement”
shall have the meaning set forth in the recitals.
“Control,” including the
correlative terms “Controlling,” “Controlled
by” and “Under Common Control with” means
possession, directly or indirectly (through one or more
intermediaries), of the power to direct or cause the direction of
the management or policies (whether through ownership of securities
or any partnership or other ownership interest, by contract or
otherwise) of a Person. For the purposes of this definition,
ownership of more than 50% of the voting interests of any entity
shall be conclusive evidence that Control exists.
“Covered Person” means,
in each case, whether or not a Person continues to have the
applicable status referred to in the following list: a Member; a
Manager; the Operator; any Affiliate of a Member or a Manager or of
the Operator; any officers of the Company, whether or not such
officers are employees of the Company; any officers, directors,
members, managers, stockholders, partners, employees,
representatives or agents of any Manager or Member or of the
Operator, or of any of their respective Affiliates; any employee or
agent of the Company or its Affiliates; and any Tax Matters Member
of the Company.
“CP Index” means the
United States Department of Labor, Bureau of Labor Statistics
Consumer Price Index — All Urban Consumers, U.S. City
Average, Not Seasonally Adjusted, or, if such index is
discontinued, any successor or substitute index, which, in the
Board’s reasonable opinion, is most nearly equivalent to such
index.
“Debt” for any Person
means, without duplication: (a) indebtedness of such Person for borrowed money,
including obligations under letters of credit and agreements
relating to the issuance of letters of credit or acceptance
financing; (b) obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments;
(c) obligations of such Person to pay the deferred purchase
price of property or services (including, without limitation,
obligations that are non-recourse to the credit of such Person but
are secured by the assets of such Person, but excluding trade
accounts payable); (d) obligations of such Person under
capital leases; and (e) obligations of such Person under
guarantees in respect of indebtedness or obligations of others of
the kinds referred to in clauses (a) through (d) above;
provided that “Debt” shall not include
the incurrence of trade debt in the ordinary course of
business.
“Default Rate” means a
per annum rate of interest equal to the lower of ** and the
maximum rate of interest then permitted by law.
“Defaulting Member”
shall have the meaning set forth in Section 4.2.
“Depreciation” means,
for each Fiscal Year or other period, an amount equal to the
depreciation, amortization or other cost recovery deduction
allowable for federal income tax purposes with respect to an asset
for such Fiscal Year or other period and in a manner consistent
with the methodologies employed by MWE or otherwise determined by
the Board; provided , however , that if the Gross
Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such Fiscal Year or other
period, Depreciation for such Fiscal Year or other period shall
equal to the amount of book basis recovered for such Fiscal Year or
other period under the rules prescribed by Treasury Regulation
Section
5
1.704-3(d)(2) and provided
further , that if the federal income tax depreciation,
amortization or other cost recovery deduction for such Fiscal Year
or other period is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable
method selected by the Board.
“Designated MWE
Employees” has the meaning ascribed to such term in the
Services Agreement.
“Economic Risk of Loss”
shall have the meaning assigned to that term in Treasury Regulation
Section 1.752-2(a).
“Effective Time” means
12:01 a.m. on January 1, 2009.
“Election Period” shall
have the meaning set forth in Section 5.7(b).
“Electing Member” shall
have the meaning set forth in Section 5.7(b).
“Eligible Member” shall
have the meaning set forth in Section 5.7(a).
“Enforcement Activities”
shall have the meaning set forth in Section 6.3(a).
“Equalization Date”
shall mean the first date after ** on which the quotient
(expressed as a percentage) obtained by dividing the aggregate
Investment Balances of all members of the MWE Liberty Group by the
aggregate Investment Balances of all members of the MWE Liberty
Group plus all members of the NGPMR Group is equal to or greater
than 60%.
“Equalization Target
Date” shall have the meaning set forth in
Section 4.9(a).
“Escrow Account” shall
have the meaning set forth in Section 10.5.
“Escrow Agent” means
Wells Fargo Bank, N.A.
“Escrow Agreement” means
that certain Escrow Agreement to be entered into among the Company,
NGPMR and the Escrow Agent in substantially the form attached
hereto as Exhibit J .
“Escrow Letter” shall
have the meaning set forth in Section 10.5.
“Exchange Act” means the
Securities Exchange Act of 1934, and the rules and regulations
promulgated thereunder, as amended and any successor statutes
thereto.
“Exempted Project” shall
have the meaning set forth in Section 3.3(b).
“Final Calculations”
shall have the meaning set forth in
Section 4.1(a)(ii).
“Final Cost” shall have
the meaning set forth in Section 4.1(a)(iv).
“First Notice” shall
have the meaning set forth in Section 5.7(b).
“Fiscal Year” means
(i) the period commencing at the Effective Time and ending on
December 31, 2010 and (ii) any subsequent 12 month period
commencing on January 1 and ending on
December 31.
6
“Fractionation and NGL
Purchase Agreement” shall have the meaning set forth in
Section 3.3(b)(ii).
“G&A Services” has
the meaning ascribed to such term in the Services
Agreement.
“GAAP” means generally
accepted accounting principles in the United States.
** means that certain ** by and between
MarkWest Liberty Gas Gathering, L.L.C. and ** .
“Gross Asset Value”
means, with respect to any asset, such asset’s adjusted basis
for federal income tax purposes, except as follows:
(a)
the initial Gross Asset Value of any
asset contributed by a Member to the Company shall be the gross
fair market value of such asset, as agreed to by the contributing
Member and the Board, except that MWE Liberty’s Initial
Capital Contribution shall have the gross asset value determined in
accordance with Section 4.1(a);
(b)
the Gross Asset Value of all Company
assets shall be adjusted to equal their respective gross fair
market values, as determined by the Board, in connection with:
(i) the acquisition of an additional interest in the Company
by any new or existing Member in exchange for more than a
de minimis Capital Contribution or in exchange for the
performance of services to or for the benefit of the Company;
(ii) the distribution by the Company to a Member of more than
a de minimis amount of Company assets as consideration
for an interest in the Company; and (iii) the liquidation of
the Company within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g) (other than pursuant to
Section 708(b)(1)(B) of the Code) or any other event to
the extent determined by the Board to be necessary to properly
reflect the Gross Asset Values in accordance with the standards set
forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(q);
provided , however , that adjustments pursuant to
clause (i) and clause (ii) of this sentence shall be made
only if the Board reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests
of the Members in the Company;
(c)
the Gross Asset Value of any Company
asset distributed to any Member shall be the gross fair market
value of such asset on the date of distribution, as determined by
the Board and the distributee Member; and
(d)
the Gross Asset Values of Company
assets shall be adjusted to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or
Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts
pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m).
If the Gross Asset Value of an asset has been
determined or adjusted pursuant to paragraph (a) or
paragraph (b) above, such Gross Asset Value shall thereafter
be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.
“Incentive Interest
Transaction” shall have the meaning set forth in
Section 5.6.
“Indentures” has the
meaning ascribed to such term in the Contribution
Agreement.
“Indemnitee” shall have
the meaning set forth in Section 12.7.
“Indemnitor” shall have
the meaning set forth in Section 12.7.
7
“Initial Budget” shall
have the meaning set forth in Section 5.5.
“Initial Capital
Contribution” shall have the meaning set forth in
Section 4.1(a)(i).
“Interest” means the
interest of a Member in the Company, including both Class A
Percentage Interests and Class B Percentage Interests,
including rights to distributions (liquidating or otherwise),
allocations, notices and information, rights to approve of or
consent to certain matters (if applicable) and all other rights,
benefits and privileges enjoyed by that Member (under the Act, the
Certificate, this Agreement, or otherwise) in its capacity as a
Member; and all obligations, duties and liabilities imposed on that
Member (under the Act, the Certificate, this Agreement, or
otherwise) in its capacity as a Member.
“Investment Account”
shall have the meaning set forth in Section 4.8.
“Investment Balance”
shall have the meaning set forth in Section 4.8.
“Investment Balance
Costs” shall have the meaning set forth in
Section 4.1(a)(ii).
“IPO Issuer” means
(a) the Company or (b) an Affiliate of the Company which
will be a successor to the Company and the issuer in a Qualified
Public Offering.
“Lien” means, with
respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such
asset.
“Liquidating
Trustee” shall have the meaning set forth in
Section 13.4(a).
“Manager” shall have the
meaning set forth in Section 6.1.
“Member” means any
Person (but not any Affiliate or entity in which such Person has an
equity interest) executing this Agreement and any Person admitted
as an Additional Member or a Substitute Member pursuant to the
provisions of this Agreement, in such Person’s capacity as a
Member of the Company, and “Members” means two or more
of such Persons, in their capacities as Members of the
Company. Such terms do not include any Person or Persons who
have ceased to be Members in the Company.
“Member Nonrecourse
Debt” has the meaning assigned to the term “partner
nonrecourse debt” in Treasury Regulation
Section 1.704-2(b)(4).
“Member Nonrecourse Debt
Minimum Gain” shall have the meaning assigned to the term
“partner nonrecourse debt minimum gain” in Treasury
Regulation Section 1.704-2(i)(2).
“Member Nonrecourse
Deductions” shall have the meaning assigned to the term
“partner nonrecourse deductions” in Treasury Regulation
Section 1.704-2(i)(1).
“Minimum Gain” shall
have the meaning assigned to that term in Treasury Regulation
Section 1.704-2(d).
“Minimum Price” shall
have the meaning set forth in Section 7.2(b)(ii).
“Monthly Reports” shall
have the meaning set forth in Section 10.3(c).
“MWE” means MarkWest
Energy Partners, L.P., a Delaware limited partnership.
8
“MWE Hydrocarbon” shall
have the meaning set forth in the recitals.
“MWE Liberty” shall have
the meaning set forth in the preamble.
“MWE Liberty Group”
means MWE Liberty and each transferee of Interests directly or
indirectly (in the chain of title) from MWE Liberty that is an
Affiliate of MWE Liberty; provided , however , that
once a Person is designated as a member of the MWE Liberty Group
such Person shall, as long as it owns any Interests, at all times
be a member of the MWE Liberty Group and not a member of any other
Affiliated Member Group; provided further, that for purposes of
this definition, an Affiliate shall not include a member of any
other Affiliated Member Group.
“New Interests” shall
have the meaning set forth in Section 5.7(a).
“NGPMR” shall have the
meaning set forth in the preamble.
“NGPMR Covered Persons”
has the meaning ascribed to such term in the Contribution
Agreement.
“NGPMR Exit Transaction”
means ** involving the Company in which ** in which
the ** prior to the ** of the Company ** or a
** of the Company ** . For the avoidance of
doubt, any **
“NGPMR Group” means
NGPMR and each transferee of Interests directly or indirectly (in
chain of title) from NGPMR that is an Affiliate of NGPMR;
provided , however , that once a Person is designated
as a member of the NGPMR Group such Person shall, as long as it
owns any Interests, at all times be a member of the NGPMR Group and
not a member of any other Affiliated Member Group, and, provided
further, that for purposes of this definition, an Affiliate shall
not include a member of any other Affiliated Member
Group.
“NGPMR Portfolio
Companies” shall have the meaning set forth in
Section 3.3(c).
“NGPMR Representatives”
shall mean the members, managers and employees of NGPMR or any
Affiliate thereof, together with all other persons serving as
representatives of NGPMR, including those Persons who are serving
as Managers at the request of NGPMR pursuant to this
Agreement.
“Non-Contributing
Member” shall mean a Class A Member who does not elect
to make a Quarterly Budgeted Funding Election in accordance with
Section 4.1(c).
“Nonrecourse Deductions”
shall have the meaning assigned to that term in Treasury Regulation
Section 1.704-2(b).
“Objection Notice” shall
have the meaning set forth in Section 4.1(a)(iii).
“Operator” means the
Person designated as the “Operator” of the Company in
accordance with Section 6.11.
“Original Agreement”
shall have the meaning set forth in the recitals.
“Out of Scope Project”
means any project, activity, or business venture (a) outside
the Area of Mutual Interest or (b) not within the scope of the
Primary Business of the Company (whether inside or outside the Area
of Mutual Interest).
“Over-Allotment Amount”
shall have the meaning set forth in Section 5.7(b).
9
“Overfunded Capital”
means, as of any determination date, the difference (expressed as a
dollar amount) between ** .
“Partial NGPMR Exit
Transaction” means ** after which the ** in the
** after which the **
“Percentage Interest”
means:
(a)
at any time prior to the earlier to
occur of the Equalization Date and ** :
(i)
with respect to a Class A
Member, the product (expressed as a percentage) of (1) 40% and
(2) such Member’s Class A Percentage Interest;
and
(ii)
with respect to a Class B
Member, the product (expressed as a percentage) of (1) 60% and
(2) such Member’s Class B Percentage
Interest.
(b)
at any time on or after the earlier
to occur of the Equalization Date and ** , with respect to
any Member (including any Class A Member or Class
