UNDERWRITING AGREEMENTUnderwriting Agreement |
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MARKWEST ENERGY PARTNERS, L.P. | RBC CAPITAL MARKETS CORPORATION | A.G. EDWARDS & SONS, INC. | WACHOVIA CAPITAL MARKETS, LLC | KEYBANK CAPITAL MARKETS | STIFEL, NICOLAUS & COMPANY, INCORPORATED. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 1.1 MARKWEST ENERGY PARTNERS, L.P. 2,157,395 Common Units September 15, 2004 RBC CAPITAL MARKETS
CORPORATION The undersigned, MarkWest Energy Partners, L.P., a Delaware limited partnership (the " Partnership "), MarkWest Energy Operating Company, L.L.C., a Delaware limited liability company (the " Operating Company "), MarkWest Energy GP, L.L.C., a Delaware limited liability company (the " General Partner "), and the selling unitholders listed on Schedule II hereto (the " Selling Unitholders "), hereby address you as the " Underwriters " and hereby confirm their agreement with the several Underwriters set forth in Schedule I hereto. The Partnership, the Operating Company and the General Partner are collectively referred to herein as the " MarkWest Parties ." The Partnership conducts its business through the Operating Company. The Operating Company conducts its business through the Operating Subs (as hereinafter defined). Basin Pipeline L.L.C., a Michigan limited liability company (" Basin LLC "), West Shore Processing Company, L.L.C., a Michigan limited liability company (" West Shore LLC "), MarkWest Energy Appalachia, L.L.C., a Delaware limited liability company (" MarkWest Appalachia LLC "), MarkWest Texas GP, L.L.C., a Delaware limited liability company (" Texas GP "), MW Texas Limited, L.L.C., a Delaware limited liability company (" Texas Limited "), MarkWest Michigan Pipeline Company, L.L.C., a Michigan limited liability company (" Michigan Pipeline LLC "), MarkWest Western Oklahoma Gas Company, L.L.C., an Oklahoma limited liability company (" Western Oklahoma LLC "), MarkWest Power Tex L.P., a Texas limited partnership (" Power Tex LP "), MarkWest Pinnacle L.P., a Texas limited partnership (" Pinnacle LP "), MarkWest PNG Utility L.P., a Texas limited partnership (" PNG LP "), MarkWest Texas PNG Utility L.P., a Texas limited partnership (" Utility LP "), MarkWest Blackhawk L.P., a Texas limited partnership (" Blackhawk LP "), MarkWest New Mexico L.P., a Texas limited partnership (" New Mexico LP "), and MarkWest Energy East Texas Gas Company L.P., a Delaware limited partnership (" East Texas LP" ), are collectively referred to as the " Operating Subs ." The Partnership, the Operating Company and the Operating Subs are collectively referred to as the " Partnership Entities ." The General Partner and the Partnership Entities are collectively referred to as the " MarkWest Entities ." 1. Description of Common Units . The Partnership and the Selling Unitholders propose to sell to the Underwriters an aggregate of 2,157,395 Common Units (the " Firm Units ") representing limited partner interests in the Partnership (the " Common Units "). The Firm Units consist of 2,000,000 Common Units to be issued and sold by the Partnership, and 157,395 Common Units to be sold by the Selling Unitholders. Solely for the purpose of covering over-allotments in the sale of the Firm Units, the Partnership further proposes to grant to the Underwriters the right to purchase up to an additional 323,609 Common Units (the " Option Units "), as provided in Section 3 of this Agreement. The Firm Units and the Option Units are herein sometimes referred to as the " Units " and are more fully described in the Prospectus hereinafter defined. 2. Purchase, Sale and Delivery of Firm Units . On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Partnership agrees to sell 2,000,000 Firm Units and each Selling Unitholder agrees severally and not jointly, to sell the number of Firm Units opposite his or her or its name on Schedule II hereto to the Underwriters, and each such Underwriter agrees, severally and not jointly, (a) to purchase from the Partnership and the Selling Unitholders, at a purchase price of $41.35 per unit, the number of Firm Units set forth opposite the name of such Underwriter in Schedule I hereto and (b) to purchase from the Partnership any additional number of Option Units which such Underwriter may become obligated to purchase pursuant to Section 3 hereof. Delivery of the Firm Units will be in book-entry form through the facilities of The Depository Trust Company, New York, New York (" DTC "). Delivery of the documents required by Section 8 hereof with respect to the Units shall be made at or prior to 9:00 a.m. on September 21, 2004 at Vinson & Elkins L.L.P., 2300 First City Tower, 1001 Fannin, Houston, Texas 77002-6760 or at such other place as may be agreed upon between you, the Partnership and the Selling Unitholders (the " Place of Closing "), or at such other time and date not later than five full business days thereafter as you and the Partnership may agree, such time and date of payment and delivery being herein called the " Closing Date ." The Partnership and the Custodian (as hereinafter defined) will deliver the Firm Units to the Underwriters, against payment of the purchase price therefor in Federal (same day) Funds by wire transfer to an account at the bank specified by the Partnership in the case of the Units being sold by the Partnership, or by the Custodian, in the case of the Units being sold by the Selling Unitholders. The Partnership will cause its transfer agent to deposit the Firm Units being sold by the Partnership hereunder pursuant to the Full Fast Delivery Program of the DTC. The Custodian will cause its transfer agent to deposit the Firm Units to be sold by the Selling Unitholders hereunder pursuant to the Full Fast Delivery Program of the DTC. It is understood that an Underwriter, individually, may (but shall not be obligated to) make payment on behalf of the other Underwriters whose funds shall not have been received prior to the Closing Date for Units to be purchased by such Underwriter. Any such payment by an Underwriter shall not relieve the other Underwriters of any of their obligations hereunder. It is understood that the Underwriters propose to offer the Units to the public upon the terms and conditions set forth in the Registration Statement hereinafter defined. 3. Purchase, Sale and Delivery of the Option Units . The Partnership hereby grants an option to the Underwriters to purchase from the Partnership up to 323,609 Option Units, on the same terms and conditions as the Firm Units; provided, however, that such option may be exercised only for the purpose of covering any over-allotments that may be made by the Underwriters in the sale of the Firm Units. No Option Units shall be sold or delivered unless the Firm Units previously have been, or simultaneously are, sold and delivered. The option is exercisable by you at any time, and from time to time, before the expiration of 30 days from the date of the Prospectus (as defined herein) (or, if such 30th day shall be a Saturday or Sunday or a holiday, on the next day following when the American Stock Exchange is open for trading), for the purchase of all or part of the Option Units covered thereby, by notice given by you to the Partnership in the manner provided in Section 14 hereof, setting forth the number of Option Units as to which the Underwriters are exercising the option, and the date of delivery of said Option Units, which date shall not be more than five business days after such notice unless otherwise agreed to by the parties. You may terminate the option at any time, as to any unexercised portion thereof, by giving written notice to the Partnership to such effect. 2 You shall make such allocation of the Option Units among the Underwriters as may be required to eliminate purchases of fractional Units. Delivery of the Option Units will be in book-entry form through the facilities of DTC. Delivery of the documents required by Section 8 hereof with respect to the Units shall be made at the Place of Closing at or prior to 9:00 a.m. on the date designated in the notice given by you as provided above, or at such other time and date as you and the Partnership may agree (which may be the same as the Closing Date), such time and date of payment and delivery being herein called the " Option Closing Date ." On the Option Closing Date, the Partnership shall provide the Underwriters such representations, warranties, agreements, opinions, letters, certificates and covenants with respect to the Option Units as are required to be delivered on the Closing Date with respect to the Firm Units. The Partnership will cause its transfer agent to deposit as original issue the Option Units pursuant to the Full Fast Delivery Program of the DTC. 4. Representations, Warranties and Agreements of the MarkWest Parties . The MarkWest Parties jointly and severally represent and warrant to and agree with each Underwriter that: (a) Definitions. The Partnership has prepared a registration statement (Registration No. 333-116680) on Form S-3, including a prospectus, pursuant to and in conformity with the requirements of the Securities Act of 1933, as amended (the " 1933 Act "), and the rules and regulations thereunder (the " 1933 Act Rules and Regulations ") of the Securities and Exchange Commission (the " SEC ") and the registration statement has been filed and declared effective by the SEC under the 1933 Act. The Partnership has filed with, or transmitted for filing to, or shall promptly hereafter file with or transmit for filing to the SEC a prospectus supplement (the " Prospectus Supplement ") specifically relating to the Units pursuant to Rule 424 of the 1933 Act Rules and Regulations. The term " Registration Statement " as used herein means the registration statement as amended at the date of this Underwriting Agreement, including financial statements and all exhibits and, if applicable, the information deemed to be included by Rule 430A of the 1933 Act Rules and Regulations. If it is contemplated, at the time this Agreement is executed, that a post-effective amendment to such registration statement will be filed and must be declared effective before the offering of Units may commence, the term " Registration Statement " as used herein means the registration statement as amended by said post-effective amendment. The term " Basic Prospectus " means the prospectus included in the Registration Statement. The term " Prospectus " as used herein means the Basic Prospectus together with the Prospectus Supplement dated September 16, 2004. The term " Preliminary Prospectus " as used herein shall mean the preliminary prospectus supplement, dated September 13, 2004, relating to the Units together with the Basic Prospectus. As used herein, the terms "Registration Statement," "Basic Prospectus," "Prospectus" and "Preliminary Prospectus" shall include in each case the documents, if any, incorporated by reference therein (the " Incorporated Documents "). The terms "supplement," "amendment" and "amend" as used herein shall include the filing of all documents deemed to be incorporated by reference in the Prospectus that are filed subsequent to the date of the Underwriting Agreement by the Partnership with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the " 1934 Act "). The term " Effective Date " means the date and time the Registration Statement became effective under the 1933 Act. (b) No Stop Order; No Material Misstatements or Omissions. Neither the SEC nor any state or other jurisdiction or other regulatory body has issued, and neither is, to the knowledge of the MarkWest Parties, threatening to issue, any stop order under the 1933 Act or other order suspending the effectiveness of the Registration Statement (as amended or supplemented) or preventing or suspending the use of the Preliminary Prospectus or the Prospectus or suspending the qualification or registration of the Units for offering or sale in any jurisdiction nor instituted or, to the knowledge of the MarkWest Parties, threatened to institute proceedings for any such 3 purpose. The Registration Statement, in the form in which it became effective and also in such form as it may be when any post-effective amendment thereto becomes effective, and the Prospectus and any amendment or supplement thereto, when filed with the SEC under Rule 424(b) of the 1933 Act Rules and Regulations, comply or will comply, as the case may be, in all material respects with the requirements of the 1933 Act and the 1933 Act Rules and Regulations. Neither the Registration Statement nor any amendment thereto, as of the applicable effective date, contains or will contain, as the case may be, any untrue statement of a material fact or omits or will omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and neither the Preliminary Prospectus, the Prospectus nor any amendment or supplement thereto contains or will contain, as the case may be, any untrue statement of a material fact or omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however , that the Partnership makes no representation or warranty as to information contained in or omitted from the Registration Statement, the Preliminary Prospectus or the Prospectus, or any such amendment or supplement, in reliance upon, and in conformity with, written information furnished to the Partnership relating to the Underwriters by or on behalf of the Underwriters expressly for use in the preparation thereof (as provided in Section 15 hereof) or written information furnished to the Partnership relating to the Selling Unitholders by or on behalf of the Selling Unitholders expressly for use in the preparation thereof (as provided in Section 15 hereof). Each of the statements made by the Partnership in such documents within the coverage of Rule 175(b) of the 1933 Act Rules and Regulations, including (but not limited to) any statements with respect to future available cash or future cash distributions of the Partnership or the anticipated ratio of taxable income to distributions, was made or will be made with a reasonable basis and in good faith. The Incorporated Documents heretofore filed with the SEC, when they were filed, conformed in all material respects to the requirements of the 1934 Act and the rules and regulations of the SEC thereunder and did not, as of the time each such document was filed, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Any further Incorporated Documents so filed will, when they are filed, conform in all material respects to the requirements of the 1934 Act and the rules and regulations of the SEC thereunder and will not, as of the time each such document is filed, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (c) Formation and Due Qualification of the Partnership. Each of the Partnership and East Texas LP has been duly formed and is validly existing in good standing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act (" Delaware LP Act ") with full partnership power and authority to own or lease its properties and to conduct its business in all material respects as described in the Registration Statement and the Prospectus. Each of the Partnership and East Texas LP is duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such registration or qualification necessary, except where the failure so to register or qualify would not, individually or in the aggregate, (i) have a material adverse effect on the business, prospects, financial condition or results of operations of the Partnership Entities, taken as a whole (" Material Adverse Effect "), or (ii) subject the limited partners of the Partnership to any material liability or disability. (d) Formation and Due Qualification of Limited Liability Companies . Each of the General Partner, the Operating Company, MarkWest Appalachia LLC, Texas GP and Texas Limited has been duly formed and is validly existing in good standing as a limited liability company under the Delaware Limited Liability Company Act (the " Delaware LLC Act "), each of West Shore LLC, 4 Basin LLC and Michigan Pipeline LLC has been duly formed and is validly existing and in good standing as a limited liability company under the Michigan Limited Liability Company Act (the " Michigan LLC Act "), and Western Oklahoma LLC has been duly formed and is validly existing and in good standing as a limited liability company under the Oklahoma Limited Liability Company Act (the " Oklahoma LLC Act "), in each case with full limited liability company power and authority to own or lease its properties and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus. The General Partner has all necessary limited liability company power and authority to act as general partner of the Partnership. Texas GP has all necessary limited liability company power and authority to act as general partner of each of Power Tex LP, Pinnacle LP, PNG LP, Utility LP, Blackhawk LP and New Mexico LP (collectively, the " LP Operating Subs ") and East Texas LP. Each of the General Partner, the Operating Company, MarkWest Appalachia LLC, Texas GP, Texas Limited, West Shore LLC, Basin LLC, Michigan Pipeline LLC and Western Oklahoma LLC is duly registered or qualified as a foreign limited liability company for the transaction of business under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such registration or qualification necessary, except where the failure so to register or qualify would not, individually or in the aggregate, (i) have a Material Adverse Effect or (ii) subject the limited partners of the Partnership to any material liability or disability. (e) Formation and Due Qualification of the LP Operating Subs . Each of the LP Operating Subs has been duly formed and is validly existing in good standing as a limited partnership under the Texas Revised Limited Partnership Act (the " Texas LP Act ") with full partnership power and authority to own or lease its properties and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus. Each of the LP Operating Subs is duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such registration or qualification necessary, except where the failure so to register or qualify would not, individually or in the aggregate, (i) have a Material Adverse Effect or (ii) subject the limited partners of the Partnership to any material liability or disability. (f) Ownership of the General Partner Interest in the Partnership . The General Partner is the sole general partner of the Partnership with a 2% general partner interest in the Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Amended and Restated Agreement of Limited Partnership of the Partnership (as the same has been and may be amended or restated at or prior to the Closing Date, the " Partnership Agreement "); and the General Partner owns such general partner interest free and clear of all liens, encumbrances, security interests, equities, charges or claims. (g) Capitalization . The issued and outstanding limited partner interests of the Partnership consist of 5,314,338 Common Units, 3,000,000 subordinated units (" Subordinated Units ") representing subordinated limited partnership interests in the Partnership and the incentive distribution rights (the " Incentive Distribution Rights "), as defined in the Partnership Agreement. All outstanding Common Units, including the Firm Units to be sold by the Selling Unitholders hereunder, Subordinated Units and Incentive Distribution Rights and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Section 17-607 of the Delaware LP Act and as otherwise described in the Prospectus). (h) Ownership of the Subordinated Units and the Incentive Distribution Rights . (i) MarkWest Hydrocarbon, Inc., a Delaware corporation (" MarkWest ") owns 2,469,496 Subordinated Units, 5 (ii) current and former officers, directors and key employees of MarkWest and the General Partner (collectively, the " Management Group ") collectively own 30,504 Subordinated Units as described in the Prospectus, (iii) Tortoise MWEP, L.P. owns 500,000 Subordinated Units and (iv) the General Partner owns all of the Incentive Distribution Rights, in each case free and clear of all liens, encumbrances (except with respect to the Incentive Distribution Rights, restrictions on transferability as described in the Prospectus), security interests, equities, charges or claims (except for such pledges as may be entered into by the Management Group or Tortoise MWEP, L.P.). (i) Valid Issuance of the Units . At the Closing Date or the Option Closing Date, as the case may be, the Firm Units to be sold by the Partnership or the Option Units, as the case may be, and the limited partner interests represented thereby, will be duly authorized in accordance with the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Section 17-607 of the Delaware LP Act). (j) Ownership of the Membership Interests in the Operating Company . The Partnership owns 100% of the issued and outstanding membership interests in the Operating Company; such membership interests have been duly authorized and validly issued in accordance with the limited liability company agreement of the Operating Company (as the same may be amended or restated at or prior to the Closing Date, the " Operating Company LLC Agreement ") and are fully paid (to the extent required under the Operating Company LLC Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and, the Partnership owns its membership interests free and clear of all liens, encumbrances, security interests, equities, charges or claims, except as may arise under the Second Amended and Restated Credit Agreement, dated as of July 30, 2004 (the " Bank Credit Agreement "), among the Operating Company, Royal Bank of Canada, as administrative agent, and the other parties named therein, or as described in the Prospectus. (k) Ownership of the LLC Operating Subs. The Operating Company owns 100% of the issued and outstanding membership interests in each of MarkWest Appalachia LLC, Texas GP, Texas Limited, West Shore LLC, Basin LLC, Michigan Pipeline LLC and Western Oklahoma LLC (collectively, the " LLC Operating Subs "); such membership interests have been duly authorized and validly issued in accordance with the limited liability company agreements of the LLC Operating Subs (as the same may be amended or restated at or prior to the Closing Date, the " Operating Subs LLC Agreements ") and are fully paid (to the extent required under the Operating Subs LLC Agreements) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act, Sections 2033 and 2035 of the Oklahoma LLC Act or Section 450.4308 of the Michigan LLC Act); and the Operating Company owns such membership interests free and clear of all liens, encumbrances, security interests, equities, charges or claims, except as may arise under the Bank Credit Agreement or described in the Prospectus. (l) Ownership of the Partnership Interests in the LP Operating Subs. Texas GP is the sole general partner of each of the LP Operating Subs and East Texas LP with a 0.001% general partner interest in each of the LP Operating Subs and East Texas LP; each such general partner interest has been duly authorized and validly issued in accordance with the partnership agreements of the LP Operating Subs and East Texas LP (as the same may be amended or restated at or prior to the Closing Date, the " Operating Subs Partnership Agreements "); Texas GP owns each such general partner interest free and clear of all liens, encumbrances, security interests, equities, charges or claims, except for such liens, encumbrances, security interests, equities, charges and claims arising under the Bank Credit Agreement; Texas Limited is the sole limited partner of each of the LP Operating Subs and East Texas LP with a 99.999% limited partner interest in each of the LP Operating Subs and East Texas LP; each such limited partner interest has been duly 6 authorized and validly issued in accordance with the Operating Subs Partnership Agreements and will be fully paid (to the extent required under the Operating Subs Partnership Agreements) and nonassessable (except as such nonassessability may be affected by Sections 3.03, 5.02 and 6.07 of the Texas LP Act and Section 17-607 of the Delaware LP Act); and Texas Limited owns each such limited partner interest free and clear of all liens, encumbrances, security interests, equities, charges or claims, except for such liens, encumbrances, security interests, equities, charges and claims arising under the Bank Credit Agreement. (m) Ownership of the General Partner . MarkWest owns 90.2% of the issued and outstanding membership interests in the General Partner and the Management Group owns collectively 9.8% of the issued and outstanding membership interests in the General Partner as described in the Prospectus; such membership interests are duly authorized and validly issued in accordance with the General Partner's limited liability company agreement (as the same may be amended or restated at or prior to the Closing Date, the " General Partner LLC Agreement ") and are fully paid (to the extent required under the General Partner LLC Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and MarkWest and the Management Group own such membership interests free and clear of all liens, encumbrances, security interests, equities, charges or claims, except for such pledges as may be entered into by the Management Group. (n) No Other Subsidiaries . Other than the Partnership's ownership of its membership interest in the Operating Company, the Operating Company's ownership of its membership interest in the LLC Operating Subs and Texas GP's and Texas Limited's ownership of the partnership interests in the LP Operating Subs and East Texas LP, neither the Partnership nor the Operating Company own, and at the Closing Date and the Option Closing Date, neither will own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity. Other than its ownership of its partnership interests in the Partnership, the General Partner does not own, and at the Closing Date and the Option Closing Date will not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity. (o) No Preemptive Rights, Registration Rights or Options . Except as described in the Prospectus or in the organizational documents of the MarkWest Entities other than the General Partner, there are no preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any partnership or member interests of the Partnership Entities, in each case pursuant to the partnership agreement or limited liability company agreement of such entity or the certificates of limited partnership or formation and other organizational documents or any other agreement or instrument to which any of such entities is a party or by which any one of them may be bound. Neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of any Units or other securities of the Partnership, other than the Units to be sold hereunder by the Selling Unitholders and other than as have been waived or deemed waived. Except as described in the Prospectus, there are no outstanding options or warrants to purchase any partnership or member interests in any Partnership Entity. (p) Authority and Authorization . The Partnership has all requisite power and authority to issue, sell and deliver the Units to be sold by it hereunder, in accordance with and upon the terms and conditions set forth in this Agreement, the Partnership Agreement and the Registration Statement and the Prospectus. At the Closing Date and the Option Closing Date, all partnership and limited liability company action, as the case may be, required to be taken by the MarkWest Parties or the Operating Subs or any of their members or partners for the authorization, issuance, sale and delivery of the Units to be sold by the Partnership hereunder and the consummation of the transactions contemplated by this Agreement, shall have been validly taken. 7 (q) Enforceability of the Underwriting Agreement . This Agreement has been duly authorized, validly executed and delivered by each of the MarkWest Parties, and constitutes the valid and legally binding agreement of each of the MarkWest Parties, enforceable against each of them in accordance with its terms; provided that the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); provided, further, that the indemnity and contribution provisions hereunder may be limited by applicable laws, general principles of equity and public policy. (r) Enforceability of Other Agreements . At or before the Closing Date: (i) The Partnership Agreement has been duly authorized, executed and delivered by the General Partner and is a valid and legally binding agreement of the General Partner, enforceable against the General Partner in accordance with its terms; (ii) The Operating Company LLC Agreement has been duly authorized, executed and delivered by the Partnership and is a valid and legally binding agreement of the Partnership, enforceable against it in accordance with its terms; (iii) The General Partner LLC Agreement has been duly authorized, executed and delivered by MarkWest and is a valid and legally binding agreement of MarkWest, enforceable against it in accordance with its terms; (iv) Each of the Operating Subs LLC Agreements has been duly authorized, executed and delivered by the Operating Company and is a valid and legally binding agreement of the Operating Company, enforceable against it in accordance with its terms; (v) Each of the Operating Subs Partnership Agreements has been duly authorized, executed and delivered by Texas GP and Texas Limited and is a valid and binding agreement of Texas GP and Texas Limited, enforceable against Texas GP and Texas Limited in accordance with its terms; and (vi) The Bank Credit Agreement has been duly authorized, executed and delivered by the Operating Company and the Partnership and is a valid and binding agreement of the Operating Company and the Partnership, enforceable against the Operating Company and the Partnership in accordance with the terms; provided that, with respect to each agreement described in this Section 4(r), the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and, provided, further, that the indemnity, contribution and exoneration provisions contained in any of such agreements may be limited by applicable laws and public policy. The Partnership Agreement, the Operating Company LLC Agreement, the General Partner LLC Agreement, the Operating Subs LLC Agreements, the Operating Subs Partnership Agreements and the Bank Credit Agreement are herein collectively referred to as the " Operative Agreements ." (s) No Conflicts . None of the offering, issuance and sale by the Partnership of the Units to be sold by it hereunder, the execution, delivery and performance of this Agreement by the MarkWest Parties, or the consummation by the MarkWest Parties of the transactions contemplated hereby (i) conflicts or will conflict with or constitutes or will constitute a violation of the agreement of limited partnership, limited liability company agreement or other organizational documents of the MarkWest Entities, (ii) conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute 8 such a default) under any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the MarkWest Entities is a party or by which any of them or any of their respective properties may be bound, (iii) violates or will violate any statute, law or regulation or any order, judgment, decree or injunction of any court or governmental agency or body directed to any of the MarkWest Entities or any of their properties in a proceeding to which any of them or their property is a party or (iv) results or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any of the MarkWest Entities, which conflicts, breaches, violations, defaults, liens, changes or encumbrances, in the case of clauses (ii), (iii) or (iv), would, individually or in the aggregate, have a Material Adverse Effect. (t) No Consents . No permit, consent, approval, authorization, order, registration, filing or qualification (" consent ") of or with any court, governmental agency or body having jurisdiction over the MarkWest Entities or any of their respective properties is required for the offering, issuance and sale by the Partnership of the Units to be sold by it hereunder in connection with the execution, delivery and performance of this Agreement by the MarkWest Parties or the consummation by the MarkWest Parties of the transactions contemplated by this Agreement, except (i) for such consents required under the 1933 Act, the 1934 Act and state securities or "Blue Sky" laws, (ii) for such consents which have been, or prior to the Closing Date will be, obtained and (iii) for such consents which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect. (u) No Default . None of the MarkWest Entities is in (i) violation of its certificate or agreement of limited partnership, limited liability company agreement or other organizational documents, (ii) violation of any law, statute, ordinance, administrative or governmental rule or regulation applicable to it or of any order, judgment, decree or injunction of any court or governmental agency or body having jurisdiction over it or (iii) breach, default (or an event which, with notice or lapse of time or both, would constitute such a default) or violation in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which it is a party or by which it or any of its properties may be bound, which breach, default or violation in the case of clause (ii) or (iii) would, if continued, have a Material Adverse Effect or could materially impair the ability of any of the MarkWest Parties to perform their obligations under this Agreement or the Operative Agreements. To the knowledge of the MarkWest Parties, no third party to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which any of the MarkWest Entities is a party or by which any of them is bound or to which any of their properties is subject, is in default under any such agreement, which breach, default or violation would, if continued, have a Material Adverse Effect. (v) Conformity of Securities to Descriptions in the Prospectus . The Units, when issued and delivered against payment therefor as provided herein, and the Subordinated Units and the Incentive Distribution Rights will conform in all material respects to the descriptions thereof contained in the Prospectus. (w) Independent Public Accountants . The accountants, PricewaterhouseCoopers LLP, who have certified certain audited financial statements included in the Registration Statement and the Prospectus (or any amendment or supplement thereto), are independent public accountants with respect to the Partnership and the General Partner as required by the 1933 Act and the 1933 Act Rules and Regulations. The accountants, BKD, LLP, who have certified or shall certify certain audited financial statements included in the Registration Statement and the Prospectus (or any amendment or supplement thereto), are independent public accountants with respect to the Partnership and the General Partner as required by the 1933 Act and the 1933 Act Rules and Regulations. The accountants, KPMG LLP, are independent public accountants with respect to the 9 Partnership and the General Partner as required by the 1933 Act and the 1933 Act Rules and Regulations (x) Financial Statements . At June 30, 2004, the Partnership would have had, on the consolidated pro forma basis indicated in the Prospectus (and any amendment or supplement thereto), a capitalization as set forth therein. The historical financial statements (including the related notes and supporting schedules) included in the Registration Statement and the Prospectus (and any amendment or supplement thereto) present fairly in all material respects the financial position, results of operations and cash flows of the entities purported to be shown thereby on the basis stated therein at the respective dates or for the respective periods to which they apply and have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except to the extent disclosed therein. The summary historical and pro forma financial information set forth in the Prospectus (and any amendment or supplement thereto) under the caption "Summary Historical and Pro Forma Financial and Operating Data" is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical consolidated financial statements and pro forma financial statements, as applicable, from which it has been derived. The pro forma financial statements of the Partnership included in the Registration Statement and the Prospectus (and any amendment or supplement thereto) have been prepared in all material respects in accordance with the applicable accounting requirements of Article 11 of Regulation S-X of the Commission; the assumptions used in the preparation of such pro forma financial statements are, in the opinion of the management of the General Partner, reasonable; and the pro forma adjustments reflected in such pro forma financial statements have been properly applied to the historical amounts in compilation of such pro forma financial statements. (y) No Material Adverse Change . Except as disclosed in the Prospectus, none of the MarkWest Entities has sustained since the date of the latest audited financial statements included in the Registration Statement and the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, investigation, order or decree, otherwise than as set forth or contemplated in the Registration Statement and the Prospectus. Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement thereto), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), (i) none of the MarkWest Entities has incurred any liability or obligation, indirect, direct or contingent, or entered into any transactions, not in the ordinary course of business, that, individually or in the aggregate, is material to the Partnership Entities, taken as a whole, (ii) there has not been any material change in the capitalization, or material increase in the short-term debt or long-term debt, of the MarkWest Entities, taken as a whole and (iii) there has not been any material adverse change, or any development involving or which may reasonably be expected to involve, individually or in the aggregate, a prospective material adverse change in or affecting the business, prospects, properties, management, condition (financial or other), partners' capital, net worth or results of operations of the Partnership Entities, taken as a whole. (z) Legal Proceedings or Contracts to be Described or Filed . There are no legal or governmental proceedings pending or, to the knowledge of the MarkWest Parties, threatened, against any of the MarkWest Entities, or to which any of the MarkWest Entities is a party, or to which any of their respective properties is subject, that are required to be described in the Registration Statement or the Prospectus but are not described as required, and there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required by the 1933 Act Rules and Regulations. 10 (aa) Title to Properties . The Partnership Entities have good and indefeasible title to all real property and good title to all personal property described in the Prospectus as owned by the MarkWest Entities, free and clear of all liens, claims, security interests, or other encumbrances, except such as (i) do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Partnership Entities, (ii) could not reasonably be expected to have a Material Adverse Effect or (iii) are described, and subject to the limitations contained, in the Prospectus. (bb) Rights-of-Way . Each of the Partnership Entities has such consents, easements, rights-of-way, permits or licenses from each person (collectively, " rights-of-way ") as are necessary to conduct its business in the manner described, and subject to the limitations contained, in the Prospectus, except for (i) qualifications, reservations and encumbrances that would not have a Material Adverse Effect and (ii) such rights-of-way that, if not obtained, would not have, individually or in the aggregate, a Material Adverse Effect; other than as set forth, and subject to the limitations contained, in the Prospectus, each of the Partnership Entities has fulfilled and performed all its material obligations with respect to such rights-of-way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such rights-of-way, except for such revocations, terminations and impairments that would not have a Material Adverse Effect; and, except as described in the Prospectus, none of such rights-of-way contains any restriction that is materially burdensome to the Partnership Entities, taken as a whole. (cc) Permits . Each of the Partnership Entities has, or at the Closing Date will have, such permits, consents, licenses, franchises, certificates and authorizations of governmental or regulatory authorities (" permits ") as are necessary to own its properties and to conduct its business in the manner described in the Prospectus, subject to such qualifications as may be set forth in the Registration Statement and the Prospectus and except for such permits that, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect and except for any permits that are of a routine or administrative nature that are expected in the reasonable judgment of the General Partner to be obtained, as necessary, in the ordinary course of business subsequent to the date hereof; each of the Partnership Entities has fulfilled and performed all its material obligations with respect to such permits which are due to have been fulfilled and performed by such date in the manner described, and subject to the limitations contained, in the Prospectus and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any impairment of the rights of the holder of any such permit, except for such revocations, terminations and impairments that would not, individually or in the aggregate, have a Material Adverse Effect; and, except as described in the Registration Statement and the Prospectus, none of such permits contains any restriction that is materially burdensome to the Partnership Entities, taken as a whole. (dd) Books and Records . The Partnership (i) makes and keeps books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets and (ii) maintains systems of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management's general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (ee) Tax Returns . Each of the MarkWest Entities has filed (or has obtained extensions with respect to) all material federal, state and foreign income and franchise tax returns required to be 11 filed through the date hereof, which returns are complete and correct in all material respects, and has timely paid all taxes shown to be due, if any, pursuant to such returns, other than those (i) which are being contested in good faith and for which adequate reserves have been established in accordance with generally accepted accounting principles or (ii) which, if not paid, would not have a Material Adverse Effect. (ff) Investment Company/Public Utility Holding Company . None of the MarkWest Entities is now, and after sale of the Units to be sold by the Partnership hereunder and application of the net proceeds from such sale as described in the Prospectus under the caption "Use of Proceeds," none of the MarkWest Entities will be, (i) an "investment company" or a company "controlled by" an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or (ii) a "public utility company," "holding company" or a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. (gg) Environmental Compliance . Except as described in the Prospectus, the Partnership Entities (i) are in compliance with any and all applicable federal, state and local laws and regulations relating to the protection of human health and safety and the environment or imposing liability or standards of conduct concerning any Hazardous Material (as hereinafter defined) (" Environmental Laws "), (ii) have received all permits required of them under applicable Environmental Laws to conduct their respective businesses, (iii) are in compliance with all terms and conditions of any such permit and (iv) do not have any liability in connection with the release into the environment of any Hazardous Materials (as defined below), except where such noncompliance with Environmental Laws, failure to receive required permits, or failure to comply with the terms and conditions of such permits or liability in connection with such releases would not, individually or in the aggregate, have a Material Adverse Effect. The term " Hazardous Material " means (A) any "hazardous substance" as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (B) any "hazardous waste" as defined in the Resource Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law. (hh) No Labor Dispute . No labor dispute with the employees of the MarkWest Entities exists or, to the knowledge of the MarkWest Parties, is imminent or threatened that is reasonably likely to result in a Material Adverse Effect. (ii) Insurance . The MarkWest Entities maintain insurance covering the properties, operations, personnel and businesses of the Partnership Entities against such losses and risks as are reasonably adequate to protect them and their businesses in a manner consistent with other businesses similarly situated. None of the MarkWest Entities has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force on the date hereof and will be outstanding and duly in force on the Closing Date. (jj) Litigation . Except as described in the Prospectus, there is (i) no action, suit or proceeding before or by any court, arbitrator or governmental agency, body or official, domestic or foreign, now pending or, to the knowledge of the MarkWest Parties, threatened, to which any of the Partnership Entities is or may be a party or to which the business or property of any of the Partnership Entities is or may be subject, (ii) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency or, to the knowledge of the MarkWest Parties, proposed by any governmental agency and (iii) no injunction, restraining order or order of any nature issued by a federal or state court or foreign court of competent jurisdiction to which any of the Partnership Entities is or may be subject, that, in the case of clauses (i), (ii) and 12 (iii) above, is reasonably likely to (A) individually or in the aggregate have a Material Adverse Effect, (B) prevent or result in the suspension of the offering and issuance of the Units, or (C) in any manner draw into question the validity of this Agreement or any Operative Agreement. (kk) No Distribution of Other Offering Materials . None of the Partnership Entities has distributed and, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Units, will not distribute, any prospectus (as defined under the 1933 Act) in connection with the offering and sale of the Units other than the Registration Statement, the Preliminary Prospectus, the Prospectus or other materials, if any, permitted by the 1933 Act, including Rule 134 of the 1933 Act Rules and Regulations. (ll) Listing . The Units have been approved for listing on the American Stock Exchange, subject only to official notice of issuance. (mm) Stabilization . None of the Partnership Entities (i) has taken, and none of such persons shall take, directly or indirectly, any action designed to cause or result in, or which has constituted or which would reasonably be expected to constitute, the stabilization or manipulation of the price of the Common Units to facilitate the sale or resale of the Common Units in violation of any law, rule or regulation or (ii) since the initial filing of the Registration Statement, except as contemplated by this Agreement, (A) has sold, bid for, purchased or paid anyone any compensation for soliciting purchases of the Common Units or (B) has paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Partnership. (nn) Disclosure Controls . The Partnership has established and maintains disclosure controls and procedures (as that term is defined in Rule 13a-14 under the 1934 Act), which (i) are designed to ensure that material information relating to the Partnership, including its consolidated subsidiaries, is made known to the Partnership's principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the 1934 Act are being prepared; (ii) have been evaluated for effectiveness as of the end of the period covered by the Partnership's most recent annual or quarterly report filed with the Commission; and (iii) are effective in achieving reasonable assurances that the Partnership's desired control objectives as described in Item 4 of the Partnership's Quarterly Report on Form 10-Q for the period ended June 30, 2004 have been met. (oo) No Deficiency in Internal Controls . Based on the evaluation of its disclosure controls and procedures conducted in connection with the preparation and filing of its Quarterly Report on Form 10-Q for the period ended June 30, 2004, the Partnership is not aware of (i) any significant deficiency or material weakness in the design or operation of its internal controls over financial reporting that are likely to adversely affect the Partnership's ability to record, process, summarize and report financial data; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Partnership's internal controls over financial reporting. (pp) No Changes in Internal Controls . There have been no significant changes in the Partnership's internal controls over financial reporting that occurred during the third quarter of 2004 that materially affected or are reasonably likely to materially affect the Partnership's internal controls over financial reporting. (qq) Form S-3 . The Partnership has satisfied the conditions for the use of Form S-3. (rr) Significant Subsidiaries . None of the MarkWest Parties has any subsidiaries (other than MarkWest Appalachia LLC, West Shore LLC, Western Oklahoma LLC and East Texas LP (collectively, the " Significant Subsidiaries ") which, individually or considered as a whole, would be deemed to be a significant subsidiary (as such term is defined in Rule 405 under the 1933 Act). 13 Any certificate signed by any officer of any MarkWest Party and delivered to you or to counsel for the Underwriters shall be deemed a representation and warranty by such MarkWest Party to each Underwriter as to the matters covered thereby. 5. Representations, Warranties and Agreements of the Selling Unitholders . Each Selling Unitholder, severally and not jointly, represents, warrants and agrees with each Underwriter that: (a) No Material Misstatements or Omissions . With respect to any statements or omissions, if any, made in the Registration Statement and the Prospectus in reliance upon and in conformity with information furnished to the Partnership by such Selling Unitholder expressly for use therein (as provided in Section 15 hereof), (i) neither the Registration Statement nor any amendment thereto, as of the applicable effective date, contains or will contain, as the case may be, any untrue statement of a material fact or omits or will omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and (ii) neither the Preliminary Prospectus, the Prospectus nor any supplement thereto contains or will contain, as the case may be, any untrue statement of a material fact or omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) Knowledge of Material Facts . Such Selling Unitholder has not relied on any material nonpublic information concerning the MarkWest Entities which is not set forth in the Prospectus to sell its Units pursuant to this Agreement. (c) Title to Firm Units . Such Selling Unitholder has, and on the Closing Date will have, valid title to, or a valid "security entitlement" within the meaning of Section 8-501 of the New York Uniform Commercial Code in respect of, the Units to be sold by such Selling Unitholder free and clear of all security interests, claims, liens, equities or other. (d) Transfer of Title . Delivery of the Firm Units to be sold by such Selling Unitholder and payment therefor pursuant to this Agreement will pass valid title to such Firm Units, free and clear of any adverse claim within the meaning of Section 8-102 of the New York Uniform Commercial Code, to each Underwriter who has purchased such Firm Units without notice of an adverse claim. (e) Power of Attorney and Custody Agreement . Such Selling Unitholder has placed or caused to be placed in custody under the Custody Agreement dated on or before September 21, 2004 (the " Custody Agreement ") furnished to such Selling Unitholder and duly executed and delivered by or on behalf of such Selling Unitholder to the Partnership, as custodian (the " Custodian "), for delivery under this Agreement, one or more certificates in negotiable form (with signature guaranteed by a commercial bank or trust company having an office or correspondent in the United States or a member firm of the New York Stock Exchange) representing the Firm Units to be sold by such Selling Unitholder hereunder. Such Selling Unitholder specifically agrees that the Firm Units represented by the certificates so held in custody for such Selling Unitholder are subject to the interest of the Underwriters, that the arrangements made by such Selling Unitholder for custody are to that extent irrevocable except as provided in the Custody Agreement and in the Power of Attorney dated on or before September 21, 2004 (the " Power of Attorney ") and that the obligations of such Selling Unitholder hereunder shall not be terminated by any act of such Selling Unitholder, by operation of law or the occurrence of any other event. Such Selling Unitholder has duly and irrevocably executed and delivered or caused to be executed and delivered a Power of Attorney appointing each of Andrew L. Schroeder and James G. Ivey as such Selling Unitholder's Attorney-in-Fact (the " Attorneys-in-Fact ") upon the terms and subject to the conditions set forth therein to execute and deliver this Agreement and to take certain other action on behalf of such Selling Unitholder as may be necessary or desirable in connection with the transactions contemplated by this Agreement and the Custody Agreement. 14 (f) Authority and Authorization . Such Selling Unitholder has all requisite power, authority and capacity to enter into this Agreement, the Power of Attorney and the Custody Agreement and to sell and deliver its Firm Units in accordance with and upon the t |
AGREEMENTS / CONTRACTS
CLAUSES
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