EXHIBIT 1.A
Execution Copy
GULFTERRA ENERGY PARTNERS, L.P.
COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
October 15, 2003
Xxxxxxx, Xxxxx & Co.
As representative of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
GulfTerra Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), and Sabine River Investors I, L.L.C., a Delaware limited
liability company (the "Selling Unitholder") propose, subject to the terms and
conditions stated herein, for the Partnership to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
4,800,000 common units (the "Firm Units") representing limited partner interests
in the Partnership ("Common Units") and, at the election of the Underwriters,
for the Selling Unitholder to sell up to 720,000 additional Common Units (the
"Optional Units") of the Partnership (the Firm Units and the Optional Units that
the Underwriters elect to purchase pursuant to Section 3 hereof being
collectively called the "Units").
1. The Partnership represents and warrants to, and agrees with, each of
the Underwriters that:
(a) The Partnership has prepared and filed with the Securities and
Exchange Commission (the "Commission") two registration statements (file numbers
333-81772 (the "2002 Registration Statement") and 333-107082 (the "2003
Registration Statement")) on Form S-3, including (in each case) a related base
prospectus, for registration under the Securities Act of 1933, as amended (the
"Act"), of the offering and sale of Common Units, and Amendment No. 1 to the
2002 Registration Statement and Amendment No. 1 to the 2003 Registration
Statement (each an "Initial Registration Statement" and collectively, the
"Initial Registration Statements"). At the respective times of the filing of
each such amendment and on the effective date of each Initial Registration
Statement, the Partnership met the requirements for use of Form S-3 under the
Act. Each Initial Registration Statement and any post effective amendment
thereto,
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each in the form heretofore delivered to you (via XXXXX or otherwise), have been
declared effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the Act, which
became effective upon filing, documents incorporated by reference in each base
prospectus contained in each Initial Registration Statement, any supplement
filed thereto and any documents incorporated by reference to such supplement, no
other document with respect to either Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of either Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus supplement to the base prospectuses
included in the Initial Registration Statements, together with such base
prospectuses, that describes the Units, the offering thereof and this Agreement,
filed with the Commission pursuant to the rules and regulations of the
Commission under the Act and used prior to the filing of the Prospectus (herein
defined) is hereinafter called a "Preliminary Prospectus"); the various parts of
the Initial Registration Statements and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including (i) the information
contained in the form of a final prospectus supplement to each base prospectus
included in the Initial Registration Statements, filed with the Commission after
the date hereof pursuant to Rule 424(b) under the Act in accordance with Section
6(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statements at the time it was declared effective and (ii)
the documents incorporated by reference in such final prospectus supplement are
hereinafter collectively called the "Registration Statement"; such final
prospectus supplement, in the form first filed pursuant to Rule 424(b) under the
Act, together with each base prospectus included in the Initial Registration
Statement, is hereinafter called the "Prospectus"; and any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment or supplement
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any amendment
to the Registration Statement shall be deemed to refer to and include any annual
report of the Partnership filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the 2002 Registration Statement that is
incorporated by reference in the Registration Statement as well as the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein
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or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Partnership by an Underwriter through Xxxxxxx, Sachs & Co. expressly for use
therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Partnership by an Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein.
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, 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, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Partnership by an Underwriter through Xxxxxxx, Sachs & Co. expressly for use
therein.
(e) The Partnership has been duly formed and is validly existing as a
limited partnership under the Delaware Revised Uniform Limited Partnership Act
(the "Delaware Act"), with full partnership power and authority to own or lease,
as the case may be, and to operate its properties and conduct its business in
each case as described in the Registration Statement, the Preliminary Prospectus
and as will be described in the Prospectus, and has been qualified or registered
to do business as a foreign limited partnership and is in good standing under
the laws of each jurisdiction which requires such qualification, other than any
jurisdiction where the failure to be so qualified would not, individually or in
the aggregate, have a material adverse effect on
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the condition (financial or otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business. "Subsidiary" of any person or
entity means any corporation, limited liability company, partnership (general or
limited), joint venture or other legal entity of which such person or entity
(either alone or through or together with any other Subsidiary), owns, directly
or indirectly, more than 50% of the stock or other equity interests the holder
of which is generally entitled to vote for the election of the board of
directors or other governing body of such corporation, limited liability
company, partnership, joint venture or other legal entity.
(f) GulfTerra Energy Company, L.L.C., a Delaware limited liability
company and the general partner of the Partnership (the "General Partner"), has
been duly organized and is validly existing as a limited liability company in
good standing under the laws of the State of Delaware, with full limited
liability company power and authority to own or lease, as the case may be, and
to operate its properties, to conduct its business and to act as general partner
of the Partnership, as described in the Registration Statement, the Preliminary
Prospectus and as will be described in the Prospectus, and has been qualified or
registered to do business as a foreign limited liability company and is in good
standing under the laws of each jurisdiction which requires such qualification,
other than any jurisdiction where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, or subject the limited partners
of the Partnership to any material liability or disability.
(g) The General Partner is the sole general partner of the Partnership
with a 1.0% general partner interest in the Partnership; such general partner
interest is duly authorized and was validly issued to the General Partner in
accordance with the Second Amended and Restated Agreement of Limited Partnership
of the Partnership dated as of August 31, 2000 (as amended, the "Partnership
Agreement"), which 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, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer
and conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, (ii) general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and (iii)
securities laws and public policy underlying such laws with respect to rights to
indemnification and contribution ((i), (ii) and (iii), "Enforceability
Exceptions"); the General Partner owns such general partner interest free and
clear of any lien, adverse claim, security interest or other encumbrance, other
than any lien, adverse claim, security interest or other interest created in
connection with or permitted under (i) the Seventh Amended and Restated Credit
Agreement among the Partnership, GulfTerra Energy Finance Corporation, the
several lenders from time to time parties thereto, and JPMorgan Chase Bank, as
Administrative Agent, dated as of March 23, 1995, as amended and restated
through September 26, 2003, and the collateral documents
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related thereto (collectively and as amended, the "Credit Agreement"), (ii) the
credit agreement to which Poseidon Oil Pipeline Company, L.L.C., a Delaware
limited liability company in which a subsidiary of the Partnership owns a 36%
membership interest, is party, and the collateral documents related thereto,
(iii) the credit agreement to which Deepwater Gateway, L.L.C., a Delaware
limited liability company in which a subsidiary of the Partnership owns a 50%
membership interest, is party, and the collateral documents related thereto,
(iv) the credit agreement and note purchase agreement to which Cameron Highway
Oil Pipeline Company, a Delaware general partnership in which a subsidiary of
the Partnership owns a 50% general partner interest, is party, and the
collateral documents related thereto, (v) the indenture into which the
Partnership entered on May 27, 1999, as amended and supplemented, (vi) the
indenture into which the Partnership entered on May 17, 2001, as amended and
supplemented, (vii) the indenture into which the Partnership entered on November
27, 2002, as amended and supplemented, (viii) the indenture into which the
Partnership entered on March 24, 2003, as amended and supplemented, (ix) the
indenture into which the Partnership entered on June 26, 2003, as amended and
supplemented, (x) the credit arrangements to which El Paso Corporation or its
subsidiaries are party, (xi) the Amended and Restated Limited Liability Company
Agreement of the General Partner dated October 2, 2003 (the "General Partner LLC
Agreement"), (xii) the Exchange and Registration Rights Agreement among the
Partnership, the General Partner and Xxxxxxx, Xxxxx & Co (as amended, the
"Exchange Agreement") and (xiii) the Incentive Distribution Reduction Agreement
between the Partnership and the General Partner (the "Reduction Agreement") (the
liens, adverse claims, security interests and other interests created in
connection with or permitted under clauses (i) - (xiii) are referred to as
"Permitted Encumbrances").
(h) The Selling Unitholder and Sabine River Investors II, L.L.C.
("Xxxxxx XX") own limited partner interests in the Partnership represented by
11,674,245 Common Units and El Paso EPN Investments, L.L.C. ("EPN Investments")
owns 10,937,500 Series C Units; all of such Common Units and the limited partner
interests represented thereby have been duly authorized and validly issued and
are fully paid (to the extent required by the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by the Delaware
Act); and the Selling Unitholder and Xxxxxx XX own such limited partner
interests free and clear of any lien, adverse claim, security interest or other
encumbrance, other than Permitted Encumbrances.
(i) The Partnership's authorized and outstanding partnership interests
are as set forth in the Preliminary Prospectus and as will be set forth in the
Prospectus; the partnership interests of the Partnership and the Partnership
Agreement conform in all material respects to the descriptions thereof contained
in the Preliminary Prospectus and as will be contained in the Prospectus; all of
the outstanding Common Units and the Series F convertible units of the
Partnership ("Series F Units") and the limited partner interests represented
thereby have been duly and validly authorized and issued, are fully paid (to the
extent required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by the Delaware Act) and are free of any
preemptive or similar rights, except as otherwise set forth in the Partnership
Agreement; the Firm Units and the limited partner interests represented thereby
have
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been duly and validly authorized and, when issued, delivered and paid for by
the Underwriters pursuant to this Agreement, will be fully paid (to the extent
required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by the Delaware Act) and free of any preemptive
rights or similar rights, except as set forth in the Partnership Agreement, and
the Underwriters will acquire the Firm Units free and clear of any lien, adverse
claim, security interest, equity or other encumbrance; and, except as set forth
in the Preliminary Prospectus and as will be set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any securities
for, partnership interests or ownership interests in the Partnership are
outstanding, other than (i) options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, partnership interests or ownership
interests in the Partnership included or described in any of the Partnership
Agreement and employee or non-employee director option plans, employment
agreements and other employment arrangements to which the Partnership, the
General Partner or their affiliates are party with respect to the Partnership
and (ii) the Exchange Agreement and the Reduction Agreement ((i) and (ii), the
"Existing Commitments").
(j) The issued and outstanding membership interests of the General
Partner consist solely of a Class A membership interest, representing 9.9% of
the total outstanding membership interests of the General Partner (the "Class A
Membership Interest") and a Class B membership interest, representing 90.1% of
the total outstanding membership interests of the General Partner (the "Class B
Membership Interest," and together with the Class A Membership Interest, the
"Membership Interests"). All of the issued and outstanding Membership Interests
of the General Partner have been duly and validly authorized and issued and are
(to the extent required by the General Partner LLC Agreement) fully paid and
(except as such nonassessability may be affected by the Delaware Limited
Liability Company Act (the "Delaware LLC Act")) nonassessable. The entire Class
B Membership Interest is owned by GulfTerra GP Holding Company, a Delaware
corporation ("GulfTerra GP Holding"), free and clear of any lien, adverse claim,
security interest, equity or other encumbrance, except for Permitted
Encumbrances. GulfTerra GP Holding is an indirect, wholly-owned subsidiary of El
Paso Corporation. The entire Class A Membership Interest is owned (of record) by
Xxxxxxx, Xxxxx & Co.
(k) The entities listed on Annex A are the only Subsidiaries of the
Partnership. All of the outstanding shares of capital stock, limited partner
interests, general partner interests or limited liability company interests of
each of the Partnership's Subsidiaries have been duly and validly authorized and
issued and are fully paid and (except (i) as required to the contrary by the
Delaware LLC Act and the Delaware Act and (ii) with respect to any general
partner interests) nonassessable, and, except as otherwise set forth in Annex A
are owned by the Partnership, directly or indirectly through one or more
wholly-owned subsidiaries, free and clear of any lien, adverse claim, security
interest or other encumbrance, other than Permitted Encumbrances. Exhibit A also
lists each Subsidiary of the Partnership (each, a "Significant Subsidiary")
that, together with its
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Subsidiaries, owns assets the net book value of which constitute 5% or more of
the consolidated net book value of the Partnership as of September 30, 2003.
(l) Each of the Partnership's Subsidiaries has been duly formed or
incorporated and is validly existing as a corporation, limited partnership,
general partnership or limited liability company in good standing (except with
respect to general partnerships) under the laws of the jurisdiction in which it
is chartered or organized, with full entity power and authority to own or lease,
as the case may be, and to operate its properties and conduct its business as
described in the Preliminary Prospectus and as will be described in the
Prospectus, and is duly qualified to do business as a corporation, limited
partnership, general partnership or limited liability company and is in good
standing (except with respect to general partnerships) under the laws of each
jurisdiction listed on Annex B, which are the only jurisdictions which require
such qualification, other than any jurisdiction where the failure to be so
qualified would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, business or
properties of the Partnership and its Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business.
(m) There is no material franchise, contract or other document of a
character required to be described in the Registration Statement, the
Preliminary Prospectus and as will be described in the Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as required; the
statements in the Preliminary Prospectus and the statements that will be in the
Prospectus under the headings "Description of Limited Partner Interests,"
"Description of the Common Units," "Certain Other Partnership Agreement
Provisions," "Tax Considerations," "Additional Tax Considerations," "Income Tax
Considerations," and "Investment by Employee Benefit Plans," insofar as such
statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings.
(n) This Agreement has been duly authorized, executed and delivered by
the Partnership and constitutes a valid and binding obligation of the
Partnership, enforceable against the Partnership in accordance with its terms,
subject to Enforceability Exceptions.
(o) Each of the Partnership and the General Partner is not and, after
giving effect to the offering and sale of the Units and the application of the
proceeds thereof as described in the Preliminary Prospectus and as will be
described in the Prospectus, will not be (i) an "investment company" as defined
in the Investment Company Act of 1940, as amended or (ii) a "holding company"
within the meaning of, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended, and the rules and regulations
promulgated by the Commission thereunder.
(p) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except for the filing of the Prospectus
pursuant to Rule 424(b)
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under the Act and such as have been obtained under the Act and such as may be
required by the New York Stock Exchange (the "Exchange") or under the blue sky
laws of any jurisdiction in connection with the purchase and distribution of the
Units by the Underwriters in the manner contemplated herein, in the Preliminary
Prospectus and as will be contemplated in the Prospectus.
(q) Neither the issue and sale of the Firm Units nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, or result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Partnership or any of its Subsidiaries or the General Partner pursuant to, (i)
the partnership agreement, limited liability company agreement, charter, by-laws
or similar organizational document of the Partnership or any of its Subsidiaries
or the General Partner, as applicable, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which the
Partnership or any of its Subsidiaries or the General Partner is a party or
bound or to which its or their property is subject, or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the Partnership or any
of its Subsidiaries or the General Partner of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Partnership or any of its Subsidiaries or the General
Partner or any of its or their properties, except, in the case of (ii) or (iii),
where such conflict, breach, violation or imposition would not, individually or
in the aggregate, have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Partnership and its
Subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business.
(r) No holders of securities of the Partnership have rights to include
such securities in the offering described in the Prospectus except for such
rights (i) of the General Partner and its affiliates in Section 6.14 of the
Partnership Agreement, which have executed and delivered a waiver of such rights
with respect to such offering; and (ii) of Xxxxxx XX pursuant to the
Registration Rights Agreement that was executed in connection with the
acquisition by the Partnership of an additional interest in Viosca Xxxxx
Gathering Company, which has executed and delivered a waiver of such rights with
respect to such offering.
(s) The consolidated historical financial statements and schedules of
the Partnership and its consolidated Subsidiaries included in the Preliminary
Prospectus and the Registration Statement and that will be included in the
Prospectus present fairly in all material respects the financial condition,
results of operations and changes in financial position of the Partnership and
its consolidated Subsidiaries as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements of the Act and
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). The financial data set forth under the caption
"Summary Historical and Pro Forma Consolidated Financial Data" in the
Preliminary Prospectus and the Registration Statement and that will be included
in the Prospectus
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fairly present, on the basis stated in the Preliminary Prospectus and the
Registration Statement and that will be stated in the Prospectus, the
information included therein.
(t) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Partnership or any of its Subsidiaries or its or their respective properties is
pending or, to the knowledge of the Partnership, threatened that (i) would
reasonably be expected to have a material adverse effect on the performance of
this Agreement or the consummation of any of the transactions contemplated
hereby or (ii) would reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Registration Statement or the Prospectus.
(u) Each of the Partnership and its Subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations as presently
conducted, except where the lack of such ownership or leasing would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(v) None of the Partnership, any of its Subsidiaries or the General
Partner is in violation or default of (i) any provision of its partnership
agreement, limited liability company agreement, charter, by-laws or similar
organizational document, as applicable, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or, to
the knowledge of the Partnership, any other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property
is subject, or (iii) to the Partnership, any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Partnership or such Subsidiary or the General Partner or any of their respective
properties, except, in the case of (ii) and (iii), where such violation or
default would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, business or
properties of the Partnership and its Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business.
(w) To the knowledge of the Partnership: PricewaterhouseCoopers, LLP,
who have certified certain financial statements of the Partnership and its
Subsidiaries, Poseidon Oil Pipeline Company, L.L.C., the General Partner and
GulfTerra Energy Finance Corporation, and delivered their report with respect to
the audited financial statements and schedules for such entities included in or
incorporated by reference into the Preliminary Prospectus and will be included
in or incorporated by reference into the Prospectus, are independent public
accountants within the meaning of the Act and the applicable published rules and
regulations thereunder.
(x) Each of the Partnership, its Subsidiaries and the General Partner
has filed all foreign, federal, state and local tax returns that are required to
be filed or has
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requested extensions thereof (except in any case in which the failure so to file
would not, individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business), except as set forth in or
contemplated in the Preliminary Prospectus and as will be set forth in or
contemplated in the Prospectus and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Preliminary Prospectus and as will be set forth in or
contemplated in the Prospectus.
(y) No labor problem or dispute with the employees of the Partnership
or any of its Subsidiaries exists or is threatened or imminent, and the
Partnership is not aware of any existing or imminent labor disturbance by the
employees of any of its or its Subsidiaries' principal suppliers, contractors or
customers, that would, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, business or
properties of the Partnership and its Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus.
(z) Each of the Partnership, its Subsidiaries and the General Partner
(i) possesses all licenses, certificates, permits and other authorizations
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and (ii) has not received any
notice of proceedings relating to the revocation or modification of any such
license, certificate, authorization or permit which, in the case of (i) and (ii)
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, or otherwise, would have a material adverse effect on the condition
(financial or otherwise), earnings, business or properties of the Partnership
and its Subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated in
the Preliminary Prospectus and as will be set forth in or contemplated in the
Prospectus.
(aa) Except as otherwise set forth in the Registration Statement, the
Preliminary Prospectus and as will be set forth in the Prospectus, such as are
not material to the condition (financial or otherwise), earnings, business or
properties of the Partnership and its Subsidiaries, taken as a whole, or as do
not materially interfere with ownership or benefits of ownership of such
properties, taken as a whole, and except for Permitted Encumbrances, the
Partnership and its Subsidiaries have good and defensible title to their
interests in their oil and gas properties.
(bb) The information which was supplied by the Partnership to
Netherland, Xxxxxx & Associates, Inc. ("Netherland & Xxxxxx"), independent
petroleum engineers, for purposes of evaluating the oil and gas reserves of the
Partnership and its subsidiaries
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as of December 31, 2002 including, without limitation, production, costs of
operation and development, current prices for production, agreements relating to
current and future operations and sales of production, was, to the knowledge of
the Partnership, true and correct in all material respects on the dates such
estimates were made and such information was supplied and was prepared in
accordance with customary industry practices, as indicated in the letter of
Netherland & Xxxxxx dated January 24, 2003 (the "Netherland & Xxxxxx Letter");
to the Partnership's knowledge, Netherland & Xxxxxx was, as of the date of the
Netherland & Xxxxxx Letter, and is, as of the date hereof, independent with
respect to the Partnership and its Subsidiaries; other than normal production of
the reserves and intervening spot market product price fluctuations, the
Partnership is not aware of any facts or circumstances that would result in a
materially adverse change in the reserves, or the present value of future net
cash flows therefrom, as described in the Preliminary Prospectus or as will be
described in the Prospectus and as reflected in the Netherland & Xxxxxx Letter
and the reserve report referenced therein; estimates of such reserves and
present values as described in the Preliminary Prospectus or as will be
described in the Prospectus and reflected in the Netherland & Xxxxxx Letter and
the reserve report referenced therein comply in all material respects to the
applicable requirements of Regulation S-X and Industry Guide 2 under the Act.
(cc) Each of the Partnership and its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(dd) Each of the Partnership and the General Partner and their
respective affiliates has not taken, directly or indirectly, any action designed
to or which has constituted or which would reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Partnership to facilitate the sale or resale of
the Units.
(ee) To the knowledge of the Partnership, the Partnership and its
Subsidiaries are (i) in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the
11
Partnership and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus. Except as set forth in the Preliminary
Prospectus or as will be set forth in the Prospectus, to the knowledge of the
Partnership, none of the Partnership or any of its Subsidiaries or the General
Partner have been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.
(ff) In the ordinary course of its business, the Partnership
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Partnership and its Subsidiaries, in the course
of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such review,
the Partnership has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, business or
properties of the Partnership and its Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as set
forth in the Registration Statement, the Preliminary Prospectus and as will be
set forth in the Prospectus.
(gg) Each of the Partnership, its Subsidiaries and the General Partner
has fulfilled its obligations, if any, under the minimum funding standards of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder with
respect to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Partnership, its
Subsidiaries and the General Partner are eligible to participate and each such
plan is in compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations. The
Partnership and its Subsidiaries and the General Partner have not incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.
(hh) Each of the Partnership and its Subsidiaries has such consents,
easements, rights-of-way or licenses from any person ("rights-of-way") as are
necessary to conduct its business in the manner described in the Preliminary
Prospectus or as will be described in the Prospectus, subject to such
qualifications as may be set forth in the Preliminary Prospectus or as will be
set forth in the Prospectus, except for such rights-of-way which, if not
obtained, would, singly or in the aggregate, be expected not to have a have a
material adverse effect on the condition (financial or otherwise), earnings,
business or properties of the Partnership and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business; each of the Partnership and its Subsidiaries has, or at the First Time
of Delivery (defined herein) will have, fulfilled and performed all its material
obligations with respect to such rights-of-way and no event has occurred which
allows, or after notice or lapse of time would
12
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 on the condition (financial or otherwise), earnings, business or
properties of the Partnership and its Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, subject in
each case to such qualifications as may be set forth in the Prospectus; and
except as set forth in the Preliminary Prospectus or as will be set forth in the
Prospectus, none of such rights-of-way contains any restriction that is
materially burdensome to the Partnership and its Subsidiaries considered as a
whole.
(ii) Since the respective dates as of which information is given in the
Prospectus and except as set forth in or contemplated in the Preliminary
Prospectus and as will be set forth or contemplated in the Prospectus, (i) there
has been no material adverse effect on the condition (financial or otherwise),
earnings, business, or properties of the Partnership and its Subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course of
business, (ii) there has been no material adverse effect on the capital stock or
in the long-term debt of the Partnership or any of its Subsidiaries and (iii)
neither the Partnership nor any of its Subsidiaries has incurred any liability
or obligation, direct or contingent, that is material to the Partnership and its
Subsidiaries taken as a whole.
2. The Selling Unitholder represents and warrants to, and agrees with,
each of the Underwriters that:
(a) The Selling Unitholder has been duly formed and is validly existing
as a limited liability company under the Delaware LLC Act, with full limited
liability company power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business, and has been qualified or
registered to do business as a foreign limited liability company and is in good
standing under the laws of each jurisdiction which requires such qualification,
other than any jurisdiction where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Selling Unitholder, whether or not arising from transactions in the ordinary
course of business.
(b) This Agreement has been duly authorized, executed and delivered by
the Selling Unitholder and is a valid and binding agreement of the Selling
Unitholder, enforceable against the Selling Unitholder in accordance with its
terms, subject to the Enforceability Exceptions.
(c) When any Optional Units are delivered and paid for by the
Underwriters pursuant to this Agreement, the Underwriters will acquire such
Optional Units free and clear of any lien, adverse claim, security interest,
equity or other encumbrance.
(d) The Selling Unitholder at the Second Time of Delivery will have
valid title to, and will be the lawful owner of, all of the Optional Units, free
and clear of any lien, adverse claim, security interest or other encumbrance
other than Permitted
13
Encumbrances and will have the legal right and power, and all authorizations and
approvals required by law, to sell, transfer and deliver all of the Optional
Units pursuant to this Agreement.
(e) The execution, delivery and performance of this Agreement by the
Selling Unitholder, the compliance by the Selling Unitholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
and thereby will not (i) require the consent, approval, authorization or other
order of, or qualification with, any court or governmental body or agency
(except that El Paso Corporation may need to file a Form 4 and an amendment to
any report on Schedule 13D relating to the Partnership previously filed by El
Paso Corporation and except such as may be required under the securities or Blue
Sky laws of the various states), (ii) conflict with or constitute a breach of
any of the terms of provisions of, or a default under, the organizational
documents of the Selling Unitholder or any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which the Selling Unitholder is a
party or by which the Selling Unitholder or any property of the Selling
Unitholder is bound or (iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court of any governmental
body or agency having jurisdiction over the Selling Unitholder or any property
of the Selling Unitholder.
(f) All information furnished by or on behalf of the Selling Unitholder
in writing expressly for use in the Preliminary Prospectus, the Registration
Statement and Prospectus (which the parties agree consists only of the
information included in the prospectus supplement under the caption "Selling
Unitholder" and the record ownership information contained in the base
prospectus included in the 2003 Registration Statement under the caption
"Selling Unitholders") is, and at the Second Time of Delivery, will be, true,
correct and complete, and does not, and at the Second Time of Delivery, will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary, in light of the circumstances under which such
statements are made, to make such information not misleading.
3. Subject to the terms and conditions herein set forth, (a) the
Partnership agrees to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Partnership, at a purchase price per unit of $38.8745, the number of Firm Units
set forth opposite the name of such Underwriter in Schedule I hereto and (b) in
the event and to the extent that the Underwriters shall exercise the election to
purchase Optional Units as provided below, the Selling Unitholder agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Selling Unitholder, at the
purchase price per share set forth in clause (a) of this Section 3, that portion
of the number of Optional Units as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional Common Units)
determined by multiplying such number of Optional Units by a fraction, the
numerator of which is the maximum number of Optional Units which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Units that all of the Underwriters are entitled to purchase
hereunder.
14
The Selling Unitholder hereby grants to the Underwriters the right to
purchase at their election up to 720,000 Optional Units, at the purchase price
per unit set forth in the paragraph above, for the sole purpose of covering
sales of Common Units in excess of the number of Firm Units. Any such election
to purchase Optional Units may be exercised only by written notice from you to
the Partnership and the Selling Unitholder, given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate number of
Optional Units to be purchased and the date on which such Optional Units are to
be delivered, as determined by you but in no event earlier than the First Time
of Delivery (as defined in Section 5 hereof) or, unless you, the Selling
Unitholder and the Partnership otherwise agree in writing, earlier than two or
later than ten New York Business Days (defined herein) after the date of such
notice.
4. Upon the authorization by you of the release of the Firm Units, the
several Underwriters propose to offer the Firm Units for sale upon the terms and
conditions set forth in the Prospectus.
5. (a) The Units to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Partnership shall be delivered by or on behalf of the Partnership
to Xxxxxxx, Sachs & Co., through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Partnership to Xxxxxxx, Xxxxx &
Co. at least forty-eight hours in advance. The Partnership or the Selling
Unitholder, as applicable, will cause the certificates representing the Units to
be made available for checking and packaging at least twenty-four hours prior to
the Time of Delivery (as defined below) with respect thereto at the office of
DTC or its designated custodian (the "Designated Office"). The time and date of
such delivery and payment shall be, with respect to the Firm Units, 9:30 a.m.,
New York City time, on October 21, 2003 or such other time and date as Xxxxxxx,
Sachs & Co. and the Partnership may agree upon in writing, and, with respect to
the Optional Units, 9:30 a.m., New York time, on the date specified by Xxxxxxx,
Xxxxx & Co. in the written notice given by Xxxxxxx, Sachs & Co. of the
Underwriters' election to purchase such Optional Units, or such other time and
date as Xxxxxxx, Xxxxx & Co., the Selling Unitholder and the Partnership may
agree upon in writing. Such time and date for delivery of the Firm Units is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Units, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 9 hereof, including the cross
receipt for the Units and any additional documents requested by the Underwriters
pursuant to Section 9(l) hereof, will be delivered at the offices of Xxxxxx &
Xxxxxx L.L.P., 2300 First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000 (the
"Closing Location"), and the Units will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location at
4:00 p.m., New York City time, on the New York Business Day
15
preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Agreement, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
6. The Partnership, and solely for the purpose of Section 6(e) below,
the Selling Unitholder, agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second New York Business Day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement (other than (i) a Current Report on Form 8-K (A)
disclosing the terms of this Agreement or (B) solely in connection with a
conversion of Series F units, if any, and (ii) a Quarterly Report on Form 10-Q
covering the quarter ended September 30, 2003 filed after the First Time of
Delivery) to the Registration Statement or Prospectus prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable notice
thereof; provided that you will not unreasonably delay the filing of or
disapprove any such amendment or supplement; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Partnership with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Units; to
advise you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any Preliminary Prospectus or prospectus, of the suspension of the qualification
of the Units for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Units for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Units, provided that in connection therewith neither the Partnership nor the
General Partner shall be required to qualify as a foreign entity or to file a
general consent to service of process in any jurisdiction;
16
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with electronic copies of the Prospectus in New York City in
such quantities as you may reasonably request; prior to 10:00 A.M., New York
City time, on the second New York Business Day succeeding the date of this
Agreement and from time to time, to furnish the Underwriters with written copies
of the Prospectus in New York City in such quantities as you may reasonably
request; and, if the delivery of a prospectus is required at any time prior to
the expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Units and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Act or the Exchange Act, to notify you and upon your request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and electronic
copies as you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or omission
or effect such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Units at any time nine months
or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
written and electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Partnership and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Partnership, Rule 158);
(e) Not to, and to cause Xxxxxx XX and EPN Investments to agree not to,
without the prior written consent of Xxxxxxx, Sachs & Co., offer, sell, contract
to sell, pledge, or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Partnership, the General Partner, the Selling
Unitholder, Xxxxxx XX or EPN Investments or any of their subsidiaries or
controlled affiliates, or any person in privity (with respect to the Common
Units or Series C units) with the Partnership, the General Partner, the Selling
Unitholder, Xxxxxx XX or EPN Investments or any of their respective affiliates),
directly or indirectly, including the filing (or participation in the filing) of
a registration statement with the Commission in respect of, or establishment or
increase of a put equivalent position or liquidation or decrease of a call
equivalent position within the meaning of Section 16 of the Exchange Act, with
respect to any other Common Xxxxx,
00
Series C units or any securities convertible into, or exercisable, or
exchangeable for, Common Units; or publicly announce an intention to effect any
such transaction, for a period of 90 days after the First Time of Delivery;
provided, however, that the Partnership may issue and sell Common Units pursuant
to any employment agreement or other employment arrangement, employee option
plan, ownership plan or dividend reinvestment plan of the Partnership in effect
at the date and time this Agreement is executed and the Partnership may issue
Common Units issuable upon the conversion or exchange of securities or the
exercise of warrants outstanding at the date and time this Agreement is
executed; and provided, further, that the foregoing shall not prohibit (i)
Xxxxxx XX, the Selling Unitholder or EPN Investments from pledging any Common
Units or Series C units now or hereafter owned by them, or a parent of such
entities from pledging its interest in such entities, to secure certain loans to
which such parent or such entities in connection with any financing arrangements
to which such parent or such entities are parties, as amended or otherwise
modified from time to time, or the disposition of any such pledged Common Units
or Series C units, or any interest in such entities, in connection with the
exercise by the lender(s) of any remedies as a secured party or settlement in
connection therewith, (ii) the issuance by the Partnership of Common Units
pursuant to the Exchange Agreement, (v) the foreclosure by any lender under any
Permitted Encumbrance, (iii) the transfer of Common Units or Series C units by
the Selling Unitholder, Xxxxxx XX or EPN Investments to any person or entity
(including affiliates) in a private placement if such person or entity agrees
executes a lock-up agreement in the form of Annex C hereto; or (iv) EPN
Investments from exchanging its Series C Units for Common Units in accordance
with the terms of the Series C Units, provided that EPN Investments is the
recipient of all Common Units issued in such exchange;
(f) During a period of one year from the effective date of the
Registration Statement, to deliver to you (i) as soon as they are publicly
available, copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Partnership is listed; provided, however, that the Company
shall not be required to deliver to you any report or financial statements
available on XXXXX, and (ii) such additional information concerning the business
and financial condition of the Partnership as you may from time to time
reasonably request; provided that no such additional information must be
delivered if the delivery thereof would require the Partnership to make a public
filing to remain in compliance with Regulation FD (such financial statements to
be on a consolidated basis to the extent the accounts of the Partnership and its
subsidiaries are consolidated in reports furnished to its unitholders generally
or to the Commission);
(g) To use the net proceeds received by it from the sale of the Firm
Units pursuant to this Agreement in the manner specified in the Prospectus under
the caption "Use of Proceeds";
(h) To use its best efforts (i) to list, subject to notice of issuance,
the Firm Units on the Exchange, and (ii) to ensure the continuation of the
listing of the Optional Units on the Exchange;
18
(i) If the Partnership elects to rely upon Rule 462(b), the Partnership
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement, and the Partnership shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act; and
(j) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Partnership's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Units (the "License"); provided, however, that the License shall
be used solely for the purpose described above, is granted without any fee and
may not be assigned or transferred.
7. The Selling Unitholder hereby agrees with the Underwriters and the
Partnership:
(a) to deliver to the Underwriters prior to the Second Time of
Delivery, a properly completed and executed United States Treasury Department
Form W-9, which may be replaced by any other applicable form or statement
specified by Treasury Department regulations in lieu thereof;
(b) to notify promptly the Partnership and the Underwriters if, at any
time prior to the Second Time of Delivery, the Selling Unitholder has knowledge
of the occurrence of any event as a result of which the Prospectus or the
Registration Statement, in each case as then amended or supplemented, would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(c) to cooperate to the extent necessary to satisfy all conditions
precedent to the delivery of the Optional Units pursuant to this Agreement; and
(d) to do and perform all things to be done and performed by the
Selling Unitholder under this Agreement prior to the Second Time of Delivery and
to satisfy all conditions precedent to the delivery of the Optional Units
pursuant to this Agreement that the Selling Unitholder is required to satisfy.
8. Each of the Partnership and the Selling Unitholder covenants and
agrees with one another and with the several Underwriters that (a) the
Partnership will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Partnership's counsel and accountants in
connection with the registration of the Units under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the
19
offering, purchase, sale and delivery of the Units; (iii) all expenses in
connection with the qualification of the Units for offering and sale under state
securities laws as provided in Section 6(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey (iv) all fees and
expenses in connection with listing the Units on the Exchange; (v) the cost of
preparing unit certificates; (vi) the costs and charges of any transfer agent or
registrar; and (vii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section; and (b) the Selling Unitholder will pay or cause to be paid all
costs and expenses incident to the performance of the Selling Stockholder's
obligations hereunder that are not otherwise specifically provided for in this
Section 8, including (i) any fees and expenses of counsel for the Selling
Stockholder; and (ii) all expenses and taxes incident to the sale and delivery
of the Units to be sold by the Selling Unitholder to the Underwriters hereunder.
It is understood, however, that, except as provided in this Section, and
Sections 10 and 13 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale of
any of the Units by them, and any advertising expenses connected with any offers
they may make.
9. The obligations of the Underwriters hereunder, as to the Units to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Partnership and the Selling Unitholder herein are, at and as of such Time of
Delivery, true and correct, the condition that the Partnership and the Selling
Unitholder shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 6(a)
hereof; if the Partnership has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) The Representative shall have received from Xxxxxx & Xxxxxx L.L.P.,
counsel for the Underwriters, such opinion or opinions, dated the Time of
Delivery and addressed to the Representative, with respect to the issuance and
sale of the Units, the Registration Statement, the Prospectus and other related
matters as the Representative may reasonably require, and the Partnership shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters;
20
(c) Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the
Partnership, shall have furnished to you their written opinion, dated such Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) each of the Partnership and its Significant Subsidiaries
has been duly formed or incorporated and is validly existing as a
partnership, corporation or limited liability company and in good
standing (other than any general partnership) under the laws of the
jurisdiction in which it is formed, chartered or organized, with full
partnership, corporate or limited liability company power and authority
to own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus;
(ii) each of the Partnership and its Significant Subsidiaries
is duly qualified or registered to do business as a foreign limited
partnership, corporation or limited liability company, as the case may
be, and, based solely on the various certificates from public officials
of Texas, Louisiana, Alabama and Mississippi (the "Good Standing
Certificates"), is in good standing (other than any general
partnership) as a foreign limited partnership, corporation or limited
liability company authorized to do business in the respective
jurisdictions listed on Annex B;
(iii) the General Partner has been duly formed and is validly
existing as a limited liability company in good standing under the laws
of the State of Delaware, with full limited liability company power and
authority to own or lease, as the case may be, and to operate its
properties, to conduct its business and to act as general partner of
the Partnership, as described in the Registration Statement and the
Prospectus, and has been duly qualified or registered as a foreign
limited liability company for the transaction of business and, based
solely on the Good Standing Certificates, is in good standing under the
laws of each jurisdiction listed opposite its name on Annex B;
(iv) the General Partner is the sole general partner of the
Partnership and owns (of record) a 1.0% general partner interest in the
Partnership; such general partner interest is duly authorized and
validly issued to the General Partner in accordance with the
Partnership Agreement, which 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, subject to
Enforceability Exceptions; to such counsel's knowledge, other than
Permitted Encumbrances, the General Partner owns such general partner
interest free and clear of any lien, adverse claim, security interest
or other encumbrance of record in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming the General Partner as debtor is on file in the office of the
Secretary of State of the State of Delaware;
21
(v) The Selling Unitholder and Xxxxxx XX own (of record)
limited partner interests in the Partnership represented by 11,674,245
Common Units and EPN Investments owns (of record) 10,937,500 Series C
Units; all of such Common Units and Series C Units and the limited
partner interests represented thereby have been duly authorized and
validly issued and are fully paid (to the extent required by the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by the Delaware Act);
(vi) all of the issued and outstanding membership interests of
the General Partner have been duly and validly authorized and issued
and are (to the extent required by the GP LLC Agreement) fully paid and
(except as such non-assessability may be affected by the Delaware LLC
Act) nonassessable; to such counsel's knowledge, except for Permitted
Encumbrances, the entire Class B Membership Interest is owned (of
record) by GulfTerra GP Holding free and clear of any lien, adverse
claim, security interest or other encumbrance of record in respect of
which a financing statement under the Uniform Commercial Code of the
State of Delaware naming GulfTerra GP Holding as debtor is on file in
the office of the Secretary of State of the State of Delaware other
than those in favor of El Paso Corporation's lenders; and the entire
Class A Membership Interest is owned (of record) by Xxxxxxx, Xxxxx &
Co.;
(vii) all the outstanding shares of capital stock, limited
liability company interests or other equity interests of each
Significant Subsidiary have been duly and validly authorized and issued
and are (except with respect to partnership interests or as required by
the applicable limited partnership or limited liability company
agreement) fully paid and (except (i) as provided to the contrary by
the Delaware LLC Act or (ii) with respect to partnership interests)
nonassessable, and, except as otherwise set forth in the Prospectus,
are owned by the Partnership directly or indirectly through one or more
Subsidiaries, and, to such counsel's knowledge, other than Permitted
Encumbrances, are owned free and clear of any security interest, claim,
lien or other encumbrance of record in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming the Partnership, Crystal Holding, L.L.C. or GulfTerra GC, L.P.
as debtor is on file in the office of the Secretary of State of the
State of Delaware;
(viii) as of the Time of Delivery, the Partnership's issued
and outstanding partnership interests are, to the knowledge of such
counsel, as set forth in the Prospectus; the partnership interests of
the Partnership and the Partnership Agreement conform in all material
respects to the descriptions thereof contained in the Prospectus; all
of the outstanding Common Units and Series F Units and the limited
partner interests represented thereby have been duly and validly
authorized and issued, are fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by the Delaware Act) and are free of
any preemptive or similar rights arising under the Partnership
Agreement other than those that have been waived; at the First Time of
Delivery only the Firm Units and the limited partner
22
interests represented thereby have been duly and validly authorized
and, when issued, delivered and paid for by the Underwriters pursuant
to this Agreement, will be fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by the Delaware Act) and free of any
preemptive rights or similar rights arising under the Partnership
Agreement; and, except as set forth in the Prospectus, to such
counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, partnership interests
or ownership interests in the Partnership are outstanding, other than
Existing Commitments;
(ix) each Initial Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the effectiveness
of either Initial Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and
each Initial Registration Statement and the Prospectus (other than the
financial statements and other financial information contained therein,
as to which such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of the Act and
the rules thereunder;
(x) this Agreement has been duly authorized, executed and
delivered by the Partnership;
(xi) each of the Partnership and the General Partner is not
and, after giving effect to the offering and sale of the Units and the
application of the proceeds thereof as described in the Prospectus,
will not be an "investment company" as defined in the Investment
Company Act of 1940, as amended;
(xii) to the knowledge of such counsel, no consent, approval,
authorization, filing with or order of any court or governmental agency
or body having jurisdiction over the Partnership or any of its
properties is required in connection with the offering, issuance and
sale by the Partnership of the Firm Units, the offering and sale of the
Optional Units by the Selling Unitholder, the execution, delivery and
performance of this Agreement by the Partnership or the consummation of
the transactions contemplated hereby, except such as have been obtained
under the Act and such as may be required by the Exchange or under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Units by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus and such other
approvals as have been obtained;
(xiii) none of (a) the issue and sale of the Firm Units, (b)
the offering and sale of the Optional Units, (c) the execution,
delivery and performance of this Agreement, or (d) compliance by the
Partnership with the provisions hereof and consummation by the
Partnership of the transactions contemplated hereby will
23
conflict with, or result in a breach or violation of or imposition of
any lien, charge or encumbrance upon any property or assets of the
Partnership or its Subsidiaries or the General Partner pursuant to, (i)
the partnership agreement, limited liability company agreement,
charter, by-laws or similar organizational document of the Partnership
or any of its Subsidiaries or the General Partner, as applicable, (ii)
the terms of any Material Agreement, or (iii) to such counsel's
knowledge, any statute, law, rule, regulation, judgment, order or
decree applicable to the Partnership or any of its Subsidiaries or the
General Partner of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Partnership or any of its Subsidiaries or the General Partner
or any of its or their properties, except, in the case of (ii) or
(iii), where such conflict, breach, violation or imposition would not,
individually or in the aggregate, be likely to have, in the reasonable
judgment of such counsel, a material adverse effect on the condition
(financial or otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business; "Material
Agreement" shall mean the agreements, contracts or other similar
documents filed as exhibits to the Partnership's Annual Report on Form
10-K for the year ended December 31, 2002, the Partnership's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2003 and June 30,
2003, or the Partnership's Current Reports on Form 8-K filed between
January 1, 2003 and the date hereof, except such counsel need express
no opinion in clause (iii) with respect to antifraud provisions of
federal laws or state securities laws or other antifraud laws;
(xiv) to the knowledge of such counsel, the offering and sale
of the Units as contemplated by this Agreement does not give rise to
any rights for or relating to the registration of Common Units or other
securities of the Partnership other than the rights (A) of the General
Partner and its affiliates and successors in Section 6.14 of the
Partnership Agreement and (B) of Xxxxxx XX pursuant to the Registration
Rights Agreement that was executed in connection with the acquisition
by the Partnership of an additional interest in Viosca Xxxxx Gathering
Company; and
(xv) to the knowledge of such counsel: (a) there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to be filed
as an exhibit thereto, which is not described or filed as required; and
(b) the statements included or incorporated by reference in the
Prospectus under the headings "Description of Limited Partner
Interests," "Description of Common Units," "Certain Other Partnership
Agreement Provisions," "Tax Considerations," "Recent Tax Developments,"
"Income Tax Considerations," and "Investment by Employee Benefit Plans"
insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
24
Such counsel shall also state that although such counsel has
not undertaken, except as otherwise indicated in their opinion, to
determine independently, and does not assume any responsibility for,
the accuracy or completeness of the statements in the Registration
Statement and the Prospectus, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including
review and discussion of the contents thereof, and nothing has come to
the attention of such counsel that has caused them to believe: (i) that
the Registration Statement, on the effective date or the date hereof,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) that the Prospectus, as of
its date or as of the Time of Delivery, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or (iii)
that any amendment or supplement to the Prospectus, as of its
respective date, and as of the Time of Delivery, contained any untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (it being
understood that such counsel need express no opinion with respect to
the financial statements, including the notes and the schedules
thereto, oil and gas reserve information and other financial data
included in the Registration Statement or the Prospectus).
Such counsel shall also state that, with respect to (i) and
(ii) in paragraph (xiv) above, (a) the General Partner and Xxxxxx XX
have agreed not to exercise their registration rights with respect to
such securities in connection with the offering of Units for 90 days
after the First Time of Delivery pursuant to letter agreements of even
date herewith and (b) the Common Units held by Xxxxxx XX are subject to
Permitted Encumbrances, the holders of which have not waived such
rights.
In rendering such opinion, such counsel may (A) rely as to
matters involving the application of laws of any jurisdiction other
than the States of Delaware, New York, Texas or the federal laws of the
United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Underwriters, of which a copy of any such opinion shall be delivered to
the Underwriters, (B) rely as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Partnership
and public officials, (C) assume that the signatures on all documents
examined by such counsel are genuine, which assumptions they may state
they have not independently verified, (D) state that their opinion is
limited to federal laws, the Delaware Act, the Delaware General
Corporation Law, the Delaware Limited Liability Company Act, New York
law and Texas law, (E) state that they express no opinion with respect
to state or local taxes or tax statutes to which any of the
Partnership, the limited partners of the Partnership or the General
Partner may be subject and (F) state that their opinion is furnished as
counsel for the
25
Partnership to you, as Representative of the several Underwriters, and
is solely for the benefit of the several Underwriters. References to
the Registration Statement and the Prospectus in this paragraph 9(c)
include any amendments and supplements thereto at the Time of Delivery.
(d) Xxxxxxx X. Xxxxx, Esq., counsel for the Partnership, or such other
counsel for the Partnership reasonably satisfactory to the Representative, shall
have furnished to you his written opinion, dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Partnership or any of its Subsidiaries or its or their property of a
character required to be disclosed in the Prospectus which is not
adequately disclosed in the Prospectus, except those that (a) would not
be likely to have, in the reasonable judgment of such counsel, a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (b)
would not be likely to have, in the reasonable judgment of such
counsel, a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Partnership and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto); and
(ii) The Partnership is not and after giving effect to the
offering and sale of the Units and the application of the proceeds
thereof as described in the Prospectus, will not be a "holding company"
within the meaning of, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended, and the rules and
regulations promulgated by the Commission thereunder.
(e) Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel to the Selling
Unitholder, or such other counsel for the Selling Unitholder reasonably
satisfactory to the Representative, shall have furnished to you their written
opinion, dated as of the Second Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Selling Unitholder is validly existing as a limited
liability company in good standing under the laws of its jurisdiction
of formation with full power and corporate and all other necessary
authority to own its properties and conduct its business;
(ii) The Selling Unitholder has full legal right, power and
authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws) to enter
into this Agreement and to sell, assign, transfer and deliver the Units
to be sold by the Selling Unitholder in the manner provided in this
Agreement and to such counsel's knowledge, as of the time immediately
preceding delivery of the Units to the Underwriter, the Selling
Unitholder had valid title to the Units;
26
(iii) This Agreement has been duly authorized, validly
executed and delivered by the Selling Unitholder;
(iv) When the Units are paid for and delivered pursuant to
this Agreement, (A) DTC shall be a "protected purchaser" of the Units
within the meaning of Section 8.303 of the UCC, (B) the Underwriter
will acquire a valid "security entitlement" (as defined in Section
8.102 of the UCC) to, and control of the Units, and (C) to the extent
governed by the UCC, no action based on any "adverse claim" (as defined
in Section 8.102 of the UCC) to the Units (or security entitlement with
respect thereto) may be asserted against the Underwriter with respect
to the Units or such security entitlement; and
(v) The execution, delivery and performance of this Agreement
by the Selling Unitholder, the compliance with all of the provisions
hereof and the consummation of the transactions contemplated hereby
will not (A) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency or third party (except that El Paso Corporation may need to file
a Form 4 and an amendment to any report on Schedule 13D relating to the
Partnership previously filed by El Paso Corporation and except such as
may be required under the securities or Blue Sky laws of the various
states), (B) conflict with or constitute a breach of any of the terms
of provisions of, or a default under, the organizational documents of
the Selling Unitholder or any indenture, loan agreement, mortgage,
lease, or other agreement or instrument known to such counsel after due
inquiry and to which the Selling Unitholder is a party or by which the
Selling Unitholder or any property of the Selling Unitholder is bound
or (C) violate or conflict with any applicable law or any rule,
regulation, judgment, order, or decree of any court of any governmental
body or agency having jurisdiction over the Selling Unitholder or any
property of the Selling Unitholder.
In rendering such opinion, such counsel may (A) rely as to matters
involving the application of laws of any jurisdiction other than the States of
Delaware, Texas or New York or the federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, of which a copy of any such
opinion shall be delivered to the Underwriters, (B) rely as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of the
Selling Unitholder and public officials, (C) assume that the signatures on all
documents examined by such counsel are genuine, which assumptions they may state
they have not independently verified, (D) state that their opinion is limited to
federal laws, the Delaware Act, the Delaware General Corporation Law, the
Delaware Limited Liability Company Act, New York law and Texas law, (E) state
that they express no opinion with respect to state or local taxes or tax
statutes to which any of the Partnership, the limited partners of the
Partnership or the General Partner may be subject and (F) state that their
opinion is furnished as counsel for the Selling Unitholder to you, as
Representative of the several Underwriters, and is solely for the benefit of the
several Underwriters. References to the Registration Statement and the
Prospectus in
27
this paragraph 9(e) include any amendments and supplements thereto at the Time
of Delivery.
(f) The Partnership shall have requested and caused
PricewaterhouseCoopers LLP, at the time this Agreement is executed and at such
Time of Delivery, to have furnished to the Underwriters letters, dated as of the
time of this Agreement and as of such Time of Delivery, as the case may be, in
form and substance satisfactory to the Underwriters, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable rules and regulations adopted by the Commission
thereunder with respect to the Partnership, Partnership Subsidiary or
Partnership joint venture whose financial statements they have respectively
audited and containing the information and statements of the type ordinarily
included in accountants' "comfort letters" to the Underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectus;
(g) (i) None of the General Partner, the Partnership nor any of its
Subsidiaries shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any 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, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any change in
the capitalization or short-term or long term debt of the General Partner, the
Partnership or any of its Subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, partners' equity or results of operations of the General
Partner, the Partnership and its Subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is in the judgment of the Underwriters so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Units being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Partnership's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the
Partnership's debt securities;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the Exchange; (ii) a suspension or material limitation in trading
in the Partnership's securities on the Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York or Texas
State authorities or a material disruption in commercial banking or securities
settlement or clearance services in the
00
Xxxxxx Xxxxxx; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war; or (v) the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States or elsewhere,
if the effect of any such event specified in clause (iv) or (v) in the judgment
of the Representative makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Units being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(j) (A) The Firm Units to be sold at the First Time of Delivery shall
have been duly listed, subject to notice of issuance, on the Exchange, and (B)
the Optional Units, at the Time of Delivery, shall continue to be duly listed on
the Exchange;
(k) The Partnership has obtained and delivered to the Underwriters
executed copies of agreements from the General Partner, Xxxxxx XX and EPN
Investments, substantially to the effect set forth in the form attached hereto
as Annex C;
(l) The Partnership shall have complied with the provisions of Section
6(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(m) The Partnership shall have furnished or caused to be furnished to
you at such Time of Delivery certificates of officers of the Partnership and the
General Partner satisfactory to you as to the accuracy of the representations
and warranties of the Partnership herein at and as of such Time of Delivery, as
to the performance by the Partnership of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth in
subsections (a) and (g) of this Section and as to such other matters as you may
reasonably request.
(n) The Selling Unitholder shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of the
Selling Unitholder satisfactory to you as to the accuracy of the representations
and warranties of the Selling Unitholder herein at and as of such Time of
Delivery, as to the performance by the Selling Unitholder of all of its
obligations hereunder to be performed at or prior to such Time of Delivery and
to such other matters as you may reasonably request.
10. (a) Each of the Partnership and the Selling Unitholder, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
29
any such action or claim as such expenses are incurred; provided, however, that
the Partnership and the Selling Unitholder shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Partnership by any
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein; provided
that with respect to any untrue statement or omission of material fact made in
any Preliminary Prospectus, the indemnity agreement contained in this Section
10(a) shall not inure to the benefit of any Underwriter from whom the person
asserting any such loss, claim, damage or liability purchased the Units
concerned, to the extent that any such loss, claim, damage or liability of such
Underwriter occurs under the circumstance where it shall have been determined by
a court of competent jurisdiction by final and nonappealable judgment that (w)
the Partnership had previously furnished copies of the Prospectus to the
Underwriters, (x) delivery of the Prospectus was required by the Act to be made
to such person, (y) the untrue statement or omission of a material fact
contained in the Preliminary Prospectus was corrected in the Prospectus and (z)
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the
Prospectus; provided, further, that the liability of the Selling Unitholder
pursuant to this Section 10(a) shall not exceed the product of the number of
Units sold by the Selling Unitholder and the public offering price of the Units
set forth in the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Partnership
and the Selling Unitholder against any losses, claims, damages or liabilities to
which the Partnership or the Selling Unitholder may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Partnership by such Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein; and will reimburse the Partnership and the Selling
Unitholder for any legal or other expenses reasonably incurred by the
Partnership and the Selling Unitholder in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In
30
case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Partnership and the Selling Unitholder on the
one hand and the Underwriters on the other from the offering of the Units. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Partnership and the Selling Unitholder on one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Partnership and the Selling Unitholder on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Partnership and the Selling Unitholder, as applicable, bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Partnership and the Selling Unitholder on the one hand or the Underwriters on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Partnership,
the Selling Unitholder and the Underwriters agree that it would not be just
31
and equitable if contributions pursuant to this subsection (d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Units underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Partnership and the Selling Unitholder under
this Section 10 shall be in addition to any liability which the Partnership or
the Selling Unitholder may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
10 shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the General Partner and to each person, if any, who
controls the Partnership, the General Partner or the Selling Unitholder within
the meaning of the Act.
11. (a) If any Underwriter shall default in its obligation to purchase
the Units which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Units on the terms contained herein. If within thirty six hours
after such default by any Underwriter you do not arrange for the purchase of
such Units, then the Partnership shall be entitled to a further period of thirty
six hours within which to procure another party or other parties satisfactory to
you to purchase such Units on such terms. In the event that, within the
respective prescribed periods, you notify the Partnership that you have so
arranged for the purchase of such Units, or the Partnership notifies you that it
has so arranged for the purchase of such Units, you or the Partnership shall
have the right to postpone such Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Partnership agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Units.
32
(b) If, after giving effect to any arrangements for the purchase of the
Units of a defaulting Underwriter or Underwriters by you and the Partnership as
provided in subsection (a) above, the aggregate number of such Units which
remains unpurchased does not exceed one eleventh of the aggregate number of all
the Units to be purchased at such Time of Delivery, then the Partnership shall
have the right to require each non defaulting Underwriter to purchase the number
of Common Units which such Underwriter agreed to purchase hereunder at such Time
of Delivery and, in addition, to require each non defaulting Underwriter to
purchase its pro rata share (based on the number of Units which such Underwriter
agreed to purchase hereunder) of the Units of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Units of a defaulting Underwriter or Underwriters by you and the Partnership as
provided in subsection (a) above, the aggregate number of such Units which
remains unpurchased exceeds one eleventh of the aggregate number of all the
Units to be purchased at such Time of Delivery, or if the Partnership shall not
exercise the right described in subsection (b) above to require non defaulting
Underwriters to purchase Units of a defaulting Underwriter or Underwriters, then
this Agreement (or, with respect to the Second Time of Delivery, the obligations
of the Underwriters to purchase and of the Partnership to sell the Optional
Units) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Partnership, except for the expenses to be
borne by the Partnership and the Underwriters as provided in Section 8 hereof
and the indemnity and contribution agreements in Section 10 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
12. The respective indemnities, agreements, representations, warranties
and other statements of the Partnership, the Selling Unitholder and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Partnership, the General Partner, the Selling Unitholder or
any officer or director of the General Partner or controlling person of the
Partnership, the General Partner or the Selling Unitholder, and shall survive
delivery of and payment for the Units.
13. If this Agreement shall be terminated pursuant to Section 11
hereof, neither the Partnership nor the Selling Unitholder shall then be under
any liability to any Underwriter except as provided in Sections 8 and 10 hereof;
but, if for any other reason, the Units are not delivered by or on behalf of the
Partnership or the Selling Unitholder as provided herein, the Partnership and
the Selling Unitholder will reimburse the Underwriters through you for all out
of pocket expenses approved in writing by you, including fees and disbursements
of counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Units not so delivered, but neither the
Partnership nor the Selling Unitholder shall then be under any further liability
to any Underwriter except as provided in Sections 8 and 10 hereof.
33
14. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you as the Representative.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representative in care of Xxxxxxx, Sachs &
Co., 85th Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; and if to the Partnership shall be delivered or sent by
mail to the address of the Partnership set forth in the Registration Statement,
Attention: Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 10(d) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Partnership by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
15. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Partnership and the Selling Unitholder and, to
the extent provided in Sections 10 and 12 hereof, the officers and directors of
the General Partner and each person who controls the Partnership, the General
Partner, the Selling Unitholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Units from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
16. Time shall be of the essence of this Agreement.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
19. The Partnership is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, without the Underwriters imposing any limitation of any
kind.
20. The Underwriters agree that all of the obligations of the
Partnership hereunder are non-recourse with respect to the General Partner, and
each Underwriter agrees that it will not seek to enforce against or recover
damages from the General Partner in connection with the existence of this
Agreement or the Partnership's performance or failure to perform under this
Agreement.
34
If the foregoing is in accordance with your understanding, please sign
and return to us and upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a binding
agreement among each of the Underwriters, the Partnership and the Selling
Unitholder. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Partnership for examination upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
GULFTERRA ENERGY PARTNERS, L.P.
By: GULFTERRA ENERGY COMPANY, L.L.C.
its general partner
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
SABINE RIVER INVESTORS I, L.L.C.
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Deutsche Bank Securities Inc.
Wachovia Capital Markets, LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Xxxxxx Xxxxxx Inc.
Credit Suisse First Boston LLC
X.X. Xxxxxx Securities Inc.
By: /s/ XXXXXXX, XXXXX & CO.
-----------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
NUMBER OF
OPTIONAL
UNITS TO BE
TOTAL NUMBER OF FIRM PURCHASED IF
UNITS MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- --------------
Xxxxxxx, Xxxxx & Co. 1,800,000 270,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 600,000 90,000
Deutsche Bank Securities Inc. 600,000 90,000
Wachovia Capital Markets, LLC 600,000 90,000
X.X. Xxxxxxx & Sons, Inc. 360,000 54,000
Xxxxxxx Xxxxxx Xxxxxx Inc. 360,000 54,000
Credit Suisse First Boston LLC 240,000 36,000
X.X. Xxxxxx Securities Inc. 240,000 36,000
--------- -------
Total............................................ 4,800,000 720,000
========= =======
S-1
ANNEX A
SUBSIDIARIES
IS SUBSIDIARY
SUBSIDIARY NAME A "SIGNIFICANT SUBSIDIARY"?
--------------- ---------------------------
1. Cameron Highway Pipeline GP, L.L.C. No
2. Cameron Highway Pipeline I, L.P. No
3. Crystal Holding, L.L.C. YES
4. First Reserve Gas, L.L.C. No
5. Flextrend Development Company, L.L.C. No
6. GulfTerra Alabama Intrastate, L.L.C. No
7. GulfTerra Field Services, L.L.C. YES
8. GulfTerra GC, L.P. YES
9. GulfTerra Holding I, L.L.C. No
10. GulfTerra Holding II, L.L.C. No
11. GulfTerra Holding III, L.L.C. No
12. GulfTerra Holding IV, L.P. No
13. GulfTerra Holding V, L.P. No
14. GulfTerra Intrastate, L.P. No
15. GulfTerra NGL Storage, L.L.C. No
16. GulfTerra Oil Transport, L.L.C. No
17. GulfTerra Operating Company, L.L.C. No
18. GulfTerra South Texas, L.P. No
19. GulfTerra Texas Pipeline, L.P. YES
20. Hattiesburg Gas Storage Company No
21. Hattiesburg Industrial Gas Sales Company, L.L.C. No
22. High Island Offshore System, L.L.C. No
23. Manta Ray Gathering Company, L.L.C. No
24. Petal Gas Storage, L.L.C. YES
25. Poseidon Pipeline Company, L.L.C. No
26. GulfTerra Arizona Gas, L.L.C. No
28. Matagorda Island Area Gathering System No
29. GulfTerra Energy Finance Corporation No
A-1
ANNEX B
JURISDICTION OTHER JURISDICTIONS IN WHICH
ENTITY NAME OF FORMATION ENTITY IS QUALIFIED TO DO BUSINESS
----------- ------------ ----------------------------------
1. GulfTerra Energy Partners, L.P. Delaware Texas, Louisiana
2. GulfTerra Energy Company, L.L.C. Delaware Texas, Louisiana
3. Cameron Highway Pipeline GP, L.L.C. Delaware Texas
4. Cameron Highway Pipeline I, L.P. Delaware Texas
5. Crystal Holding, L.L.C. Delaware -----
6. First Reserve Gas, L.L.C. Delaware Mississippi
7. Flextrend Development Company, L.L.C. Delaware Texas, Louisiana, Alabama
8. GulfTerra Alabama Intrastate, L.L.C. Delaware Alabama
9. GulfTerra Field Services, L.L.C. Delaware Texas, Louisiana, New Mexico
10. GulfTerra GC, L.P. Delaware Texas, Louisiana
12. GulfTerra Holding I, L.L.C. Delaware Texas
13. GulfTerra Holding II, L.L.C. Delaware Texas
14. GulfTerra Holding III, L.L.C. Delaware Texas
15. GulfTerra Holding IV, L.P. Delaware Texas
16. GulfTerra Holding V, L.P. Delaware Texas
17. GulfTerra Intrastate, L.P. Delaware Texas, Louisiana
18. GulfTerra NGL Storage, L.L.C. Delaware Mississippi
19. GulfTerra Oil Transport, L.L.C. Delaware Texas, Louisiana
20. GulfTerra Operating Company, L.L.C. Delaware Texas, Louisiana, New Mexico
21. GulfTerra South Texas, L.P. Delaware Texas
22. GulfTerra Texas Pipeline, L.P. Delaware Texas
23. Hattiesburg Gas Storage Company Delaware -----
24. Hattiesburg Industrial Gas Sales Delaware Mississippi
Company, L.L.C.
25. High Island Offshore System, L.L.C. Delaware Texas, Louisiana
26. Manta Ray Gathering Company, L.L.C. Delaware Texas, Louisiana
27. Petal Gas Storage, L.L.C. Delaware Mississippi
28. Poseidon Pipeline Company, L.L.C. Delaware Texas
29. GulfTerra Arizona Gas, L.L.C. Delaware -----
30. Matagorda Island Area Gathering System Texas -----
31. GulfTerra Energy Finance Corporation Delaware Texas
B-1
ANNEX C
[FORM OF LOCK-UP]
[NAME AND ADDRESS OF UNDERSIGNED]
[Common Units] [Series C Units]
October [ ], 2003
Xxxxxxx, Xxxxx & Co.
As representative of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed
Underwriting Agreement (the "
Underwriting Agreement") to be
entered into by GulfTerra Energy Partners, L.P., a Delaware limited partnership
(the "Partnership"), GulfTerra Energy Company, L.L.C., a Delaware limited
liability company (the "General Partner"), Sabine River Investors I, L.L.C., a
Delaware limited liability company (the "Selling Unitholder") and you, as
Representative of the several Underwriters named therein, with respect to the
public offering (the "Offering") of common units representing limited partner
interest in the Partnership (the "Common Units").
In order to induce you to enter into the
Underwriting Agreement, the
undersigned agrees that for a period of 90 days after the time of purchase (as
defined in the
Underwriting Agreement) the undersigned will not, without the
prior written consent of Xxxxxxx Xxxxx & Co., (i) offer, sell, contract to sell,
pledge, or otherwise dispose of or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise), directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Securities and Exchange
Commission (the "Commission") in respect of, or establishment or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder with
respect to, any Common Units or Series C units of the Partnership ("Series C
Units") or any securities convertible into, or exercisable, or exchangeable for,
Common Units or Series C Units or warrants or other rights to purchase Common
Units or Series C Units, or (ii) publicly announce an intention to effect any
transaction specified in clause (i).
C-1
In addition, the undersigned hereby waives any rights the undersigned
may have to require registration of Common Units or Series C Units in connection
with the filing of a registration statement relating to the Offering. The
undersigned further agrees that, for a period of 90 days after the time of
purchase, the undersigned will not, without the prior written consent of
Xxxxxxx, Sachs & Co., make any demand for, or exercise any right with respect
to, the registration of Common Units or Series C Units or any securities
convertible into, for exercisable, or exchangeable for Common Units or Series C
Units, or warrants or other rights to purchase Common Units or Series C Units.
Notwithstanding the foregoing, the covenants and restrictions in the
two preceding paragraphs shall not apply to the registration of or sale to the
Underwriters of any Common Units pursuant to the Offering and the
Underwriting
Agreement. Further, the foregoing shall not prohibit or condition: (i) the
undersigned or any of its affiliates from selling, assigning or transferring
Common Units or Series C Units to an affiliate (as such term is defined in Rule
12b-2 promulgated under the Exchange Act), or all such transferee affiliates
from selling, assigning or transferring Common Units or Series C Units to any of
their affiliates, provided that each such transferee affiliate executes a
lock-up agreement with Xxxxxxx, Xxxxx & Co. in the form of Annex C to the
Underwriting Agreement covering such Common Units or Series C Units, as the case
may be; (ii) the undersigned or any of its affiliates from selling, assigning or
transferring Common Units or Series C Units in a private placement, provided
that each purchaser or transferee in such private placement executes a lock-up
agreement with Xxxxxxx, Sachs & Co. in the form of Annex C to the
Underwriting
Agreement covering such Common Units or Series C Units, as the case may be;
(iii) EPN Investments from exchanging its Series C Units for Common Units in
accordance with the terms of the Series C Units, provided that EPN Investments
is the recipient of all Common Units issued in such exchange; or (iv)
undersigned or any of its affiliates from pledging any Common Units or Series C
Units now or hereafter owned by them, or a parent of such entities from pledging
its interest in such entities, to secure certain loans to such entities in
connection with any financing arrangements to which such entities are parties,
as amended or otherwise modified from time to time, or the disposition of any
such pledged Common Units or Series C Units, or any interest in such entities,
in connection with the exercise by the lender of any remedies as a secured
party.
Undefined capitalized terms used herein shall have the same meaning set
forth in the
Underwriting Agreement.
Yours very truly,
C-2
