TARGA RESOURCES PARTNERS LP 8,500,000 Common Units Representing Limited Partner Interests UNDERWRITING AGREEMENT
Exhibit 1.1
Execution version
8,500,000 Common Units
Representing Limited Partner Interests
Representing Limited Partner Interests
April 9, 2010
Barclays Capital Inc.
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
UBS Securities LLC
Xxxxx Fargo Securities, LLC
Xxxxx Fargo Securities, LLC
As Representatives of the several Underwriters
c/o Barclays Capital Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Targa LP Inc., a corporation organized under the laws of Delaware (the “Selling
Unitholder”), a unitholder of Targa Resources Partners LP, a limited partnership organized
under the laws of Delaware (the “Partnership”), proposes to sell to the several
underwriters named in Schedule I hereto (the “Underwriters”), for whom you (the
“Representatives”) are acting as representatives, 8,500,000 common units (the “Firm
Units”), each representing a limited partner interest in the Partnership (the “Common
Units”). The Selling Unitholder also proposes to grant to the Underwriters an option to
purchase up to 1,275,000 additional Common Units to cover over-allotments, if any (the “Option
Units”; the Option Units, together with the Firm Units, being hereinafter called the
“Units”). Any reference herein to the Registration Statement, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or the issue date of any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Effective Date of the Registration
Statement or the issue date of any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used herein are defined
in Section 24 hereof.
Targa Resources GP LLC, a Delaware limited liability company (the “General
Partner”), is the general partner of the Partnership. Targa Resources Operating GP LLC, a
Delaware limited liability company (the “Operating GP”), is the general partner of Targa
Resources Operating LP, a Delaware limited partnership (the “Operating Partnership,” and
together with the Partnership, the General Partner and the Operating GP, the “Targa
Parties”). The Partnership’s direct or indirect majority-owned subsidiaries are listed in
Schedule II-A attached hereto and are referred to herein as the “Subsidiaries” (and
collectively with the Partnership, the “Partnership Entities”); and the subsidiaries listed
in Schedule II-B attached hereto are referred to herein as the “Material
Subsidiaries.”
This is to confirm the agreement among the Selling Unitholder, the Partnership and the
Underwriters concerning the purchase of the Units from the Selling Unitholder by the Underwriters.
1. Representations and Warranties of the Partnership. The Partnership represents and
warrants to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) Registration. The Partnership meets the requirements for use of Form S-3 under the Act
and has prepared and filed with the Commission an automatic shelf registration statement
(file number 333-165959), as defined in Rule 405, on Form S-3, including a related basic
prospectus, for registration under the Act of the offering and sale of the Units. Such
Registration Statement, including any amendments thereto filed prior to the Execution Time,
became effective upon filing. The Partnership may have filed with the Commission, as part of
an amendment to the Registration Statement or pursuant to Rule 424(b), one or more
Preliminary Final Prospectuses, each of which has previously been furnished to you. The
Partnership will file with the Commission a final prospectus supplement relating to the
Units in accordance with Rule 424(b). As filed, such final prospectus supplement shall
contain all information required by the Act and the rules thereunder, and, except to the
extent the Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in any Preliminary Final Prospectus) as
the Partnership has advised you, prior to the Execution Time, will be included or made
therein.
(b) No Material Misstatements or Omissions in Registration Statement or Prospectus. On the
Effective Date, the Registration Statement did, and when the Final Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the Closing Date (as defined in Section
4 hereof) and on any date on which Option Units are purchased, if such date is not the
Closing Date (a “settlement date”), the Final Prospectus (and any supplement
thereto) will, comply in all material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any settlement date, the
Final Prospectus (together with any supplement thereto) will not include any untrue statement of a
material fact or omit 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;
provided, however, that the Partnership makes no representations or
warranties as to the information contained in or omitted from the Registration Statement or
the Final
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Prospectus (or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Partnership by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration Statement or the
Final Prospectus (or any supplement thereto), it being understood and agreed that the only
such information furnished by or on behalf of any Underwriters consists of the information
described as such in Section 10(c) hereof.
(c) No Material Misstatements or Omissions in Disclosure Package. The Disclosure Package,
at 8:30 AM EST on April 9, 2010, which the Underwriters have informed the Partnership and
its counsel is a time prior to the first sale of the Units, does not contain any 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, not
misleading. The preceding sentence does not apply to statements in or omissions from the
Disclosure Package based upon and in conformity with written information furnished to the
Partnership by any Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 10(c) hereof.
(d) Well-Known Seasoned Issuer; Eligible Issuer. (i) At the time of filing the Registration
Statement, (ii) at the time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective
amendment, incorporated report filed pursuant to Sections 13 or 15(d) of the Exchange Act or
form of prospectus), (iii) at the time the Partnership or any person acting on its behalf
(within the meaning, for this clause only, of Rule 163(c)) made any offer relating to the
Units in reliance on the exemption in Rule 163, and (iv) at the Execution Time (with such
date being used as the determination date for purposes of this clause (iv)), the Partnership
was or is (as the case may be) a “well-known seasoned issuer” as defined in Rule 405. At the
earliest time after the filing of the Registration Statement that the Partnership or another
offering participant made a bona fide offer of the Units, the Partnership was not an
“ineligible issuer” (as defined in Rule 405).
(e) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus does not include
any information that conflicts with the information contained in the Registration Statement,
including any document incorporated therein and any prospectus supplement deemed to be a
part thereof that has not been superseded or modified. The foregoing sentence does not
apply to statements in or omissions from the Disclosure Package based upon and in conformity
with written information furnished to the Partnership by any Underwriter through the
Representatives
specifically for use therein, it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter consists of the information described as such
in Section 10(c) hereof. The Partnership has not made any offer relating to the Units that
would constitute an Issuer Free Writing Prospectus without the prior written consent of the
Underwriters.
(f) Formation and Qualification. Each of the Partnership, the General Partner and the
Material Subsidiaries has been duly formed or incorporated and is validly existing as a
general partnership, limited partnership, limited liability company or corporation, as
applicable, in good standing under the laws of the jurisdiction set forth
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opposite its name
in Schedule III attached hereto with full power and authority to own or lease its
properties and to conduct its business, in each case as described in the Disclosure Package
and the Final Prospectus, in all material respects. Each of the Partnership, the General
Partner and the Material Subsidiaries is duly registered or qualified to do business as a
foreign general partnership, limited partnership, limited liability company or corporation,
as applicable, and is in good standing under the laws of each jurisdiction which requires
such registration or qualification, except where the failure to be so registered or
qualified would not reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties of the
Partnership Entities, taken as a whole (a “Material Adverse Effect”).
(g) Power and Authority to Act as a General Partner. The General Partner has full power and
authority to act as general partner of the Partnership in all material respects as described
in the Disclosure Package and Final Prospectus. The Operating GP has full power and
authority to act as general partner of the Operating Partnership in all material respects as
described in the Disclosure Package and Final Prospectus.
(h) Ownership of the General Partner. Targa GP Inc., a Delaware corporation
(“TGPI”), owns all of the issued and outstanding membership interests of the General
Partner; such membership interests have been duly and validly authorized and issued in
accordance with the limited liability company agreement of the General Partner (as the same
may be amended or restated at or prior to the Closing Date, the “GP LLC Agreement”),
and are fully paid (to the extent required by the GP LLC Agreement) and nonassessable
(except as such nonassessability may be affected by Sections 18-607 and 18-804 of the
Delaware Limited Liability Company Act (the “Delaware LLC Act”)); and TGPI owns such
membership interests free and clear of all liens, encumbrances, security interests, charges
or other claims (“Liens”) (except restrictions on transferability and other Liens as
described in the Disclosure Package and the Final Prospectus and arising under the Credit
Agreement dated January 5, 2010, by and between Targa Resources, Inc. and the lenders named
therein (the “Targa Credit Agreement”)).
(i) Ownership of the General Partner Interest in the Partnership.
The General Partner is the sole general partner of the Partnership with a 2.0% general
partner interest in the Partnership; such general partner interest has been duly and validly
authorized and issued in accordance with the partnership agreement of the Partnership (as
the same may be amended or restated at or prior to the Closing Date, the “Partnership
Agreement”); and the General Partner owns such general partner interest free and clear
of all Liens (except restrictions on transferability and other Liens as described in the
Disclosure Package and the Final Prospectus or arising under that certain Credit Agreement,
dated February 14, 2007, with Bank of America, N.A., as administrative agent, and other
lenders named therein (as the same will be supplemented, amended or restated at or prior to
the Closing Date and together with the agreements, exhibits, and attachments contemplated or
included therein, the “Credit Agreement”) or the Targa Credit Agreement.
(j) Capitalization; Ownership of Incentive Distribution Rights. As of the date hereof, the
issued and outstanding limited partnership interests of the Partnership consist of
67,980,596 Common Units and the Incentive Distribution Rights (as defined in the
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Partnership
Agreement); the General Partner owns 100% of the Incentive Distribution Rights; all of such
Common Units and Incentive Distribution Rights and the limited partner interests represented
thereby have been duly and validly authorized and issued in accordance with the Partnership
Agreement, and are fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Sections 17-607 and 17-804
of the Delaware Limited Partnership Act (the “Delaware LP Act”)); the General
Partner owns the Incentive Distribution Rights free and clear of all Liens (except
restrictions on transferability and other Liens as described in the Disclosure Package and
the Final Prospectus or arising under the Targa Credit Agreement).
(k) Valid Issuance of the Units. The Units to be purchased by the Underwriters from the
Selling Unitholder have been duly authorized and validly issued in accordance with the
Partnership Agreement and are fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by matters
described in Sections 17-607 and 17-804 of the Delaware LP Act).
(l) Ownership of Material Subsidiaries. All of the issued and outstanding equity interests
of each Material Subsidiary (a) have been duly authorized and validly issued (in accordance
with the bylaws or the general partnership, limited partnership or limited liability company
agreements (collectively, the “Organizational Agreements”) or the certificate of
formation or conversion, certificate or articles of incorporation, or other similar
organizational document (in each case as in effect on the date hereof and as the same may be
amended or restated on or prior to the Closing Date) (collectively with the Organizational
Agreements, the “Organizational Documents”), as applicable, of such Material
Subsidiary), are fully paid (in the case of an interest in a limited partnership or limited
liability company, to the extent required under the Organizational Documents of such
Material Subsidiary) and nonassessable (except (i)
in the case of an interest in a Delaware limited partnership or Delaware limited liability
company, as such nonassessability may be affected by Sections 17-607 and 17-804 of the
Delaware LP Act or Sections 18-607 and 18-804 of the Delaware LLC Act, as applicable, (ii)
in the case of an interest in a limited partnership or limited liability company formed
under the laws of another domestic state, as such nonassessability may be affected by
similar provisions of such state’s limited partnership or limited liability company statute,
as applicable, and (iii) in the case of an interest in an entity formed under the laws of a
foreign jurisdiction, as such nonassessability may be affected by similar provisions of such
jurisdiction’s corporate, partnership or limited liability company statute, if any, as
applicable), other than equity interests that are not owned, directly or indirectly, by the
Partnership, and (b) other than Gulf Coast Fractionators, a Texas general partnership
(“GCF”), Cedar Bayou Fractionators, L.P., a Delaware limited partnership
(“CBF”), and Downstream Energy Ventures Co., L.L.C., a Delaware limited liability
company (“DEV”), are owned, directly or indirectly, by the Partnership, free and
clear of all Liens, other than those arising under the Credit Agreement. The Partnership
owns, directly or indirectly, a 38.75% interest in GCF, an 88% interest in CBF, and an 88%
interest in DEV, in each case free and clear of all Liens except those arising under the
Credit Agreement and the applicable Organizational Documents. The Subsidiaries other than
the Material Subsidiaries did not, individually or in the aggregate, account for (i) more
than 10% of the total assets of the
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Partnership Entities, taken as a whole, as of December
31, 2009 or (ii) more than 10% of the net income of the Partnership Entities, taken as a
whole, for the year ended December 31, 2009.
(m) No Preemptive Rights, Registration Rights or Options. Except for preemptive rights
identified in the Disclosure Package and the Final Prospectus or provided for in the
Organizational Documents of the Partnership, there are no (i) preemptive rights or other
rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of,
any equity securities of the Partnership or (ii) outstanding options or warrants to purchase
any securities of the Partnership, in each case pursuant to any agreement or other
instrument to which the Partnership is a party or by which the Partnership may be bound.
Except for such rights that have been waived or as described in the Disclosure Package and
the Final Prospectus, neither the filing of the Registration Statement nor the offering or
sale of the Units as contemplated by this Agreement gives rise to any rights for or relating
to the registration of any Units or other securities of the Partnership.
(n) Authority and Authorization. On the Closing Date and each settlement date, (i) all
partnership action required to be taken by the Partnership or its partners for the
authorization, sale and delivery of the Units, the execution and delivery by the Partnership
of this Agreement and the transactions contemplated hereby, and (ii) all corporate,
partnership and limited liability company action, as the case may be, required to be taken
by the Partnership Entities or any of their stockholders, members or partners for the
execution and delivery by the Partnership Entities of the Purchase Agreement that are
parties hereto or thereto and the transactions contemplated hereby, shall have been validly
taken. Each party to the
Purchase Agreement has all the requisite power and authority to execute and deliver the
Purchase Agreement and perform its obligations thereunder.
(o) Authorization of this Agreement. This Agreement has been duly authorized, executed and
delivered by or on behalf of the Partnership.
(p) Enforceability of Certain Organizational Agreements. The Organizational Agreements of
the Partnership, the General Partner and the Material Subsidiaries, as applicable, have been
duly authorized, executed and delivered by the parties thereto, and are valid and legally
binding agreements of such parties, enforceable against such parties in accordance with
their terms; provided that, with respect to each agreement described in this Section
1(p), the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting creditors’
rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); provided further;
that the indemnity, contribution and exoneration provisions contained in any of such
agreements may be limited by applicable laws and public policy.
(q) Enforceability of the Purchase Agreement. The Purchase and Sale Agreement dated as
of March 31, 2010 by and between Targa LP Inc., Targa Midstream Holdings LLC, a Delaware
limited liability company (“TMH”), and Targa Permian GP LLC, a Delaware limited
liability company (“Permian GP”), as the sellers, and the
6
Partnership, as the buyer,
as the same may be amended or restated at or prior to the Closing Date (the “Purchase
Agreement”), whereby the Partnership will acquire the following interests: (i) 100% of
the limited partner interests in Targa Midstream Services Limited Partnership, a Delaware
limited partnership (“TMS”), (ii) 100% of the limited liability company interests in
Targa Gas Marketing LLC, a Delaware limited liability company (“TGM”), (iii) 100% of
the limited and general partner interests in Targa Permian LP, a Delaware limited
partnership (“Permian”), (iv) 100% of the limited partner interests in Targa
Straddle LP, a Delaware limited partnership (“Targa Straddle”), and (v) 100% of the
limited liability company interests in Targa Straddle GP LLC, a Delaware limited liability
company (“Targa Straddle GP” and together with TMS, TGM, Permian and Targa Straddle,
the “Purchased Companies”), has been duly authorized, executed and delivered by
Targa LP Inc., TMH, Permian GP and the Partnership and is a valid and legally binding
agreement of TMH, Targa LP Inc., Permian GP and the Partnership, enforceable against Targa
LP Inc., TMH, Permian GP and the Partnership in accordance with its terms; provided
that, with respect to each agreement described in this Section 1(q), the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors’ rights generally and by
general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); provided further; that the indemnity, contribution
and exoneration provisions contained in any of such agreements may be limited by applicable
laws and public policy.
(r) No Conflicts. None of (i) the offering and sale by the Selling Unitholder of the Units,
(ii) the execution, delivery and performance of this Agreement by the Partnership, (iii) the
execution, delivery and performance of the Purchase Agreement by the Partnership Entities
that are parties thereto, or (iv) the consummation of the transactions contemplated by this
Agreement or the Purchase Agreement, (A) conflicts or will conflict with, or constitutes or
will constitute a violation of the Organizational Documents of the Partnership, the General
Partner or the Material Subsidiaries, (B) conflicts or will conflict with, or constitutes or
will constitute a breach or violation of, or a default (or an event that, with notice or
lapse of time or both, would constitute such a default) under any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which the Partnership,
the General Partner or any of the Material Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, (C) violates or will violate any
statute, law or regulation or any order, judgment, decree or injunction of any court or
governmental agency or body directed to the Partnership, the General Partner or any of the
Material Subsidiaries or any of their respective properties in a proceeding to which any of
them or any of their respective property is a party or (D) results or will result in the
creation or imposition of any Lien upon any property or assets of the Partnership, the
General Partner or any of the Material Subsidiaries (other than Liens created pursuant to
the Credit Agreement or the Targa Credit Agreement), which conflicts, breaches, violations,
defaults or Liens, in the case of clauses (B), (C) or (D), would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect or materially impair the
ability of the Partnership to consummate the transactions contemplated by this Agreement or
the Purchase Agreement.
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(s) No Consents. No permit, consent, approval, authorization, order, registration, filing
or qualification of or with any court, governmental agency or body having jurisdiction over
the Partnership, the General Partner or any of the Material Subsidiaries or any of their
respective properties or assets is required in connection with the execution, delivery and
performance of this Agreement by the Partnership, the execution, delivery and performance by
the Partnership Entities that are parties thereto of their respective obligations under the
Purchase Agreement or the consummation of the transactions contemplated by this Agreement or
the Purchase Agreement except (i) for such permits, consents, approvals, registrations,
filings and similar authorizations required under the Act, the Exchange Act and blue sky
laws of any jurisdiction, (ii) for such consents and approvals that have been, or prior to
(x) the Closing Date, in the case of this Agreement, or (y) the closing of the transactions
contemplated by the Purchase Agreement, in the case of the Purchase Agreement, will be,
obtained, (iii) for such consents that, if not obtained, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, and (iv) as disclosed
in the Disclosure Package and the Final Prospectus.
(t) No Defaults.
None of the Partnership, the General Partner or the Material Subsidiaries is in (i)
violation of its Organizational Documents, or of any statute, law, rule or regulation, or
any judgment, order, injunction or decree of any court, governmental agency or body or
arbitrator having jurisdiction over the Partnership, the General Partner or any of the
Material Subsidiaries or any of their respective properties or assets or (ii) breach,
default (or an event which, with notice or lapse of time or both, would constitute such an
event) or violation in the performance of any obligation, agreement or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be bound,
which in the case of either (i) or (ii) would reasonably be expected to have, if continued,
a Material Adverse Effect.
(u) Conformity of Units to Description. The Units conform in all material respects to the
description thereof contained in the Disclosure Package and the Final Prospectus.
(v) No Labor Dispute. No labor problem or dispute with the General Partner’s employees
exists or is threatened or imminent, that could reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the
Final Prospectus.
(w) Financial Statements. The consolidated historical financial statements and schedules of
the Partnership and its consolidated subsidiaries included in the Preliminary Final
Prospectus and the Registration Statement present fairly the financial condition, results of
operations and cash flows of the Partnership 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 summary
historical financial and operating information set forth in the Preliminary Final Prospectus
and the Final Prospectus under the caption “Summary—Summary Consolidated Financial and
Operating Data” is accurately presented in all material
8
respects and prepared on a basis
consistent with the audited and unaudited historical financial statements, as applicable,
from which it has been derived, unless expressly noted otherwise.
(x) Independent Public Accountants. PricewaterhouseCoopers LLP, who has certified certain
financial statements of the Partnership and its consolidated subsidiaries and delivered its
reports with respect to the audited consolidated financial statements and schedules included
in the Disclosure Package and the Final Prospectus, is an independent registered public
accounting firm with respect to the Partnership within the meaning of the Act and the
applicable published rules and regulations thereunder.
(y) Litigation. Except as described in the Disclosure Package and the Final Prospectus,
there is (i) no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or, to the knowledge
of the Partnership, threatened, to which any of the Partnership Entities or the Purchased
Companies is or may be a party or to which the business or property of any of the
Partnership Entities or the Purchased Companies is or may be subject and (ii) no injunction,
restraining order or order of any nature issued by a Federal or state court or foreign court
of competent jurisdiction to which any of the Partnership Entities or the Purchased
Companies is or may be subject, that, in the case of clauses (i) and (ii) above, would
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect,
prevent or result in the suspension of the offering of the Units or draw into question the
validity of this Agreement or the Purchase Agreement.
(z) Title to Properties. The Partnership Entities have good and marketable title to all
real property and good title to all personal property described in the Disclosure Package or
the Final Prospectus as owned by the Partnership Entities, free and clear of all Liens
except (i) as described, and subject to limitations contained, in the Disclosure Package and
the Final Prospectus, (ii) that arise under the Credit Agreement and (iii) such as do not
materially interfere with the use of such properties taken as a whole as they have been used
in the past and are proposed to be used in the future as described in the Disclosure Package
and the Final Prospectus; provided that, with respect to any real property and
buildings held under lease by the Partnership Entities, such real property and buildings are
or will be held under valid and subsisting and enforceable leases with such exceptions as do
not materially interfere with the use of the properties of the Partnership Entities taken as
a whole as they have been used in the past as described in the Disclosure Package and the
Final Prospectus and are proposed to be used in the future as described in the Disclosure
Package and the Final Prospectus.
(aa) Rights-of-Way. The Partnership Entities have such easements or rights-of-way from each
person (collectively, “rights-of-way”) as are necessary to conduct their business in
the manner described, and subject to the limitations contained, in the Disclosure Package
and the Final Prospectus, except for (i) qualifications, reservations and encumbrances that
would not have, individually or in the aggregate, a Material Adverse Effect and (ii) such
rights-of-way that, if not obtained, would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; other than as set forth, and subject to the
limitations contained, in the Disclosure Package and the Final Prospectus, the Partnership
Entities have fulfilled and performed all their material
9
obligations with respect to such
rights-of-way and no event has occurred that allows, or after notice or lapse of time would
allow, revocation or termination thereof or would result in any impairment of the rights of
the holder of any such rights-of-way, except for such revocations, terminations and
impairments that would not reasonably be expected to have a Material Adverse Effect; and,
except as described in the Disclosure Package and the Final Prospectus, none
of such rights-of-way contains any restriction that is materially burdensome to the
Partnership Entities, taken as a whole.
(bb) Ownership of Natural Gas Straddle Business and Other Assets. Subject to the
limitations and other provisions of the Purchase Agreement, the Purchased Companies will
collectively own, directly or indirectly, at the closing of the transactions contemplated by
the Purchase Agreement, (i) the natural gas straddle business of Targa Resources, Inc. and
(ii) certain of Targa Resources, Inc’s natural gas gathering and processing systems,
processing plants and related assets, substantially as described in the Disclosure Package
and the Final Prospectus.
(cc) Transfer Taxes. There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof, required to be
paid in connection with the execution and delivery of this Agreement.
(dd) Tax Returns. Each of the Partnership Entities has filed all foreign, Federal, state
and local tax returns that are required to be filed or has requested extensions thereof,
except in any case in which the failure so to file would not reasonably be expected to have
a Material Adverse Effect except as set forth in or contemplated in the Disclosure Package
and the Final 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 reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Disclosure Package and the Final
Prospectus.
(ee) Insurance. The Partnership Entities carry or are entitled to the benefits of insurance
relating to their assets, with financially sound and reputable insurers, in such amounts and
covering such risks as is commercially reasonable, and all such insurance is in full force
and effect. The Partnership Entities have no reason to believe that they will not be able
to, directly or indirectly (i) renew their existing insurance coverage relating to their
respective assets as and when such policies expire or (ii) obtain comparable coverage
relating to their respective assets from similar institutions as may be necessary or
appropriate to conduct such business as now conducted and at a cost that would not
reasonably be expected to have a Material Adverse Effect.
(ff) Distribution Restrictions. No Subsidiary of the Partnership is currently prohibited,
directly or indirectly, from paying any distributions to the Partnership, from making any
other distribution on such Subsidiary’s equity interests, from repaying to the Partnership
any loans or advances to such Subsidiary from the Partnership or from transferring any of
such Subsidiary’s property or assets to the Partnership or any other Subsidiary of the
Partnership, except (i) as described in or contemplated by the Disclosure Package and the
Final Prospectus, (ii) arising under the Credit Agreement,
10
(iii) such prohibitions mandated by the laws of each
such Subsidiary’s state of formation and the terms of any such Subsidiary’s governing
instruments and (iv) where such prohibition would not reasonably be expected to have a
Material Adverse Effect.
(gg) Possession of Licenses and Permits. The Partnership Entities possess such permits,
licenses, approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate Federal, state, local or foreign regulatory
agencies or bodies necessary to conduct their respective businesses, except where the
failure so to possess would not reasonably be expected to result, singly or in the
aggregate, in a Material Adverse Effect; the Partnership Entities are in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure so to
comply would not reasonably be expected to result, singly or in the aggregate, in a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not reasonably be expected to result, singly
or in the aggregate, in a Material Adverse Effect; and the Partnership Entities have not
received any notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to result in a Material Adverse
Effect.
(hh) Environmental Laws. Each of the Partnership Entities (i) is in compliance with
applicable Federal, state and local laws and regulations relating to the prevention of
pollution or protection of the environment or imposing liability or standards of conduct
concerning any Hazardous Materials (as defined below) (“Environmental Laws”), (ii)
has received all permits required of them under applicable Environmental Laws to conduct
their respective businesses as presently conducted, (iii) is in compliance with all terms
and conditions of any such permits and (iv) does not have any liability in connection with
the release into the environment of any Hazardous Material, except where such noncompliance
with Environmental Laws, failure to receive required permits, failure to comply with the
terms and conditions of such permits or liability in connection with such releases would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
The term “Hazardous Material” means (A) any “hazardous substance” as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
(B) any “hazardous waste” as defined in the Resource Conservation and Recovery Act, as
amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E)
any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any applicable Environmental Law. In the
ordinary course of business, the Partnership Entities periodically review the effect of
Environmental Laws on their business, operations and properties, in the course of which they
identify and evaluate costs and liabilities that are reasonably likely to be incurred
pursuant to such Environmental Laws (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 Entities have reasonably
concluded that such associated costs and liabilities would not reasonably be expected to
have, singly or in the aggregate, a Material Adverse Effect.
11
(ii) ERISA. On the Closing Date and each settlement date, each Partnership Entity will be
in compliance in all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ERISA”); no “reportable event” (as defined in
ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which any
Partnership Entity would have any liability, excluding any reportable event for which a
waiver could apply; no Partnership Entity expects to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the “Code”). None of the
Partnership Entities maintain a “pension plan.”
(jj) Description of Legal Proceedings and Contracts; Filing of Exhibits. There are no legal
or governmental proceedings pending or, to the knowledge of the Partnership, threatened or
contemplated, against any of the Partnership Entities, or to which any of the Partnership
Entities is a party, or to which any of their properties or assets is subject, that are
required to be described in the Registration Statement or the Disclosure Package that are
not described as required, and there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration Statement or the
Disclosure Package or to be filed as an exhibit to the Registration Statement that are not
described or filed as required by the Act or the Exchange Act or the rules and regulations
thereunder.
(kk) Xxxxxxxx-Xxxxx Act of 2002. On and after the Closing Date, the Partnership is in
compliance in all material respects with all applicable provisions of the Xxxxxxxx-Xxxxx Act
of 2002, the rules and regulations promulgated in connection therewith and the rules of the
New York Stock Exchange (the “NYSE”) that are effective and applicable to the
Partnership.
(ll) Investment Company. None of the Partnership Entities is, nor after giving effect to
the offering and sale of the Units and the application of the proceeds thereof as described
in the Disclosure Package and the Final Prospectus, will any of the Partnership Entities be,
an “investment company” or a company “controlled by” an “investment company,” each as
defined in the Investment Company Act of 1940, as amended (the “Investment Company
Act”).
(mm) Books and Records; Internal Controls.
The Partnership 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. The Partnership’s internal
controls over financial reporting are effective and the Partnership is not aware of any
material weakness in its internal control over financial reporting.
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(nn) Disclosure Controls and Procedures. (i) The Partnership maintains disclosure controls
and procedures (to the extent required by and as such term is defined in Rule 13a-15 under
the Exchange Act), (ii) such disclosure controls and procedures are designed to ensure that
the information required to be disclosed by the Partnership in the reports it files or will
file or submit under the Exchange Act, as applicable, is accumulated and communicated to
management of the General Partner, including their respective principal executive officers
and principal financial officers, as appropriate, to allow timely decisions regarding
required disclosure to be made and (iii) such disclosure controls and procedures are
effective in all material respects to perform the functions for which they were established
to the extent required by Rule 13a-15 of the Exchange Act.
(oo) Market Stabilization. None of the Partnership Entities has taken, directly or
indirectly, any action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Partnership to facilitate the sale or
resale of the Units.
(pp) Foreign Corrupt Practices Act. No Partnership Entity nor, to the knowledge of the
Partnership, any director, officer, agent, employee or affiliate of any Partnership Entity
(in their capacity as directors, officers, agents or employees) is aware of or has taken any
action, directly or indirectly, that would result in a violation by such Persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder
(collectively, the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property,
gift, promise to give, or authorization of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the FCPA and the
Partnership Entities and, to the knowledge of the Partnership, their affiliates have
conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.
(qq) Money Laundering Laws. The operations of the Partnership Entities are and have been
conducted at all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving any of the Partnership Entities or the General Partner with respect to
the Money Laundering Laws is pending or, to the best knowledge of the Partnership,
threatened.
(rr) Office of Foreign Assets Control. Neither the Partnership Entities nor, to the
knowledge of the Partnership, any director, officer, agent, employee or affiliate of the
Partnership Entities (in their capacity as directors, officers, agents or employees) is
13
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department.
(ss) No Distribution of Other Offering Materials. None of the Partnership Entities nor the
General Partner has distributed and, prior to the later to occur of the Closing Date or any
settlement date and completion of the distribution of the Units, will distribute any
offering material in connection with the offering and sale of the Units other than any
Preliminary Final Prospectus, the Final Prospectus, any Issuer Free Writing Prospectus to
which the Representative has consented in accordance with this Agreement, any other
materials, if any, permitted by the Act, including Rule 134.
(tt) Listing on the NYSE. On or prior to the Closing Date, the Firm Units will have been
approved to be listed on the NYSE.
Any certificate signed by any officer of the General Partner on behalf of the Partnership and
delivered to the Representatives or counsel for the Underwriters in connection with the offering of
the Units shall be deemed a representation and warranty by the Partnership, as to matters covered
thereby, to each Underwriter.
2. Representations and Warranties of the Selling Unitholder. The Selling Unitholder
represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 2.
(a) Free Writing Prospectuses. Neither the Selling Unitholder nor any person acting on
behalf of the Selling Unitholder (other than, if applicable, the Partnership and
the Underwriters) has used or referred to any Free Writing Prospectus relating to the
Units.
(b) Title to Units. The Selling Unitholder has, and immediately prior to any
settlement date on which the Selling Unitholder is selling Units, will have, good and valid
title to the Units to be sold by the Selling Unitholder hereunder on such settlement date,
free and clear of all Liens except Liens arising under the Targa Credit Agreement.
(c) Delivery of Units. Upon payment for the Units to be sold by the Selling Unitholder,
delivery of such Units, as directed by the Underwriters, to Cede & Co. (“Cede”) or
such other nominee as may be designated by The Depository Trust Company (“DTC”),
registration of such Units in the name of Cede or such other nominee and the crediting of
such Units on the books of DTC to securities accounts of the Underwriters (assuming that
neither DTC nor any such Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the Uniform Commercial Code of the State of New York (the “New York
UCC”) to such Units), (i) DTC shall be a “protected purchaser” of such Units within the
meaning of Section 8-303 of the New York UCC, (ii) under Section 8-501 of the New York UCC,
the Underwriters will acquire a valid security entitlement in respect of such Units and
(iii) no action based on any “adverse claim,” within the meaning of Section 8-102 of the New
York UCC, to such Units may be asserted against the Underwriters with respect to such
security entitlement. For purposes of this representation, the Selling Unitholder may
assume that when such payment, delivery and crediting occur, (A) such Units will have been
registered in the
14
name of Cede or another nominee designated by DTC, in each case on the
Partnership’s unit registry in accordance with the Partnership Agreement and applicable law,
(B) DTC will be registered as a “clearing corporation” within the meaning of Section 8-102
of the New York UCC and (C) appropriate entries to the accounts of the several Underwriters
on the records of DTC will have been made pursuant to the New York UCC.
(d) Formation. The Selling Unitholder has been duly incorporated and is validly
existing and in good standing as a corporation under the General Corporation Law of the
State of Delaware (the “DGCL”) with full corporate power and authority to own or
lease its properties and to conduct the businesses in which it is engaged.
(e) Power and Authority. On each settlement date, the Selling Unitholder will have all
requisite corporate power and authority to sell and deliver the Units, in accordance with
and upon the terms and conditions set forth in this Agreement, the Partnership Agreement,
the Disclosure Package and the Final Prospectus. On each settlement date, all corporate
action required to be taken by the Selling Unitholder or any of its stockholders for the
sale and delivery of the Units, the execution and delivery by the Selling Unitholder of this
Agreement and the consummation of the transactions contemplated hereby shall have been
validly taken.
(f) Authorization of this Agreement. This Agreement has been duly authorized, executed
and delivered by or on behalf of the Selling Unitholder.
(g) No Conflicts. None of (i) the offering and sale by the Selling Unitholder of the
Units, (ii) the execution, delivery and performance of this Agreement by the
Selling Unitholder, or (iii) the consummation of the transactions contemplated by this
Agreement, (A) conflicts or will conflict with, or constitutes or will constitute a
violation of, the provisions of the certificate of incorporation or bylaws of the Selling
Unitholder, (B) conflicts or will conflict with, or constitutes or will constitute a breach
or violation of or a default (or an event that, with notice or lapse of time or both, would
constitute such a default) under any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which the Selling Unitholder is a party, by which
the Selling Unitholder is bound or to which any of its properties or assets is subject, (C)
violates or will violate any statute, law or regulation or any order, judgment, decree or
injunction of any court or governmental agency or body directed to the Selling Unitholder or
any of its properties in a proceeding to which the Selling Unitholder or any of its
properties is a party, or (D) results or will result in the creation or imposition of any
Lien upon any property or assets of the Selling Unitholder (other than Liens created
pursuant to the Targa Credit Agreement), which conflicts, breaches, violations, defaults or
Liens, in the case of clauses (B), (C) or (D), would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the Selling Unitholder or
materially impair the ability of the Selling Unitholder to perform its obligations under
this Agreement.
(h) No Consents. No permit, consent, approval, authorization, order, registration,
filing or qualification of or with any court, governmental agency or body having
jurisdiction over the Selling Unitholder or any of its properties or assets is required in
connection with the execution, delivery and performance of this Agreement by the Selling
Unitholder, or the consummation of the transactions contemplated by this
15
Agreement except
(i) for such permits, consents, approvals, registrations, filings and similar authorizations
required under the Act, the Exchange Act and blue sky laws of any jurisdiction, (ii) for
such consents and approvals that have been, or prior to the Closing Date will be, obtained,
(iii) for such consents that, if not obtained, would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the Selling Unitholder, and (iv)
as disclosed in the Disclosure Package and the Final Prospectus.
(i) Information Concerning Partnership Entities. The Selling Unitholder is not
prompted to sell the Units by any information concerning any of the Partnership Entities
that is not set forth in the Registration Statement, the Disclosure Package and the Final
Prospectus.
(j) Market Stabilization. None of the Selling Unitholder or, to the knowledge of the
Selling Unitholder, any of its affiliates has taken, nor will the Selling Unitholder or, to
the knowledge of the Selling Unitholder, any of its affiliates take, directly or indirectly,
any action designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Partnership to facilitate the sale or resale of the Units.
Any certificate signed by or on behalf of the Selling Unitholder and delivered to the
Representatives or counsel for the Underwriters in connection with the offering of the Units shall
be deemed a representation and warranty by the Selling Unitholder, as to matters covered thereby,
to each Underwriter.
3. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Selling Unitholder agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Selling
Unitholder, at a purchase price of $26.40 per unit, the amount of the Firm Units set forth opposite
such Underwriter’s name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Selling Unitholder hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to 1,275,000 Option Units at the
same purchase price per unit as the Underwriters shall pay for the Firm Units. Said option
may be exercised only to cover over-allotments in the sale of the Firm Units by the
Underwriters. Said option may be exercised in whole or in part at any time on or before the
30th day after the date of the Final Prospectus upon written or telegraphic notice by the
Representatives to the Selling Unitholder and the Partnership setting forth the number of
Option Units as to which the several Underwriters are exercising the option and the
settlement date. The number of Option Units to be purchased by each Underwriter shall be
the same percentage of the total number of Option Units to be purchased by the several
Underwriters as such Underwriter is purchasing of the Firm Units, subject to such
adjustments as the Representatives in their absolute discretion shall make to eliminate any
fractional Common Units.
16
4. Delivery and Payment. Delivery of and payment for the Firm Units and the Option Units (if
the option provided for in Section 3(b) hereof shall have been exercised on or before the third
Business Day immediately preceding the Closing Date) shall be made at 10:00 AM, New York City time,
on April 14, 2010, or at such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may be postponed by
agreement among the Representatives, the Selling Unitholder and the Partnership or as provided in
Section 11 hereof (such date and time of delivery and payment for the Units being herein called the
“Closing Date”). Delivery of the Units shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the Selling Unitholder by
wire transfer payable in same-day funds to an account specified by the Selling Unitholder.
Delivery of the Firm Units and the Option Units shall be made through the facilities of DTC unless
the Representatives shall otherwise instruct.
If the option provided for in Section 3(b) hereof is exercised after the third Business Day
immediately preceding the Closing Date, the Selling Unitholder will deliver the Option Units (at
the expense of the Selling Unitholder) to the Representatives, at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, xx the date specified by the Representatives (which shall be within three Business Days after
exercise of said option) for the respective accounts of the several Underwriters, against payment
by the several Underwriters through the Representatives of the purchase price thereof to or upon
the order of the Selling Unitholder by wire transfer payable in same-day funds to an account
specified by the Selling Unitholder. If settlement for the Option Units occurs after the Closing
Date, the Selling Unitholder and the Partnership will deliver to the Representatives on the settlement date for the Option Units, and the obligation
of the Underwriters to purchase the Option Units shall be conditioned upon receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions, certificates and
letters delivered on the Closing Date pursuant to Section 8 hereof.
5. Offering by Underwriters. It is understood that the several Underwriters propose to offer
the Units for sale to the public as set forth in the Final Prospectus.
6. Agreements of the Partnership and the Underwriters. The Partnership agrees with the
several Underwriters that:
(a) Preparation of Final Prospectus and Registration Statement. Prior to the termination of the
offering of the Units, the Partnership will not file any amendment of the Registration
Statement or supplement to the Final Prospectus unless the Partnership has furnished the
Representatives a copy for their review prior to filing and will not file any such proposed
amendment, supplement or filing to which the Representatives reasonably object, unless the
Partnership shall have determined based upon the advice of counsel that such amendment,
supplement or filing is required by law. The Partnership will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed in a form approved by the
Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed. The Partnership will promptly advise the Representatives
(i) when the Final Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of
the offering of the Units, any amendment to the Registration Statement shall have been filed
or become effective, (iii) of any
17
request by the Commission or its staff for any amendment of the Registration Statement, for any supplement to the Final Prospectus or for any
additional information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any notice objecting to its use or the
institution or threatening of any proceeding for that purpose and (v) of the receipt by the
Partnership of any notification with respect to the suspension of the qualification of the
Units for sale in any jurisdiction or the institution or threatening of any proceeding for
such purpose. The Partnership will use its best efforts to prevent the issuance of any such
stop order or the occurrence of any such suspension or objection to the use of the
Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain
as soon as possible the withdrawal of such stop order or relief from such occurrence or
objection, including, if necessary, by filing an amendment to the Registration Statement or
a new registration statement and using its commercially reasonable best efforts to have such
amendment or new registration statement declared effective as soon as practicable.
(b) Amendment or Supplement of Disclosure Package and Issuer Free Writing Prospectuses. If there occurs an event or development as a result of which the Disclosure Package or
any Issuer Free Writing Prospectus would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made at such time, not misleading, the Partnership
will (i) notify promptly the Representatives so that any use of the Disclosure Package or
the Issuer Free Writing Prospectus, as the case may be, may cease until it is amended or
supplemented; (ii) amend or supplement the Disclosure Package or the Issuer Free Writing
Prospectus, as the case may be, to correct such statement, omission or conflict; and (iii)
supply any amendment or supplement to the Representatives in such quantities as they may
reasonably request.
(c) Amendment of Registration Statement or Supplement of Prospectus. If, at any time when a
prospectus relating to the Units is required to be delivered under the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), any event
occurs as a result of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made or the
circumstances then prevailing, not misleading, or if it shall be necessary to amend the
Registration Statement, file a new registration statement or supplement the Final
Prospectus to comply with the Act or the rules thereunder, the Partnership promptly will (i)
notify the Representatives of any such event; (ii) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 6, an amendment or
supplement or new registration statement which will correct such statement or omission or
effect such compliance; and (iii) supply any supplemented Final Prospectus to the
Representatives in such quantities as they may reasonably request.
(d) Reports to Unitholders. The Partnership will make generally available to its unitholders
and to the Representatives an earnings statement or statements of the Partnership and its
subsidiaries which will satisfy, on a timely basis, the provisions of Section 11(a) of the
Act and Rule 158 under the Act.
18
(e) Signed Copies of the Registration Statement and Copies of the Final Prospectus. The
Partnership will furnish to each of the Representatives and counsel for the Underwriters,
upon request and without charge, one copy of the executed Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172), as many copies of each Preliminary Final Prospectus, the
Final Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the
Representatives may reasonably request.
(f) Qualification of Units in Certain Jurisdictions. The Partnership will arrange, if necessary, for the qualification of the Units for sale
under the laws of such jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution of the Units;
provided that in no event shall the Partnership be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising out of the
offering or sale of the Units, in any jurisdiction where it is not now so subject.
(g) Lock-Up Period. The Partnership will not, without the prior written consent of Barclays
Capital Inc. (“Barclays”), 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, and each executive
officer and director of the General Partner), directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act, any Common 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 45 days after
the date of the Underwriting Agreement (the “Lock-Up Period”); provided,
however, that (i) the Partnership may issue and sell Common Units pursuant to any
employee benefit plan of the Partnership in effect at the Execution Time, (ii) the
Partnership may issue Common Units issuable upon the conversion, vesting or exercise of
securities or the exercise of warrants outstanding at the Execution Time, (iii) the
Partnership may issue Common Units or any securities convertible or exchangeable into Common
Units as payment of any part of the purchase price for businesses that are acquired by the
Partnership and its affiliates or any third parties, provided that any recipient of
such Common Units must agree in writing to be bound by the terms of this Section 6(g) for
any remaining term of the Lock-Up Period, and (iv) the Partnership Entities may file one or
more shelf registration statements on Form S-3, including an automatic shelf registration
statement, provided that the Partnership shall otherwise remain subject to the restrictions
set forth in this Section 6(g) with respect to any Common Units or any securities
convertible into, or exercisable or exchangeable for, Common Units registered thereunder.
(h) Price Manipulation. The Partnership will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to
19
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any
security of the Partnership to facilitate the sale or resale of the Units.
(i) Expenses. The Partnership agrees to pay the costs and expenses relating to the following
matters: (i) the preparation, printing or reproduction and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto), each Preliminary Final Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Final Prospectus, the Final
Prospectus and each Issuer Free Writing Prospectus, and all amendments or supplements to any
of them, as may, in each case, be reasonably requested for use in connection with the
offering and sale of the Units; (iii) the preparation, printing, authentication, and
delivery of certificates for the Units, including any stamp or transfer taxes in connection
with the sale of the Units; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Units; (v) the registration
of the Units under the Exchange Act and the listing of the Units on the NYSE; (vi) any
registration or qualification of the Units for offer and sale under the securities or blue
sky laws of the several states (including filing fees and the reasonable fees and expenses
of counsel for the Underwriters relating to such registration and qualification); (vii) any
filing fees in connection with any filings required to be made with the Financial Industry
Regulatory Authority, Inc.; (viii) the transportation and other expenses incurred by or on
behalf of the Partnership’s representatives in connection with presentations to prospective
purchasers of the Units; (ix) the fees and expenses of the Partnership’s accountants and the
fees and expenses of counsel (including local and special counsel) for the Partnership; and
(x) all other costs and expenses incident to the performance by the Partnership and the
Selling Unitholder of their obligations hereunder.
It is understood, however, that except as otherwise provided in this Section 6 or in
Section 9 hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, transfer taxes on any resale of the Units by any Underwriter, any
advertising expenses connected with any offers they may make and the transportation and
other expenses incurred by the Underwriters on their own behalf in connection with
presentations to prospective purchasers of the Units.
(j) Free Writing Prospectuses. The Partnership agrees that, unless it has or shall have
obtained the prior written consent of the Representatives, and each Underwriter, severally
and not jointly, agrees with the Partnership that, unless it has or shall have obtained, as
the case may be, the prior written consent of the Partnership, it has not made and will not
make any offer relating to the Units that would constitute an Issuer Free Writing Prospectus
or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405)
required to be filed by the Partnership with the Commission or retained by the Partnership
under Rule 433; provided that the prior written consent of the parties hereto shall
be deemed to have been given in respect of the Free Writing Prospectuses included in
Schedule IV hereto, if any, and any electronic road show. Any such free writing
prospectus consented to by the Representatives or the Partnership is
20
hereinafter referred to as a “Permitted Free Writing Prospectus.” The Partnership agrees that (i) it has
treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be,
with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely
filing with the Commission, legending and record keeping.
7. Agreements of the Selling Unitholder. The Selling Unitholder agrees that:
(a) Lock-Up Period. During the Lock-Up Period, the Selling Unitholder will not,
without the prior written consent of Barclays, 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 Selling
Unitholder), directly or indirectly, including the filing (or participation in the filing)
of a registration statement with the Commission in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any Common Units or any securities convertible
into, or exercisable, or exchangeable for, Common Units (other than the Units), or publicly
announce an intention to effect any such transaction.
(b) Free Writing Prospectuses. The Selling Unitholder will not use or refer to, or
permit any person acting on its behalf (other than, if applicable, the Partnership and the
Underwriters) to use or refer to, any Free Writing Prospectus relating to the Units.
(c) Price Manipulation. The Selling Unitholder will not take, directly or indirectly,
any action designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Partnership to facilitate the sale or resale of the Units.
(d) Form W-9. The Selling Unitholder shall deliver to the Representatives prior to the
Closing Date a properly completed and executed United States Treasury Department Form W-9 or
other applicable form.
8. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to
purchase the Firm Units and the Option Units, as the case may be, shall be subject to the accuracy
of the representations and warranties on the part of the Partnership and the Selling Unitholder
contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 4 hereof, to the accuracy of the statements of the Partnership and the Selling Unitholder
made in any certificates pursuant to the provisions hereof, to the performance by the Partnership
and the Selling Unitholder of their respective obligations hereunder and to the following
additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been filed in the manner and
within the time period required by Rule 424(b); any material required to be filed by the
Partnership pursuant to Rule 433(d) under the Act shall have been filed with the Commission
within the applicable time periods prescribed for such filings by Rule
21
433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to
its use shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Partnership shall have requested and caused Xxxxxx & Xxxxxx L.L.P., counsel for
the Partnership, to have furnished to the Representatives their opinion, dated the Closing
Date and addressed to the Representatives, to the effect that:
(i) Formation and Qualification. Each of the Partnership, the General Partner
and the Material Subsidiaries (other than GCF, Targa Liquids Marketing and
Trade, a Delaware general partnership, and Targa Liquids Inc., a British
Columbia corporation (“Targa Canada”)) has been duly incorporated,
formed or organized, as the case may be, and is validly existing as a
limited partnership, limited liability company or corporation, as
applicable, and is in good standing under the laws of its respective
jurisdiction of formation or incorporation with full power and authority
necessary to own or lease its properties and to conduct its business, in
each case as described in the Disclosure Package and the Final Prospectus,
in all material respects.
(ii) Power and Authority to Act as a General Partner. The General Partner has
full limited liability company power and authority to act as general partner
of the Partnership in all material respects as described in the Disclosure
Package and Final Prospectus. The Operating GP has full limited liability
company power and authority to act as general partner of the Operating
Partnership in all material respects as described in the Disclosure Package
and Final Prospectus.
(iii) Ownership of the General Partner. TGPI owns all of the issued and
outstanding membership interests of the General Partner; such membership
interests have been duly authorized and validly issued in accordance with
the GP LLC Agreement, and are fully paid (to the extent required by the GP
LLC Agreement) and nonassessable (except as such nonassessability may be
affected by Sections 18-607 and 18-804 of the Delaware LLC Act); and TGPI
owns such membership interests free and clear of all Liens (other than (a)
those created by or arising under the laws of the State of Delaware, (b)
restrictions on transferability and other Liens described in the Disclosure
Package, the Final Prospectus or the GP LLC Agreement, (c) those arising
under the Targa Credit Agreement and (d) those imposed by the Act and the
securities or “Blue Sky” laws of certain jurisdictions) (i) in respect of
which a financing statement under the Uniform Commercial Code of the State
of Delaware naming TGPI as debtor is on file as of a recent date in the
office of the Secretary of State of the State of Delaware or (ii) otherwise
known to such counsel, without independent investigation.
(iv) Ownership of the General Partner Interest in the Partnership. The General Partner is the sole general partner of the
22
Partnership with a 2.0% general partner interest in the Partnership; such general partner
interest has been duly and validly authorized and issued in accordance with
the Partnership Agreement; and the General Partner owns such general partner
interest free and clear of all Liens (other than (a) those created by or
arising under the laws of the State of Delaware, (b) restrictions on
transferability and other Liens described in the Disclosure Package, the
Final Prospectus or the Partnership Agreement, (c) those arising under the
Targa Credit Agreement and (d) those imposed by the Act and the securities
or “Blue Sky” laws of certain jurisdictions) (i) 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 as of a recent date
in the office of the Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel, without independent investigation.
(v) Capitalization; Ownership of Incentive Distribution Rights. As of the date
hereof, the issued and outstanding limited partnership interests of the
Partnership consist of 67,980,596 Common Units and the Incentive
Distribution Rights; the General Partner owns 100% of the Incentive
Distribution Rights; all of such Common Units and Incentive Distribution
Rights and the limited partner interests represented thereby (including the
Units being sold hereunder by the Selling Unitholder) have been duly and
validly authorized and issued in accordance with the Partnership Agreement,
and are fully paid (to the extent required under the Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by
Sections 17-607 and 17-804 of the Delaware LP Act); and the General Partner
owns the Incentive Distribution Rights free and clear of all Liens (other
than (a) those created by or arising under the laws of the State of
Delaware, (b) restrictions on transferability and other Liens described in
the Disclosure Package, the Final Prospectus or the Partnership Agreement,
(c) those arising under the Targa Credit Agreement and (d) those imposed by
the Act and the securities or “Blue Sky” laws of certain jurisdictions) (i)
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 as
of a recent date in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation.
(vi) No Preemptive Rights, Registration Rights or Options. Except for preemptive
rights identified in the Disclosure Package and the Final Prospectus, there
are no outstanding options, warrants, preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any equity securities of the Partnership, in each case pursuant
to the Organizational Documents of the Partnership or any agreement or instrument listed as an exhibit to the
Registration Statement, in either case to which the Partnership is a party
or by which it may be bound. Neither the filing of the Registration
Statement nor the
23
offering or sale of the Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of
any Units or other securities of the Partnership pursuant to any agreements
or instruments listed as an exhibit to the Registration Statement other than
as described in the Disclosure Package and the Final Prospectus, as set
forth in the Partnership Agreement or as have been waived.
(vii) Ownership of Material Subsidiaries. All of the issued and outstanding
equity interests (other than general partner interests) of each Material
Subsidiary (other than GCF, CBF, DEV and Targa Canada) (a) have been duly
authorized and validly issued (in accordance with the Organizational
Documents of such Material Subsidiary), are fully paid (in the case of an
interest in a limited partnership or limited liability company, to the
extent required under the Organizational Documents of such Material
Subsidiary) and nonassessable (except (i) in the case of an interest in a
Delaware limited partnership or Delaware limited liability company, as such
nonassessability may be affected by Sections 17-607 and 17-804 of the
Delaware LP Act or Sections 18-607 and 18-804 of the Delaware LLC Act, as
applicable, (ii) in the case of an interest in a limited partnership or
limited liability company formed under the laws of another domestic state,
as such nonassessability may be affected by similar provisions of such
state’s limited partnership or limited liability company statute, as
applicable) and (b) are owned, directly or indirectly, by the Partnership,
free and clear of all Liens (other than (i) those created by or arising
under the corporate, limited liability company or partnership laws of the
jurisdiction of formation or incorporation of the respective Material
Subsidiary, as the case may be; (ii) restrictions on transferability and
other Liens described in the Disclosure Package, the Final Prospectus or the
Organizational Documents; (iii) those arising under the Credit Agreement;
and (iv) those imposed by the Act and the securities or “Blue Sky” laws of
certain jurisdictions) (A) in respect of which a financing statement under
the Uniform Commercial Code of the States of Delaware or Texas naming the
Partnership as debtor or, in the case of equity interests of a Material
Subsidiary owned directly by one or more other Material Subsidiary, naming
any such other Material Subsidiary as debtor(s), is on file as of a recent
date in the office of the Secretary of State of the States of Delaware or
Texas or (B) otherwise known to such counsel, without independent
investigation.
(viii) Ownership of GP Interests in Material Subsidiaries. All outstanding general
partner interests in each Material Subsidiary that is a partnership (other
than GCF and CBF) have been duly authorized and validly issued in accordance with the Organizational Documents of such
Material Subsidiary and are owned, directly or indirectly, by the
Partnership, free and clear of all Liens (other than (i) those created by or
arising under the partnership laws of the jurisdiction of formation of the
respective Material Subsidiary; (ii) restrictions on transferability and
other Liens described in the Disclosure Package, the Final Prospectus or the
24
Organizational Documents; (iii) those arising under the Credit Agreement;
and (iv) those imposed by the Act and the securities or “Blue Sky” laws of
certain jurisdictions) (A) in respect of which a financing statement under
the Uniform Commercial Code of the States of Delaware or Texas naming the
Partnership as debtor or, in the case of general partner interests of a
Material Subsidiary owned directly by one or more other Material Subsidiary,
naming any such other Material Subsidiary as debtor(s), is on file in the
office of the Secretary of State of the States of Delaware or Texas or (B)
otherwise known to such counsel, without independent investigation.
(ix) Authority and Authorization. On or prior to the Closing Date, (i) all
partnership action required to be taken by the Partnership or its partners
for the sale and delivery of the Units, the execution and delivery by the
Partnership of this Agreement and the consummation of the transactions
contemplated by this Agreement to be completed, and (ii) all corporate,
partnership and limited liability company action, as the case may be,
required to be taken by the Partnership Entities or any of their
stockholders, members or partners for the execution and delivery by the
Partnership Entities of the Purchase Agreement that are parties hereto or
thereto and the transactions contemplated hereby, has been validly taken.
(x) Authorization of this Agreement. This Agreement has been duly authorized,
executed and delivered by the Partnership.
(xi) Enforceability of Organizational Agreements. The Organizational Agreements
of the Partnership, the General Partner and the Material Subsidiaries (other
than Targa Canada) have been duly authorized, executed and delivered by the
Partnership, the General Partner and the Material Subsidiaries (other than
Targa Canada), if applicable, and are valid and legally binding agreements
of the Partnership, the General Partner and the Material Subsidiaries (other
than Targa Canada), as applicable, enforceable against Partnership, the
General Partner and the Material Subsidiaries (other than Targa Canada), as
applicable, in accordance with their terms; provided that, with
respect to each of the Organizational Agreements, the enforceability thereof
may be limited by (i) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (ii) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(xii) Enforceability of the Purchase Agreement. The Purchase Agreement
has been duly authorized, executed and delivered by the parties thereto and
is a valid and legally binding agreement of the parties thereto, enforceable
against the parties thereto in accordance with its terms; provided
that the enforceability of the Purchase Agreement may be
25
limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors’ rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (ii) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(xiii) No Conflicts. None of (i) the offering and sale by the Selling Unitholder
of the Units, (ii) the execution, delivery and performance of this Agreement
by the Partnership, or (iii) the execution, delivery and performance of the
Purchase Agreement by the Partnership Entities that are parties thereto, (A)
constitutes or will constitute a violation of the Organizational Documents
of the Partnership, the General Partner or the Material Subsidiaries (other
than Targa Canada), (B) conflicts or will conflict with or constitutes or
will constitute a breach or violation of, or a default (or an event that,
with notice or lapse of time or both, would constitute such a default) under
any agreement or other instrument filed as an exhibit to the Registration
Statement or any document incorporated by reference therein or the Targa
Credit Agreement, (C) violates or will violate the Delaware LP Act, the
Delaware LLC Act, the DGCL, the laws of the State of Texas or Federal law,
(D) violates or will violate any order, judgment, decree or injunction of
any court or governmental agency or other authority known to such counsel
having jurisdiction over the Partnership, the General Partner or the
Material Subsidiaries (other than Targa Canada) or any of their properties
or assets in a proceeding to which any of them or their property is a party
or (E) results or will result in the creation or imposition of any Lien
pursuant to any agreement filed as an exhibit to the Registration Statement
or any document incorporated by reference therein upon any property or
assets of the Partnership, the General Partner or the Material Subsidiaries
(other than Targa Canada) (other than Liens created pursuant to the Credit
Agreement or the Targa Credit Agreement), which conflicts, breaches,
violations, defaults or Liens, in the case of clauses (B), (C), (D) or (E),
would reasonably be expected to have a Material Adverse Effect or a material
adverse effect on the ability of the Partnership to consummate the
transactions provided for in this Agreement or contemplated by the Purchase Agreement; provided, however, that no opinion
need be expressed pursuant to this paragraph with respect to Federal or
state securities laws and other anti-fraud laws.
(xiv) No Consents. No permit, consent, approval, authorization, order,
registration, filing or qualification under the Delaware LP Act, the
Delaware LLC Act, the DGCL, Texas law or Federal law is required in
connection with the execution, delivery and performance of this Agreement by
the Partnership and the Purchase Agreement by the Partnership Entities that
are parties thereto, or the consummation of the transactions contemplated by
this Agreement or the Purchase Agreement except (i) for such permits,
consents, approvals and similar authorizations
26
required under the Act, the Exchange Act, and state securities or “Blue Sky” laws, as to which such
counsel need not express any opinion, (ii) for such consents which have been
obtained or made, (iii) for such consents which, if not obtained, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or (iv) as disclosed in the Disclosure Package and the Final
Prospectus.
(xv) Effectiveness of Registration Statement. The Registration Statement has
become effective under the Act; any required filing of the Final 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 the
Registration Statement or any notice objecting to its use has been issued
and no proceedings for that purpose have been instituted or threatened.
(xvi) Form of Registration Statement and Final Prospectus. The Registration
Statement, on the Effective Date, and the Final Prospectus, when filed with
the Commission pursuant to Rule 424(b) and on the Closing Date, were, on
their face, appropriately responsive, in all material respects, to the
requirements of the Act, except that in each case such counsel need express
no opinion with respect to the financial statements or other financial and
statistical data contained in or omitted from the Registration Statement or
the Final Prospectus.
(xvii) Description of Common Units. The statements included in the Registration
Statement and Preliminary Final Prospectus under the captions “Summary—The
Offering,” “Description of our Common Units,” “The Partnership Agreement”
and “Cash Distribution Policy” insofar as they purport to constitute
summaries of the terms of the Common Units (including the Units), are
accurate summaries of the terms of such Common Units in all material
respects.
(xviii) Descriptions and Summaries. The statements included in the Registration
Statement and the Disclosure Package under the captions “Cash Distribution
Policy,” “The Partnership Agreement,” “Investment in Targa Resources
Partners LP by Employee Benefit Plans” and “Underwriting” and under the
caption “Certain Relationships and Related Transactions, and Director
Independence,” in the Partnership’s Annual Report on Form 10-K for the year
ended December 31, 2009 (“2009 Annual Report”) insofar as they
purport to constitute summaries of the terms of Federal or Texas statutes,
rules or regulations or the Delaware LP Act, the Delaware LLC Act or the
DGCL, any legal and governmental proceedings or any contracts, constitute
accurate summaries of the terms of such statutes, rules and regulations,
legal and governmental proceedings and contracts in all material respects.
The description of the Federal statutes, rules and regulations set forth in
the 2009 Annual Report under “Business—Regulation of Operations” and
“Business—Environmental,
27
Health and Safety Matters” constitute accurate summaries of the terms of such statutes, rules and regulations in all
material respects.
(xix) Tax Opinion. The opinion of Xxxxxx & Xxxxxx L.L.P. that is filed as Exhibit
8.1 to the Registration Statement is confirmed and the Underwriters may rely
upon such opinion as if it were addressed to them.
(xx) Investment Company. 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 Disclosure Package and the Final Prospectus, will not
be, an “investment company” as defined in the Investment Company Act.
In rendering such opinion, such counsel may (i) rely in respect of matters of fact upon
certificates of officers and employees of the Targa Parties and upon information obtained from
public officials to the extent such counsel deems reasonable, (ii) assume that all documents
submitted to such counsel as originals are authentic, that all copies submitted to such counsel
conform to the originals thereof, and that the signatures on all documents examined by such counsel
are genuine, (iii) state that its opinion is limited to matters governed by Federal law and the
Delaware LP Act, Delaware LLC Act and the DGCL and the laws of the State of Texas, (iv) with
respect to the opinions expressed as to the due qualification or registration as a foreign limited
partnership or limited liability company, as the case may be, of the Partnership Entities, state
that such opinions are based upon certificates of foreign qualification or registration provided by
the Secretary of State of the States listed on an annex to be attached to such counsel’s opinion
(each of which shall be dated as of a date not more than fourteen days prior to the Closing Date
and shall be provided to counsel to the Underwriters) and (v) state that they express no opinion
with respect to (A) any permits to own or operate any real or personal property or (B) state or
local taxes or tax statutes to which any of the limited partners of the Partnership or any of the Targa Parties may be subject. Such counsel may exclude any
non-wholly-owned entities from its opinion regarding ownership of Material Subsidiaries.
In addition, such counsel shall state that they have participated in conferences with officers
and other representatives of the Partnership, the independent public accountants of the Partnership
and the Underwriters’ representatives, at which the contents of the Registration Statement, the
Disclosure Package and the Final Prospectus and related matters were discussed, and although such
counsel has not independently verified, is not passing upon, and is not assuming any responsibility
for the accuracy, completeness or fairness of the statements contained in, the Registration
Statement, the Disclosure Package and the Final Prospectus (except to the extent specified in the
foregoing opinion), based on the foregoing, no facts have come to such counsel’s attention that
lead such counsel to believe that:
(A) the Registration Statement, as of the Effective Date, 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 not misleading,
(B) the Disclosure Package, as of the Execution Time, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, or
28
(C) the Final Prospectus, as of its date and on the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading;
it being understood that such counsel expresses no statement or belief with respect to (i) the
financial statements and related schedules, including the notes and schedules thereto and the
auditor’s report thereon, or any other financial and accounting information, included in the
Registration Statement or the Final Prospectus or the Disclosure Package, and (ii) representations
and warranties and other statements of fact included in the exhibits to the Registration Statement
or any document incorporated by reference therein.
(c) The Selling Unitholder shall have requested and caused Xxxxxx & Xxxxxx L.L.P.,
counsel for the Selling Unitholder, to have furnished to the Representatives their opinion,
dated the Closing Date and addressed to the Representatives, to the effect that:
(i) Formation. The Selling Unitholder has been duly incorporated and
is validly existing and in good standing as a corporation under the DGCL
with full corporate power and authority to own or lease its properties and
to conduct the businesses in which it is engaged.
(ii) Power and Authority. The Selling Unitholder has all requisite
power and authority to sell and deliver the Units, in accordance with and
upon the terms and conditions set forth in this Agreement, the Partnership
Agreement, the Disclosure Package and the Final Prospectus. All corporate
action required to be taken by the Selling Unitholder or any of its
stockholders for the sale and delivery of the Units, the execution and
delivery by the Selling Unitholder of this Agreement and the consummation of the transactions contemplated by this Agreement has
been validly taken.
(iii) Authorization of this Agreement. This Agreement has been duly and
validly authorized, executed and delivered by the Selling Unitholder.
(iv) Title to Units. Immediately prior to the Closing Date, the Selling
Unitholder was the sole registered owner of the Units, free and clear of all
Liens (except restrictions on transferability contained in the Partnership
Agreement, as described in the Disclosure Package or created or arising
under the Delaware LP Act or those arising under the Targa Credit Agreement)
(i) in respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Selling Unitholder as debtor is on
file with the Secretary of State of the State of Delaware or (ii) otherwise
known to such counsel, without independent investigation.
(v) Delivery of Units. Upon the payment for the Units to be sold by the
Selling Unitholder, the delivery of such Units, as directed by
29
the Underwriters, to Cede or such other nominee as may be designated by DTC, the
registration of such Units in the name of Cede or such other nominee and the
crediting of such Units on the books of DTC to “securities accounts” (within
the meaning of Section 8-501(a) of the New York UCC) of the Underwriters
(assuming that neither DTC nor any Underwriter has “notice of an adverse
claim” (within the meaning of Section 8-105 of the New York UCC) to such
Units) (i) the Underwriters will acquire a “security entitlement” (within
the meaning of Section 8-102(a)(17) of the New York UCC) in respect of such
Units and (ii) no action based on any “adverse claim” (within the meaning of
Section 8-102(a)(1) of the New York UCC) to such Units may be asserted
against the Underwriters with respect to such “security entitlement.”
(vi) No Conflicts. None of the execution, delivery and performance of
this Agreement by the Selling Unitholder (i) constitutes or will constitute
a violation of the certificate of incorporation or bylaws of the Selling
Unitholder, (ii) constitutes or will constitute a breach or violation of or
a default under (or an event that, with notice or lapse of time or both,
would constitute such a breach or violation of or default under), any
agreement filed as an exhibit to the Registration Statement or any document
incorporated by reference therein to which the Selling Unitholder is a party
or (iii) violates or will violate the DGCL, the laws of the States of Texas
or New York or Federal law, excluding in the case of clauses (ii) and (iii)
any such breaches, violations and defaults that would not reasonably be
expected to have a material adverse effect on the Selling Unitholder or
materially impair the ability of the Selling Unitholder to consummate the
transactions provided for in this Agreement.
(vii) No Consents. No permit, consent, approval, authorization, order,
registration, filing or qualification under the DGCL, Texas law, New York
law or Federal law is required in connection with the execution, delivery
and performance of this Agreement by the Selling Unitholder, or the
consummation of the transactions contemplated by this Agreement, except (i)
for such permits, consents, approvals and similar authorizations required
under the Act, the Exchange Act and state securities or “Blue Sky” laws, as
to which such counsel need not express any opinion, (ii) for such consents
which have been obtained or made, (iii) for such consents which, if not
obtained, would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the Selling Unitholder or (iv)
as disclosed in the Disclosure Package and the Final Prospectus.
In rendering such opinion, such counsel may (i) rely in respect of matters of fact upon
certificates of officers and employees of the Selling Unitholder and upon information obtained from
public officials to the extent such counsel deems reasonable, (ii) assume that all documents
submitted to such counsel as originals are authentic, that all copies submitted to such counsel
conform to the originals thereof, and that the signatures on all documents examined by such counsel
are genuine, (iii) state that its opinion is limited to matters governed by Federal law
30
and the DGCL and the laws of the States of Texas and New York, and (iv) state that they express no opinion
with respect to the title of the Selling Unitholder to any of its real or personal property or the
accuracy of the descriptions or references in the Registration Statement to any real or personal
property, and need not express any opinion with respect to state or local taxes or tax statutes to
which any of the limited partners of the Partnership or any of the Partnership Entities may be
subject.
(d) The Representatives shall have received from Xxxxx Xxxxx L.L.P., counsel for the
Underwriters, such opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the sale of the Units, the Registration Statement, the
Disclosure Package, the Final Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the Partnership shall
have furnished to such counsel such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
(e) The Partnership shall have furnished to the Representatives a certificate of the
Partnership, signed on behalf of the Partnership by the Chief Executive Officer or Chief
Financial Officer of the General Partner, dated the Closing Date, to the effect that the
signers of such certificate have examined the Registration Statement, the Disclosure
Package, the Final Prospectus and any amendment or supplement thereto, as well as each
electronic road show used in connection with the offering of the Units, and this Agreement
and that:
(i) the representations and warranties of the Partnership in this
Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date and the Partnership has complied with
all the agreements and satisfied all the conditions on their part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any notice objecting to its use has been issued and no
proceedings for that purpose have been instituted or, to the Partnership’s
knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Disclosure Package and the Final Prospectus, there has been no
Material Adverse Effect, except as set forth in or contemplated in the
Disclosure Package and the Final Prospectus.
(f) The Selling Unitholder shall have furnished to the Representatives a certificate of
the Selling Unitholder, signed by, or on behalf of, the Selling Unitholder, dated the
Closing Date, stating that the representations and warranties of the Selling Unitholder in
Section 2 hereof are true and correct on and as of the Closing Date with the same effect as
if made on the Closing Date, and that the Selling Unitholder has complied with all the
agreements and satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date.
31
(g) The Underwriters shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from PricewaterhouseCoopers LLP, independent
public accountants, containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement, the Disclosure
Package and the Final Prospectus; provided that the letter delivered on the Closing Date
shall use a “cut off date” not earlier than the date hereof.
(h) Subsequent to the Execution Time, there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (g) of this Section 8
or (ii) any change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of the Partnership
Entities 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 Disclosure Package and the Final
Prospectus the effect of which, in any case referred to in clause (i) or (ii) above, is, in
the sole judgment of the Representatives, so material and adverse as to make it impractical
or inadvisable to proceed with the offering or delivery of the Units as contemplated by the
Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the
Final Prospectus (exclusive of any amendment or supplement thereto).
(i) Prior to the Closing Date, the Partnership and the Selling Unitholder shall have
furnished to the Representatives such further information, certificates and documents as the
Representatives may reasonably request.
(j) Subsequent to the Execution Time, there shall not have been any decrease in the
rating of any of the Partnership’s debt securities by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction of the possible
change.
(k) The Firm Units shall be listed and admitted and authorized for trading on the NYSE.
(l) At the Execution Time, the Partnership shall have furnished to the Representatives
a letter substantially in the form of Exhibit A hereto from each executive officer
and director of the General Partner.
If any of the conditions specified in this Section 8 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere
in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Partnership and the Selling Unitholder in writing or by
telephone or facsimile confirmed in writing.
32
The documents required to be delivered by this Section 8 shall be delivered at the office of
Xxxxx Xxxxx L.L.P., counsel for the Underwriters, at 000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, on the
Closing Date.
9. Reimbursement of Underwriters’ Expenses. If the sale of the Units provided for herein is
not consummated because any condition to the obligations of the Underwriters set forth in Section 8
hereof is not satisfied, because of any termination pursuant to Section 12(i) hereof or because of
any refusal, inability or failure on the part of the Partnership or the Selling Unitholder to
perform any agreement herein or comply with any provision hereof other than by reason of a default
by any of the Underwriters, the Partnership will reimburse the Underwriters severally through
Barclays on demand for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Units.
10. Indemnification and Contribution.
(a) The Partnership agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter, affiliates of any Underwriter
who have participated in the distribution of the Units as underwriters, and each person who
controls any Underwriter or any such affiliate within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages, expenses or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement as originally filed or in any amendment thereof, or
in any Preliminary Final Prospectus, the Final Prospectus, any Issuer Free Writing
Prospectus, or in any amendment thereof 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 agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by them in connection with
investigating, preparing for or defending any such loss, claim, damage, liability or action;
provided, however, that the Partnership will 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
any such untrue statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of any Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any liability which the
Partnership may otherwise have.
(b) The Selling Unitholder agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter, affiliates of any Underwriter
who have participated in the distribution of the Units as underwriters, and each person who
controls any Underwriter or any such affiliate within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common
33
law or otherwise, insofar as such losses, claims, damages, expenses or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement as originally filed or in any amendment thereof, or
in any Preliminary Final Prospectus, the Final Prospectus, any Issuer Free Writing
Prospectus, or in any amendment thereof 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 agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating, preparing for or defending any such loss,
claim, damage, liability or action; provided, however, that the Selling
Unitholder shall be liable in any such case only to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon and in
conformity with written information concerning such Selling Unitholder furnished to the
Partnership by or on behalf of the Selling Unitholder specifically for inclusion therein,
which information consists solely of the information appearing in the Preliminary Final
Prospectus and the Final Prospectus under the caption “Selling Unitholder.” The liability
of the Selling Unitholder under the indemnity agreement contained in this paragraph shall be
limited to an amount equal to the total net proceeds from the offering of the Units
purchased under this Agreement received by the Selling Unitholder. This indemnity agreement
will be in addition to any liability which the Selling Unitholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to indemnify and hold harmless
the Partnership, each of the General Partner’s directors and officers who sign the
Registration Statement, the Selling Unitholder, each of the Selling Unitholder’s directors,
officers and managers, and each person who controls the Partnership or Selling Unitholder
within the meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Partnership and the Selling Unitholder to each Underwriter, but
only with reference to written information relating to such Underwriter furnished to the Partnership by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Partnership and the Selling Unitholder acknowledge
that, under the heading “Underwriting,” (i) the sentences related to concessions and (ii)
the paragraphs related to stabilization and syndicate covering transactions in any
Preliminary Final Prospectus and the Final Prospectus and electronic delivery of the Final
Prospectus, constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the Preliminary Final Prospectus, the Final Prospectus
and any Issuer Free Writing Prospectus.
(d) Promptly after receipt by an indemnified party under this Section 10 of notice of
the commencement of any action, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section 10, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraphs (a), (b) or (c) above unless
and to the extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and
34
defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraphs (a), (b) or (c) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice
at the indemnifying party’s expense to represent the indemnified party in any action for
which indemnification is sought (in which case the indemnifying party shall not thereafter
be responsible for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party’s election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time after notice
of the institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding and 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.
(e) In the event that the indemnity provided in paragraph (a), (b) or (c) of this
Section 10 is unavailable to or insufficient to hold harmless an indemnified party for any
reason, the Partnership, the Selling Unitholder and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending the same)
(collectively “Losses”) to which Partnership, the Selling Unitholder or one or more
of the Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Partnership and Selling Unitholder, on the one hand, and
by the Underwriters, on the other, from the offering of the Units, provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Units) be responsible for any
amount in excess of the underwriting discount or commission applicable to the Units
purchased by such Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Partnership, the Selling Unitholder
and the Underwriters severally shall contribute 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 the one hand, and of the Underwriters, on the other, in
connection with the
35
statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Partnership and the
Selling Unitholder shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by the Selling Unitholder, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final Prospectus. Relative
fault shall be determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Partnership and the Selling Unitholder,
on the one hand, or the Underwriters, on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Partnership, the Selling Unitholder and the Underwriters agree
that it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this paragraph (e), 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. For purposes of this Section 10, each person who controls an Underwriter
within the meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Partnership or the Selling Unitholder within
the meaning of either the Act or the Exchange Act, each officer of the General Partner who
shall have signed the Registration Statement, each director of the General Partner, and each
officer or director of the Selling Unitholder, shall have the same rights to contribution as
the Partnership and the Selling Unitholder, subject in each case to the applicable terms and
conditions of this paragraph (e) to collect such amounts from the Partnership or the Selling
Unitholder, except in the event that the Partnership or the Selling Unitholder commences or
becomes subject to any bankruptcy, liquidation, reorganization, moratorium or other
proceeding providing protection from creditors generally.
11. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay
for any of the Units agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in
the respective proportions which the number of Units set forth opposite their names in Schedule
I hereto bears to the aggregate number of Units set forth opposite the names of all the
remaining Underwriters) the Units which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate number
of Units which the defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate number of Units set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Units, and if such nondefaulting Underwriters do not purchase all the Units,
this Agreement will terminate without liability to any nondefaulting Underwriter, the Partnership
or the Selling Unitholder. In the event of a default by any Underwriter as set forth in this
Section 11, the Closing Date shall be postponed for such period, not exceeding five Business Days,
as the Representatives shall determine in order that the required changes in the Registration
Statement and the Final Prospectus or in any other documents or arrangements may
36
be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Partnership, the Selling Unitholder or any nondefaulting Underwriter for damages
occasioned by its default hereunder.
12. Termination. This Agreement shall be subject to termination in the absolute discretion of
the Representatives, by notice given to the Partnership prior to delivery of and payment for the
Units, if at any time prior to such delivery and payment (i) trading in the Partnership’s Common
Units shall have been suspended by the Commission or the NYSE, (ii) trading in securities generally
on the NYSE or the Nasdaq Global Market shall have been suspended or limited or minimum prices
shall have been established on such exchange, (iii) a banking moratorium shall have been declared
either by Federal or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States or (iv) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a national emergency
or war, or other calamity or crisis the effect of which on financial markets is such as to make it,
in the sole judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Units as contemplated by the Preliminary Final Prospectus or the Final
Prospectus.
13. Representations and Indemnities to Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Selling Unitholder, the Partnership or the
General Partner’s officers and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Selling Unitholder or the Partnership or any of the officers, directors,
employees, agents or controlling persons referred to in Section 10 hereof, and will survive
delivery of and payment for the Units. The provisions of Sections 9 and 10 hereof shall survive
the termination or cancellation of this Agreement.
14. Notices. All communications hereunder will be in writing and effective only on receipt,
and, if sent to the Representatives, will be mailed, delivered or telefaxed to Barclays Capital
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Syndicate Registration, with a copy in
case of any notice pursuant to Section 10, to Office of the General Counsel, Barclays Capital Inc.,
000 0xx Xxxxxx, Xxx Xxxx, XX 00000, Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: General Counsel, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Syndicate Department, Fax: (000)
000-0000 with a copy to Attention: ECM Legal, Fax: (000) 000-0000, UBS Securities LLC, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Syndicate Department, and Xxxxx Fargo Securities, LLC,
000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate Department (fax
no. 000.000.0000); or, if sent to the Partnership or the Selling Unitholder, will be mailed,
delivered or telefaxed to Targa Resources Partners LP and confirmed to it at 0000 Xxxxxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, attention of Xxxx X. Xxxxx, General Counsel (fax no. 000.000.0000) with
a copy to Xxxxxx & Xxxxxx LLP, First City Tower, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000-0000 attention of Xxxxx X. Xxxxxx (fax no. 000.000.0000).
15. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers, directors, employees, agents and
controlling persons referred to in Section 10 hereof, and no other person will have any right or
obligation hereunder.
37
16. No Fiduciary Duty. The Partnership and the Selling Unitholder hereby acknowledge that
(a) the purchase and sale of the Units pursuant to this Agreement is an arm’s-length commercial
transaction between the Selling Unitholder, on the one hand, and the Underwriters and any affiliate
through which they may be acting, on the other, (b) the Underwriters are acting as principal and
not as an agent or fiduciary of the Partnership or the Selling Unitholder and (c) the Partnership’s
and Selling Unitholder’s engagement of the
Underwriters in connection with the offering and the process leading up to the offering is as
independent contractors and not in any other capacity. Furthermore, each of the Partnership and
the Selling Unitholder agrees that it is solely responsible for making its own judgments in
connection with the offering (irrespective of whether any of the Underwriters has advised or is
currently advising the Partnership or the Selling Unitholder on related or other matters). Each of
the Partnership and the Selling Unitholder agrees that it will not claim that the Underwriters have
rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to
the Partnership or the Selling Unitholder, in connection with such transaction or the process
leading thereto.
17. Research Analyst Independence. The Partnership and the Selling Unitholder
acknowledge that the Underwriters’ research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject to certain
regulations and internal policies, and that such Underwriters’ research analysts may hold views and
make statements or investment recommendations and/or publish research reports with respect to the
Partnership and/or the offering that differ from the views of their respective investment banking
divisions. The Partnership and the Selling Unitholder hereby waive and release, to the fullest
extent permitted by law, any claims that the Partnership and the Selling Unitholder may have
against the Underwriters with respect to any conflict of interest that may arise from the fact that
the views expressed by their independent research analysts and research departments may be
different from or inconsistent with the views or advice communicated to the Partnership or the
Selling Unitholder by such Underwriters’ investment banking divisions. The Partnership and the
Selling Unitholder acknowledge that each of the Underwriters is a full service securities firm and
as such from time to time, subject to applicable securities laws, may effect transactions for its
own account or the account of its customers and hold long or short positions in debt or equity
securities of the companies that may be the subject of the transactions contemplated by this
Agreement.
18. Reserved.
19. Integration. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Partnership, the Selling Unitholder and the Underwriters, or
any of them, with respect to the subject matter hereof.
20. Applicable Law. This Agreement will be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be performed within the State
of New York.
21. Waiver of Jury Trial. The Partnership and the Selling Unitholder hereby irrevocably
waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
38
22. Counterparts. This Agreement may be signed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute one and the same agreement.
23. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
24. Definitions. The terms that follow, when used in this Agreement, shall have the
meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Basic Prospectus” shall mean the prospectus referred to in paragraph 1(a) above
contained in the Registration Statement at the Effective Date.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday
or a day on which banking institutions or trust companies are authorized or obligated by law to
close in New York City.
“Commission” shall mean the Securities and Exchange Commission.
“Disclosure Package” shall mean (i) the Basic Prospectus, as amended and supplemented
to the Execution Time, (ii) the Issuer Free Writing Prospectuses set forth in Schedule IV
hereto, if any, and the price to the public, the number of Firm Units and the number of Options
Units identified in Schedule V hereto, and (iii) any other Free Writing Prospectus that the
parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure
Package.
“Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto became or becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and
delivered by the parties hereto.
“Final Prospectus” shall mean the prospectus supplement relating to the Units that was
first filed pursuant to Rule 424(b) after the Execution Time, together with the Basic Prospectus.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule
405.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as
defined in Rule 433.
39
“Preliminary Final Prospectus” shall mean any preliminary prospectus supplement to the
Basic Prospectus which describes the Units and the offering thereof and is used prior to filing of
the Final Prospectus, together with the Basic Prospectus.
“Registration Statement” shall mean the registration statement referred to in
paragraph 1(a) above, including exhibits and financial statements and any prospectus supplement
relating to the Units that is filed with the Commission pursuant to Rule 424(b) and deemed part of
such registration statement pursuant to Rule 430B, as amended at the Execution Time and, in the
event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also
mean such registration statement as so amended.
“Rule 158”, “Rule 172”, “Rule 405”, “Rule 424”, “Rule
430B”, “Rule 433” and “Rule 462” refer to such rules under the Act.
40
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Partnership, the Selling Unitholder and the several
Underwriters.
Very truly yours, Targa Resources Partners LP |
||||
By: | TARGA RESOURCES GP LLC its general partner |
|||
By: | /s/ Xxxxxxx X. XxXxxxxxx | |||
Name: | Xxxxxxx X. XxXxxxxxx | |||
Title: | Executive Vice President and Chief Financial Officer | |||
Targa LP Inc. |
||||
By: | /s/ Xxxxxxx X. XxXxxxxxx | |||
Name: | Xxxxxxx X. XxXxxxxxx | |||
Title: | Executive Vice President and Chief Financial Officer | |||
Signature Page to the Underwriting Agreement
Accepted: Barclays Capital Inc. Citigroup Global Markets Inc. Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated UBS Securities LLC Xxxxx Fargo Securities, LLC For themselves and as Representatives of the several Underwriters named in Schedule I hereto |
||||
By: | BARCLAYS CAPITAL INC. | |||
By: | /s/ Xxxxxxxx Xxxx | |||
Name: | Xxxxxxxx Xxxx | |||
Title: | Vice President | |||
By: | CITIGROUP GLOBAL MARKETS INC. | |||
By: | /s/ Xxxxxxx Xxxxx | |||
Name: | Xxxxxxx Xxxxx | |||
Title: | Director | |||
By: | XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED | |||
By: | /s/ Xxxxx XxXxxxx | |||
Name: | Xxxxx XxXxxxx | |||
Title: | MD | |||
By: | UBS SECURITIES LLC | |||
By: | /s Xxx Xxxx | |||
Name: | Xxx Xxxx | |||
Title: | Director | |||
By: | /s/ Xxxxxxx Xxxxxxx | |||
Name: | Xxxxxxx Xxxxxxx | |||
Title: | Associate Director | |||
By: | XXXXX FARGO SECURITIES, LLC | |||
By: | /s/ Xxxxx Xxxxxx | |||
Name: | Xxxxx Xxxxxx | |||
Title: | Director | |||
Signature Page to the Underwriting Agreement
SCHEDULE I
Number of Firm Units | ||
Underwriters | to be Purchased | |
Barclays Capital Inc. |
1,275,000 | |
Citigroup Global Markets Inc. |
1,275,000 | |
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated |
1,275,000 | |
UBS Securities LLC |
1,275,000 | |
Xxxxx Fargo Securities, LLC |
1,275,000 | |
Deutsche Bank Securities Inc. |
425,000 | |
Xxxxxxx, Xxxxx & Co. |
425,000 | |
Xxxxxx Xxxxxxx & Co. Incorporated |
425,000 | |
Xxxxxxx Xxxxx & Associates, Inc. |
425,000 | |
RBC Capital Markets Corporation |
425,000 | |
Total |
8,500,000 |
I-1
SCHEDULE II-A
Subsidiaries
Name | Jurisdiction of Formation | Entity Type | ||
Targa Resources Operating GP LLC
|
Delaware | LLC | ||
Targa Resources Operating LP
|
Delaware | LP | ||
Targa Resources Partners Finance Corporation
|
Delaware | Corp | ||
Targa North Texas GP LLC
|
Delaware | LLC | ||
Targa North Texas LP
|
Delaware | LP | ||
Targa Intrastate Pipeline LLC
|
Delaware | LLC | ||
Targa Resources Texas GP LLC
|
Delaware | LLC | ||
Targa Texas Field Services LP
|
Delaware | LP | ||
Targa Louisiana Field Services LLC
|
Delaware | LLC | ||
Targa Louisiana Intrastate LLC
|
Delaware | LLC | ||
Targa LSNG GP LLC
|
Delaware | LLC | ||
Targa LSNG LP
|
Delaware | LP | ||
Targa Downstream GP LLC
|
Delaware | LLC | ||
Targa Downstream LP
|
Delaware | LP | ||
Targa Sparta LLC
|
Delaware | LLC | ||
Targa Canada Liquids Inc.
|
British Columbia, Canada | Corp | ||
Midstream Barge Company LLC
|
Delaware | LLC | ||
Targa Retail Electric LLC
|
Delaware | LLC | ||
Targa NGL Pipeline Company LLC
|
Delaware | LLC | ||
Targa Transport LLC
|
Delaware | LLC | ||
Targa Co-Generation LLC
|
Delaware | LLC | ||
Targa Liquids GP LLC
|
Delaware | LLC | ||
Targa Liquids Marketing and Trade
|
Delaware | GP | ||
Targa MLP Capital LLC
|
Delaware | LLC | ||
Downstream Energy Ventures Co., L.L.C.
|
Delaware | LLC | ||
Cedar Bayou Fractionators, L.P.
|
Delaware | XX |
XX-A
SCHEDULE II-B
Material Subsidiaries
Name | Jurisdiction of Formation | Entity Type | ||
Targa Resources Operating GP LLC
|
Delaware | LLC | ||
Targa Resources Operating LP
|
Delaware | LP | ||
Targa North Texas GP LLC
|
Delaware | LLC | ||
Targa North Texas LP
|
Delaware | LP | ||
Targa Resources Texas GP LLC
|
Delaware | LLC | ||
Targa Texas Field Services LP
|
Delaware | LP | ||
Targa Louisiana Field Services LLC
|
Delaware | LLC | ||
Targa Downstream GP LLC
|
Delaware | LLC | ||
Targa Downstream LP
|
Delaware | LP | ||
Targa Canada Liquids Inc.
|
British Columbia, Canada | Corp | ||
Targa MLP Capital LLC
|
Delaware | LLC | ||
Downstream Energy Ventures Co., L.L.C.
|
Delaware | LLC | ||
Midstream Barge Company LLC
|
Delaware | LLC | ||
Targa Retail Electric LLC
|
Delaware | LLC | ||
Targa Co-Generation LLC
|
Delaware | LLC | ||
Targa Liquids GP LLC
|
Delaware | LLC | ||
Targa Liquids Marketing and Trade
|
Delaware | GP | ||
Gulf Coast Fractionators
|
Texas | GP | ||
Cedar Bayou Fractionators, L.P.
|
Delaware | XX |
XX-B
SCHEDULE III
Formation and Qualification
Name | Jurisdiction of Formation | Entity Type | ||
Delaware | LP | |||
Targa Resources GP LLC
|
Delaware | LLC | ||
Targa Resources Operating GP LLC
|
Delaware | LLC | ||
Targa Resources Operating LP
|
Delaware | LP | ||
Targa North Texas GP LLC
|
Delaware | LLC | ||
Targa North Texas LP
|
Delaware | LP | ||
Targa Resources Texas GP LLC
|
Delaware | LLC | ||
Targa Texas Field Services LP
|
Delaware | LP | ||
Targa Louisiana Field Services LLC
|
Delaware | LLC | ||
Targa Downstream GP LLC
|
Delaware | LLC | ||
Targa Downstream LP
|
Delaware | LP | ||
Targa Canada Liquids Inc.
|
British Columbia, Canada | Corp | ||
Targa MLP Capital LLC
|
Delaware | LLC | ||
Downstream Energy Ventures Co., L.L.C.
|
Delaware | LLC | ||
Midstream Barge Company LLC
|
Delaware | LLC | ||
Targa Retail Electric LLC
|
Delaware | LLC | ||
Targa Co-Generation LLC
|
Delaware | LLC | ||
Targa Liquids GP LLC
|
Delaware | LLC | ||
Targa Liquids Marketing and Trade
|
Delaware | GP | ||
Gulf Coast Fractionators
|
Texas | GP | ||
Cedar Bayou Fractionators, L.P.
|
Delaware | LP |
III-1
SCHEDULE IV
[None]
IV-1
SCHEDULE V
Pricing Information:
|
$27.50 per unit | |
Unit Information:
|
8,500,000 Firm Units | |
1,275,000 Option Units |
V-1
EXHIBIT A
FORM OF LOCK-UP LETTER
April 9, 2010
Barclays Capital Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting Agreement
(the “Underwriting Agreement”), between Targa Resources Partners LP (the
“Partnership”), Targa LP Inc., Barclays Capital Inc., as a representative of a group of
Underwriters named therein, and the other parties thereto, relating to an underwritten public
offering of units, representing limited partner interests (the “Partnership Units”), in the
Partnership.
In order to induce you and the other Underwriters to enter into the Underwriting Agreement,
the undersigned will not, without the prior written consent of Barclays Capital Inc., 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 undersigned or any
affiliate of the undersigned), directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Securities and Exchange Commission in respect of,
or establish or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission promulgated thereunder with respect to,
any Common Units of the Partnership or any securities convertible into, or exercisable or
exchangeable for such Common Units, or publicly announce an intention to effect any such
transaction, for a period of 45 days after the date of the Underwriting Agreement, other than
Partnership Units disposed of as bona fide gifts approved by Barclays Capital Inc.
If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as
defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated.
Yours very truly, |
||||
A-1