EXHIBIT I
COMMON UNIT PURCHASE AGREEMENT
COMMON UNIT PURCHASE AGREEMENT, dated as of December 28, 2004 (this
"Agreement"), by and among SHELL US GAS & POWER LLC, a Delaware limited
liability company ("Seller"), and XXXXX XXXXXXXX MLP INVESTMENT COMPANY, a
Maryland corporation ("Purchaser").
WHEREAS, Seller is the registered holder of 41,000,000 common units
representing limited partner interests in Enterprise Products Partners L.P., a
Delaware limited partnership ("Enterprise");
WHEREAS, Seller is the successor in interest to the rights of Tejas
Energy LLC, a Delaware limited liability company, under that certain
Registration Rights Agreement dated as of September 17, 1999 by and among Tejas
Energy LLC and Enterprise, a copy of which is attached hereto as Exhibit A (the
"Registration Rights Agreement");
WHEREAS, Seller desires to sell to Purchaser, and Purchase desires to
purchase from Seller, certain Enterprise common units, subject to the terms and
conditions set forth in this Agreement;
WHEREAS, Seller desires to assign to Purchaser certain of Seller's
registration rights with respect to the common units acquired by Purchaser
hereunder pursuant to the terms and conditions of the Registration Rights
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
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"Action" against a Person means any lawsuit, action, proceeding,
investigation or complaint before any Governmental Authority, mediator or
arbitrator.
"Affiliate" means, with respect to a specified Person, any other
Person, directly or indirectly controlling, controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, "controlling",
"controlled by", and "under common control with") means the power to direct or
cause the direction of the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"Agreement" shall have the meaning set forth in the Preamble.
"Anniversary Date" means the date three months from the date of this
Agreement.
"Alternate Second Closing Date" shall have the meaning set forth in
Section 2.04(b).
"Assignment Agreement" means the Registration Rights Assignment
Agreement to be entered into on even date herewith, between Seller, as assignor,
and Purchaser, as assignee, in the form attached hereto as Exhibit B.
"Basic Documents" means, collectively, this Agreement, the Assignment
Agreement and any and all other agreements or instruments executed and delivered
to Purchaser by Seller or any Affiliate of Seller hereunder or thereunder.
"Business Day" means any day other than a Saturday, Sunday, or a legal
holiday or other date on which the New York Stock Exchange does not open for
trading.
"Closing" means the First Closing or the Second Closing, as the case
may be.
"Closing Date" means the First Closing Date, the Second Closing Date or
the Alternative Second Closing Date, as the case may be.
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"Commission" means the United States Securities and Exchange
Commission.
"Common Units" means common units representing limited partner
interests in Enterprise.
"Enterprise" shall have the meaning specified in the Preamble.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the Commission promulgated
thereunder.
"First Closing Date" shall have the meaning specified in Section
2.03(a).
"First Closing" shall have the meaning specified in Section 2.03(a).
"First Purchase Price" means One Hundred Million U.S. Dollars
(USD$100,000,000).
"Freely Tradable Common Units" means Common Units that (i) when owned
by a Person that is not an "affiliate" of Enterprise, are not "restricted
securities" as such terms are defined in Rule 144 of the Securities Act or (ii)
when delivered to Purchaser pursuant to this Agreement, are delivered pursuant
to an effective registration statement filed by Enterprise under the Securities
Act on a form suitable for public resales by Purchaser.
"Governmental Authority" means, with respect to a particular Person,
the country, state, county, city and political subdivisions in which such Person
or such Person's Property is located or which exercises valid jurisdiction over
any such Person or such Person's Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary
authority which exercises valid jurisdiction over any such Person or such
Person's Property. Unless otherwise specified, all references to Governmental
Authority herein with respect to Seller means a Governmental Authority having
jurisdiction over Seller, its Affiliates or any of their respective Properties.
"Indemnified Party" shall have the meaning specified in Section 6.03.
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"Indemnifying Party" shall have the meaning specified in Section 6.03.
"Initial Units" means the number of Common Units (rounded up or down to
the nearest whole number) equal to the quotient determined by dividing (i) One
Hundred Million U.S. Dollars (USD$100,000,000) by (ii) the Initial Unit Price.
"Initial Unit Price" has the meaning specified in Section 2.07.
"Law" means any federal, state, local or foreign order, writ,
injunction, judgment, settlement, award, decree, statute, law, rule or
regulation.
"Maximum Quantity Option Units" means the number of Common Units
(rounded up or down to the nearest whole number) equal to the quotient
determined by dividing (i) Fifty Million U.S. Dollars (USD$50,000,000) by (ii)
the Option Unit Price.
"Minimum Quantity Option Units" means the number of Common Units
(rounded up or down to the nearest whole number) equal to the quotient
determined by dividing (i) Thirty Million U.S. Dollars (USD$30,000,000) by (ii)
the Option Unit Price.
"Option Unit Price" means (i) if the purchase of the Option Units
occurs on the Second Closing Date pursuant to Section 2.04(a): the monetary
amount per Common Unit equal to (A) the average closing price of Common Units
listed and traded on the New York Stock Exchange, as reported by Bloomberg L.P.
on page 1 of screen "HP," for the twenty (20) trading days immediately ending on
and including the fifth trading day immediately preceding the Anniversary Date,
multiplied by (B) 0.935, or (ii) if the purchase of the Option Units occurs on
the Alternate Second Closing Date pursuant to Section 2.04(b) or Section
2.04(c): the monetary amount per Common Unit equal to (X) the average closing
price of Common Units listed and traded on the New York Stock Exchange, as
reported by Bloomberg L.P. on page 1 of screen "HP," for the twenty (20) trading
days immediately ending on and including the fifth trading day immediately
preceding the Alternate Second Closing Date, multiplied by (Y) 0.935, as
applicable.
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"Option Units" shall have the meaning specified in Section 2.01(b).
"Person" means any individual, corporation, company, voluntary
association, partnership, joint venture, trust, limited liability company,
unincorporated organization or government or any agency, instrumentality or
political subdivision thereof, or any other form of entity.
"Purchased Units" means, collectively, the Initial Units and the Option
Units, if any, purchased by Purchaser hereunder.
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Material Adverse Effect" means any material and adverse
effect on the ability of Purchaser to meet its obligations under the Basic
Documents to which it is a party on a timely basis or to consummate the
transactions under any Basic Document to which it is a party.
"Purchaser Related Parties" shall have the meaning specified in Section
6.01.
"Registered Common Units" means Common Units registered on an effective
registration statement under the Securities Act (on a form suitable for the
public resale of such Common Units) which are exchanged pursuant thereto for
Initial Units upon Seller's exercise of the exchange option under Section 2.09
hereof.
"Registration Rights Agreement" shall have the meaning specified in the
Preamble.
"Representatives" of any Person means the officers, directors,
employees, agents, counsel, accountants, investment bankers and other
representatives of such Person.
"Second Closing" shall have the meaning specified in Section 2.03(b).
"Second Closing Date" shall have the meaning specified in Section 2.04.
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"Second Purchase Price" means the monetary amount equal to the number
of Option Units purchased pursuant to Section 2.01(b) multiplied by the Option
Unit Price.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.
"Seller" shall have the meaning set forth in the Preamble.
"Seller Material Adverse Effect" means any material and adverse effect
on the ability of Seller to meet its obligations under the Basic Documents to
which it is a party on a timely basis or to consummate the transactions under
any Basic Document to which it is a party.
"Seller Related Parties" shall have the meaning specified in Section
5.01.
"Termination Date" shall have the meaning specified in Section 6.09.
"Unitholder Rights Agreement" means the Unitholder Rights Agreement
dated September 17, 1999 among Seller, Enterprise, Enterprise Products Operating
L.P., Enterprise Products Company, Enterprise Products GP, LLC and EPC Partners
II, Inc., as amended by Amendment No. 1 dated September 12, 2003.
ARTICLE II.
AGREEMENT TO SELL AND PURCHASE
AND ASSIGNMENT OF REGISTRATION RIGHTS
Section 2.01 Sale and Purchase
On the basis of the representations and warranties contained
herein and subject to the terms and conditions hereof:
(a) At the First Closing, Seller agrees to sell to Purchaser,
and Purchaser hereby agrees to purchase from Seller, the Initial Units, and
Purchaser agrees to pay Seller the First Purchase Price as consideration for the
Initial Units; and
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(b) Seller hereby grants to Purchaser an option to purchase
additional Common Units ("Option Units") hereunder for consideration in the
amount of the Second Purchase Price; provided, however, that, if Purchaser
purchases any Option Units pursuant to this Section 2.01(b), Purchaser must
purchase (i) not less than the Minimum Quantity Option Units and (ii) not more
than the Maximum Quantity Option Units. Such option shall be exercised, if at
all, solely in the discretion of Purchaser in accordance with Section 2.04
hereof. If Seller holds Freely Tradable Common Units transferable to Purchaser
in an amount equal to the number of Option Units purchased hereunder on the
Anniversary Date, the Option Units delivered on the Second Closing Date shall be
comprised solely of Freely Tradable Common Units.
Section 2.02 Assignment of Registration Rights.
(a) Seller and Purchaser agree to execute and deliver the
Assignment Agreement, and Purchaser agrees to execute the Counterpart to the
Registration Rights Agreement attached as Exhibit C to the Assignment Agreement;
provided, however, that the registration right assigned to Purchaser pursuant to
Section 1 of the Assignment Agreement shall terminate and the assignment of
rights therein be null and void if on or before 150 days after the First Closing
Date: (i) all of the Purchased Units then held by Purchaser shall have been
included in an effective registration statement filed by Enterprise with the
Commission on a form suitable for the public resale of such Purchased Units and
naming Purchaser as a "Selling Unitholder" therein, and Enterprise is obligated
under the Registration Rights Agreement or has otherwise agreed in writing to
maintain the effectiveness of such registration statement for a period of time
expiring on the date that is one (1) year from the First Closing Date, (ii)
Seller shall have requested Enterprise to effect the registration under the
Securities Act of all of the Purchased Units pursuant to Section 2(a) of the
Registration Rights Agreement, along with such number of Seller's Common Units
as Seller may request, and Enterprise is obligated under the Registration Rights
Agreement or has otherwise agreed in writing to maintain the effectiveness of
such registration statement for a period of time expiring on the date that is
one (1) year from the First Closing Date, or (iii) all of Purchaser's Purchased
Units shall have been exchanged for Registered Common Units pursuant to Section
2.09 hereof.
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(b) Seller agrees to request Enterprise to take such action
consistent with applicable law with respect to its current shelf registration
statement under the Securities Act (No. 333-102778) to either file an amendment
to such registration statement or to file a prospectus supplement under such
registration statement to (i) cause the Purchased Units to be included in an
effective registration statement filed with the Commission by Enterprise within
150 days after the First Closing Date on a form suitable for public resale of
the Purchased Units and naming the Purchaser as a "Selling Unitholder" or (ii)
exchange such Purchased Units for Freely Tradable Common Units pursuant to
Section 2.09 hereof within 150 days after the First Closing Date; provided,
however, that this Section 2.02(b) shall not obligate Seller to exercise its
rights under Section 2 of the Registration Rights Agreement to demand that
Enterprise file a registration statement with respect to the Purchased Units.
(c) Seller agrees to give written notice of the Assignment
Agreement to Enterprise in accordance with Section 13(e) of the Registration
Rights Agreement.
Section 2.03 Closing.
(a) Subject to the terms and conditions hereof, the
consummation of the purchase and sale of the Initial Units hereunder (the "First
Closing") shall take place at 9:00 A.M., Houston, Texas time, on December 29,
2004 (the "First Closing Date"), at the offices of Xxxxx Xxxxx L.L.P., 000
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000.
(b) Subject to the terms and conditions hereof, the
consummation of the purchase and sale of the Option Units, if any, hereunder
(the "Second Closing") shall take place on the date specified in the option
exercise notice given pursuant to Section 2.04(a) hereof or the Alternate Second
Closing Date, as applicable, at the offices of Xxxxx Xxxxx L.L.P., 000 Xxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx 00000.
(c) Time shall be of the essence, and delivery of any Common
Units purchased hereby at the time and place specified in this Agreement is a
further condition of the obligation of Purchaser.
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Section 2.04 Option Exercise.
(a) The option to purchase Option Units granted in Section
2.01(b) will expire on the day immediately following the Anniversary Date and
may be exercised by written notice being given by Purchaser to Seller on or
before the Anniversary Date. Such notice shall set forth the number of Option
Units to be purchased, the Second Purchase Price, the name(s) in which the
Option Units are to be registered and the date and time when the Option Units
are to be delivered (the "Second Closing Date"), provided that such date and
time shall not be earlier than the Anniversary Date or later than the fifth
Business Day following the Anniversary Date.
(b) If the closing price of Common Units listed and traded on
the New York Stock Exchange, as reported by Bloomberg L.P. on page 1 of screen
"HP," on the trading day immediately preceding the Second Closing Date is equal
to or greater than 110% of the average closing price of Common Units listed and
traded on the New York Stock Exchange, as reported by Bloomberg L.P. on page 1
of screen "HP," for the twenty (20) trading days immediately ending on and
including the fifth trading day immediately preceding the Anniversary Date, then
Seller shall have a one time right (to be exercised by written notice delivered
to Purchaser at any time prior to the consummation of the Second Closing), to
postpone the Second Closing to a date that shall be the Business Day following
the tenth trading day immediately after the Anniversary Date (the "Alternate
Second Closing Date").
(c) If the closing price of Common Units listed and traded on
the New York Stock Exchange, as reported by Bloomberg L.P. on page 1 of screen
"HP," on the trading day immediately preceding the Second Closing Date is less
than or equal to 90% of the average closing price of Common Units listed and
traded on the New York Stock Exchange, as reported by Bloomberg L.P. on page 1
of screen "HP," for the twenty (20) trading days immediately ending on and
including the fifth trading day immediately preceding the Anniversary Date, then
Purchaser shall have a one time right (to be exercised by written notice
delivered to Seller at any time prior to the consummation of the Second
Closing), to postpone the Second Closing until the Alternate Second Closing
Date.
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Section 2.05 Conditions to the Closing.
(a) Mutual Conditions. The respective obligations of each
party to consummate the purchase and sale of the Common Units hereunder shall be
subject to the satisfaction on or prior to each Closing Date of each of the
following conditions (any or all of which may be waived by a particular party on
behalf of itself in writing, in whole or in part, to the extent permitted by
applicable Law):
(i) no statute, rule, order, decree or regulation shall have
been enacted or promulgated, and no Action shall have been taken,
by any Governmental Authority of competent jurisdiction which
temporarily, preliminarily or permanently restrains, precludes,
enjoins or otherwise prohibits the consummation of the
transactions contemplated hereby or makes the transactions
contemplated hereby illegal;
(ii) there shall not be pending any suit, Action or
proceeding by any Governmental Authority seeking to restrain,
preclude, enjoin or prohibit the transactions contemplated by
this Agreement; and
(iii) on or prior to the First Closing Date, Enterprise
shall have waived in writing its right of first refusal pursuant
to Section 3.3 of the Unitholder Rights Agreement with respect to
any Common Units to be sold hereunder.
(b) Purchaser's Conditions. The obligations of Purchaser to
consummate the purchase of any Common Units hereunder shall be subject to the
satisfaction on or prior to each Closing Date of each of the following
conditions (any or all of which may be waived by Purchaser in writing, in whole
or in part, to the extent permitted by applicable Law):
(i) The representations and warranties of Seller contained
in this Agreement shall be true and correct when made and as of
the Closing Date, in each case as though made at and as of the
Closing Date (except that representations made as of a specific
date shall be required to be true and correct as of such date
only);
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(ii) Seller and Purchaser shall have executed the Assignment
Agreement provided for by Section 2.02 hereof;
(iii) Since the date of this Agreement, no Seller Material
Adverse Effect shall have occurred and be continuing as of each
Closing Date; and
(iv) Seller shall have delivered, or cause to be delivered,
to Purchaser at the Closing, Seller's closing deliveries
described in Section 2.06 hereof.
(c) Seller's Conditions. The obligation of Seller to
consummate the sale of the Purchased Units to Purchaser shall be subject to the
satisfaction on or prior to each Closing Date of the conditions (which may be
waived by Seller in writing, in whole or in part, to the extent permitted by
applicable Law) that (i) the representations and warranties of Purchaser
contained in this Agreement shall be true and correct when made and as of the
Closing Date, in each case as though made at and as of the Closing Date (except
that representations made as of a specific date shall be required to be true and
correct as of such date only); (ii) since the date of this Agreement, no
Purchaser Material Adverse Effect shall have occurred and be continuing as of
each Closing Date; and (iii) Purchaser shall have delivered, or caused to be
delivered, to Seller at the Closing Purchaser's closing deliveries described in
Section 2.06.
Section 2.06 Deliveries. At each Closing, subject to the terms and
conditions hereof, each party will deliver, or cause to be delivered, the
following to the other party:
(a) Seller will deliver the Common Units to be purchased by
Purchaser at such Closing by delivery of one or more certificates evidencing
such Common Units, accompanied by duly executed irrevocable unit powers and
irrevocable transfer instructions by Seller to Mellon Investor Services, the
Enterprise transfer agent, together with such additional documentation as such
transfer agent may require, and (subject to the terms and conditions hereof)
Purchaser will make payment to Seller of the applicable purchase price set forth
in Section 2.01 hereof by wire transfer of immediately available funds to an
account designated by Seller in writing prior to the Closing;
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(b) At the First Closing, Seller will deliver the Assignment
Agreement, which shall have been duly executed by Seller; and
(c) At the First Closing, Purchaser will deliver the
Assignment Agreement and the Counterpart to Registration Rights Agreement, which
shall have been duly executed by Purchaser.
Section 2.07 Price Per Unit. The amount Purchaser will pay to Seller to
purchase the Initial Units hereunder (the "Initial Unit Price") shall be a
monetary amount per Common Unit equal to ninety-two and 25/100 percent (92.25%)
of the average closing price of Common Units listed and traded on the New York
Stock Exchange, as reported by Bloomberg L.P. on page 1 of screen "HP," for the
twenty (20) trading days immediately ending on and including the trading day two
trading days prior to the First Closing Date.
Section 2.08 Lock-Up Period.
(a) Prior to the Anniversary Date, Seller agrees not to,
directly or indirectly, (i) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device that is designed to, or could be
expected to, result in the disposition by any person at any time in the future)
any Common Units of Enterprise or securities with respect to any Common Units of
Enterprise or securities convertible into or exchangeable for Common Units of
Enterprise, or (ii) enter into any swap or other derivative transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such Common Units, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Units of
Enterprise or other securities, in cash or otherwise, in each case without the
prior written consent of Purchaser other than pursuant to (A) an underwritten
public offering of Common Units by Enterprise in which the Common Units held by
Seller are included pursuant to Seller's "piggyback" registration rights under
Section 3 of the Registration Rights Agreement and (B) private sales of Common
Units by Seller, provided that the purchaser(s) agree in writing not to,
directly or indirectly, prior to the Anniversary Date, offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future) any Common Units of
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Enterprise or securities with respect to any Common Units of Enterprise or
securities convertible into or exchangeable for Common Units of Enterprise,
without the prior written consent of Purchaser.
(b) From and including the First Closing Date through and
including the Anniversary Date, Purchaser agrees not to, directly or indirectly,
(i) offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition by any person at any time in the future) the Initial Units, or
(ii) enter into any swap or other derivative transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such Initial Units, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of the Initial Units or other
securities, in cash or otherwise, in each case without the prior written consent
of Seller.
(c) From and including the Anniversary Date through and
including the date that is 90 calendar days after the Anniversary Date,
Purchaser agrees not to, directly or indirectly, (i) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future) the Option Units, or (ii) enter into any swap or other
derivative transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such Option Units, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of the Option Units or other securities, in cash or otherwise, in each
case without the prior written consent of Seller.
Section 2.09 Exchange Option. At any time prior to the Anniversary
Date, Seller may exchange Freely Tradable Common Units for all or any portion of
the Initial Units sold hereunder at a ratio of 0.99 Freely Tradable Common Units
per Initial Unit. In the event Seller desires to make such exchange, Seller
shall provide written notice to Purchaser: (i) enclosing a copy of the
registration statement for such Freely Tradable Common Units and a copy of the
Commission's effectiveness order with respect thereto, (ii) stating the number
of Initial Units to be exchanged and the number of Freely Tradable Units to be
delivered in exchange therefor and (iii) stating the proposed time and place for
consummation
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of such exchange. Seller and Purchaser shall use reasonable best efforts
consistent with reasonable commercial practices to consummate the exchange as
soon as practicable following Purchaser's receipt of such notice; provided, that
Purchaser's obligation to consummate an exchange pursuant to this Section 2.09
shall be subject to the delivery by Seller of such additional documents,
opinions and certificates as counsel for Purchaser may reasonably request.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES RELATED TO SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 3.01 Corporate Existence of Seller. Seller (a) is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware; and (b) has all requisite power and authority,
and has all governmental licenses, authorizations, consents and approvals
necessary to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to consummate the transactions contemplated by this
Agreement.
Section 3.02 No Conflicts. None of the execution, delivery and
performance of this Agreement or the Assignment Agreement by Seller, the sale of
the Purchased Units or the consummation of the transactions contemplated hereby
and thereby (i) constitutes or will constitute a violation of the organizational
documents of Seller, (ii) constitutes or will constitute a breach or violation
of, or a default (or an event which, with notice or lapse of time or both, would
constitute such a default) under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which Seller is a party or
by which Seller or any of its properties may be bound, (iii) violates or will
violate any statute, law or regulation or any order, judgment, decree or
injunction of any court or Governmental Authority directed to Seller or any of
its properties in a proceeding to which its property is or was a party, or (iv)
results or will result in the creation or imposition of any lien, charge or
encumbrance upon the Purchased Units.
Section 3.03 Title to Units. As of the date hereof, Seller owns
41,000,000 Common Units. Seller is the sole registered owner of the
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Purchased Units and has good and valid title to the Purchased Units, free and
clear of all liens, encumbrances, security interests, equities or claims; and
upon delivery of such Purchased Units and payment therefor pursuant hereto, good
and valid title to such Purchased Units, free and clear of all liens,
encumbrances, security interests, equities or claims, will pass to Purchaser.
Assuming that Purchaser does not have notice of any adverse claim (as defined in
Sections 8-102 and 8-105 of the New York Uniform Commercial Code) to such
Purchased Units, upon the delivery to Purchaser of certificates evidencing the
Purchased Units registered in the name of Purchaser (or its nominee) and payment
by Purchaser of the purchase price for such Purchased Units, Purchaser (or such
nominee) will be a "protected purchaser" (as such term is used in Section 8-303
of the New York Uniform Commercial Code).
Section 3.04 Authorization and Enforceability of Agreement. This
Agreement has been duly authorized, executed and delivered by Seller, and Seller
has all requisite power and authority to sell and deliver the Purchased Units
purchased hereby and to execute and deliver the other Basic Documents to which
it is a party in accordance with and upon the terms and conditions set forth in
this Agreement. All action required to be taken by Seller for the sale and
delivery of the Purchased Units and the consummation of the transactions
contemplated by this Agreement shall have been validly taken. This Agreement is
a valid and legally binding agreement of Seller, enforceable against Seller in
accordance with its terms; provided that the enforceability hereof may be
limited by (A) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws from time to time in effect affecting
creditors' rights and remedies generally and by general principles of equity
(regardless of whether such principles are considered in a proceeding in equity
or at law) and (B) public policy, applicable law relating to fiduciary duties
and indemnification and an implied covenant of good faith and fair dealing.
Section 3.05 Authorization and Enforceability of Other Basic Documents.
Each of the Basic Documents other than this Agreement has been duly authorized
by Seller and when executed and delivered at Closing, will be a valid and
legally binding agreement of Seller, enforceable against Seller in accordance
with its terms; provided that the enforceability thereof may be limited by (A)
applicable bankruptcy,
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insolvency, fraudulent transfer, reorganization, moratorium or similar laws from
time to time in effect affecting creditors' rights and remedies generally and by
general principles of equity (regardless of whether such principles are
considered in a proceeding in equity or at law) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an implied
covenant of good faith and fair dealing.
Section 3.06 Registration Rights Agreement. The Registration Rights
Agreement has been duly authorized, executed and delivered by Tejas Energy, LLC,
and is a valid and legally binding agreement of Seller, as successor in interest
to Tejas Energy, LLC, enforceable against it in accordance with its terms;
provided that the enforceability thereof may be limited by (A) applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws from time to time in effect affecting creditors' rights and
remedies generally and by general principles of equity (regardless of whether
such principles are considered in a proceeding in equity or at law) and (B)
public policy, applicable law relating to fiduciary duties and indemnification
and an implied covenant of good faith and fair dealing. Prior to the date
hereof, neither Seller nor any of its predecessors in interest under the
Registration Rights Agreement has made any demand for registration of any Common
Units pursuant to Section 2 of the Registration Rights Agreement. Seller has no
agreement or understanding with Enterprise concerning the registration under the
Securities Act of Common Units other than the Registration Rights Agreement.
Section 3.07 No Consents. No consent of or with any court or
Governmental Authority having jurisdiction over Seller or any of its properties
is required in connection with the execution, delivery and performance of this
Agreement or any other Basic Document to which it is a party, or the
consummation by Seller of the transactions contemplated by this Agreement.
Section 3.08 Offering. Assuming the accuracy of the representations and
warranties of Purchaser contained in this Agreement, the sale of the Purchased
Units to Purchaser pursuant to this Agreement is exempt from the registration
requirements of the Securities Act, and neither Seller nor any authorized agent
acting on its behalf has taken or will take any action hereafter that would
cause the loss of such exemptions.
16
Section 3.09 Investment Company Status. Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 3.10 Certain Fees. No fees or commissions will be payable by
Seller or its Affiliates to brokers, finders, or investment bankers with respect
to the sale of any of the Purchased Units or the consummation of the
transactions contemplated by this Agreement.
Section 3.11 No Side Agreements. There are no other agreements by,
among or between Seller or its Affiliates, on the one hand, and Purchaser or its
Affiliates, on the other hand, with respect to the transactions contemplated
hereby nor promises or inducements for future transactions between or among any
of such parties.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 4.01 Corporate Existence. Purchaser (a) is a Maryland
corporation, duly incorporated, validly existing and in good standing under the
laws of Maryland, and (b) has all requisite power and authority, and has all
governmental licenses, authorizations, consents and approvals necessary to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to consummate the transactions contemplated by this Agreement.
Section 4.02 Investment. The Purchased Units are being acquired for
Purchaser's own account, not as a nominee or agent, and with no intention of
distributing the Purchased Units or any part thereof. Purchaser has no intention
of selling or granting any participation in or otherwise distributing the
Purchased Units in any transaction in violation of the securities laws of the
United States of America or any State, without prejudice, however, to
Purchaser's right at all times to sell or otherwise dispose of all or any part
of the Purchased Units under a registration statement under the Securities Act
and applicable state securities laws or
17
under an exemption from such registration available thereunder (including,
without limitation, if available, Rule 144 promulgated thereunder). If Purchaser
should in the future decide to dispose of any of the Purchased Units, Purchaser
understands and agrees that it may do so only (i) in compliance with the
Securities Act and applicable state securities law, as then in effect, or (ii)
in the manner contemplated by any registration statement pursuant to which such
securities are being offered.
Section 4.03 Nature of Purchaser. Purchaser represents and warrants to,
and covenants and agrees with, Seller that, (a) it is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated by the Commission
pursuant to the Securities Act and (b) by reason of its business and financial
experience it has such knowledge, sophistication and experience in making
similar investments and in business and financial matters generally so as to be
capable of evaluating the merits and risks of the prospective investment in the
Common Units, is able to bear the economic risk of such investment and, at the
present time, would be able to afford a complete loss of such investment.
Purchaser has made its own independent evaluation of the investment decision
pursuant hereto and has not relied upon any representation or warranty of Seller
or any representative or agent of Seller in connection with its purchase of the
Purchased Units hereby other than the express representations and warranties of
Seller set forth in Article III.
Section 4.04 No Conflicts. None of the execution, delivery and
performance of this Agreement or the Assignment Agreement by Purchaser, the
purchase of the Purchased Units, or the consummation of the transactions
contemplated hereby and thereby (i) constitutes or will constitute a violation
of the organizational documents of Purchaser, (ii) constitutes or will
constitute a breach or violation of, or a default (or an event which, with
notice or lapse of time or both, would constitute such a default) under, any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which Purchaser is a party or by which Purchaser or any of its
properties may be bound or (iii) violates or will violate any statute, law or
regulation or any order, judgment, decree or injunction of any court or
Governmental Authority directed to Purchaser or any of its properties in a
proceeding to which its Property is or was a party.
18
Section 4.05 Restricted Securities. Purchaser understands that the
Purchased Units (but not any Freely Tradable Common Units delivered to Purchaser
hereunder) are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from Seller in a transaction
not involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act only in certain limited circumstances. In this connection,
Purchaser represents that it is knowledgeable with respect to Rule 144 of the
Commission promulgated under the Securities Act.
Section 4.06 Certain Fees. No fees or commissions will be payable by
Purchaser or its Affiliates to brokers, finders, or investment bankers with
respect to the purchase of any of the Purchased Units or the consummation of the
transaction contemplated by this Agreement.
Section 4.07 Legend. It is understood that any certificates evidencing
the Purchased Units may bear a legend substantially similar to the following:
"These securities have not been registered under the Securities Act of 1933, as
amended. They may not be sold, offered for sale, pledged or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to the Issuer that such
registration is not required or unless sold pursuant to Rule 144 of such Act."
Section 4.08 No Side Agreements. There are no other agreements by,
among or between Purchaser and any of its Affiliates, on the one hand, and any
of Seller or its Affiliates, on the other hand, with respect to the transactions
contemplated hereby nor promises or inducements for future transactions between
or among any of such parties.
ARTICLE V.
INDEMNIFICATION
Section 5.01 Indemnification by Seller. Seller agrees to indemnify
Purchaser and its officers, directors, employees and agents, including its
investment advisor (collectively, "Purchaser Related Parties"), from, and hold
each of them harmless against any and all
19
actions, suits, proceedings (including any investigations, litigation or
inquiries), demands, and causes of action, and, in connection therewith, and
promptly upon demand, pay or reimburse each of them for all reasonable costs,
losses, liabilities, damages, or expenses of any kind or nature whatsoever,
including, without limitation, the reasonable fees and disbursements of counsel
and all other reasonable expenses incurred in connection with investigating,
defending or preparing to defend any such matter that may be incurred by them or
asserted against or involve any of them as a result of, arising out of, or in
any way related to the breach of any of the representations, warranties or
covenants of Seller contained herein, provided such claim for indemnification
relating to a breach of a representation or warranty is made prior to the
expiration of such representation or warranty. Furthermore, Seller agrees that
it will indemnify and hold harmless Purchaser from and against any and all
claims, demands, or liabilities for broker's, finder's, placement, or other
similar fees or commissions incurred by Seller or alleged to have been incurred
by Seller in connection with the sale of any of the Purchased Unit or the
consummation of the transactions contemplated by this Agreement.
Section 5.02 Indemnification by Purchaser. Purchaser agrees to
indemnify Seller and its officers, directors, employees and agents
(collectively, "Seller Related Parties") from, and hold each of them harmless
against any and all actions, suits, proceedings (including any investigations,
litigation, or inquiries), demands, and causes of action, and, in connection
therewith, and promptly upon demand, pay or reimburse each of them for all
reasonable costs, losses, liabilities, damages, or expenses of any kind or
nature whatsoever, including, without limitation, the reasonable fees and
disbursements of counsel and all other reasonable expenses incurred in
connection with investigating, defending or preparing to defend any such matter
that may be incurred by them or asserted against or involve any of them as a
result of, arising out of, or in any way related to the breach of any of the
representations, warranties or covenants of Purchaser contained herein, provided
such claim for indemnification relating to a breach of the representations and
warranties is made prior to the expiration of such representations and
warranties. Furthermore, Purchaser agrees that it will indemnify and hold
harmless Seller from and against any and all claims, demands, or
20
liabilities for broker's, finder's, placement, or other similar fees or
commissions incurred by Purchaser or alleged to have been incurred by Purchaser
in connection with the purchase of any of the Purchased Units or the
consummation of the transactions contemplated by this Agreement.
Section 5.03 Indemnification Procedures. Promptly after any Seller
Related Party or Purchaser Related Party (hereinafter, the "Indemnified Party")
has received notice of any indemnifiable claim hereunder, or the commencement of
any Action or proceeding by a third person, which the Indemnified Party believes
in good faith is an indemnifiable claim under this Agreement, the Indemnified
Party shall give the indemnitor hereunder (the "Indemnifying Party") written
notice of such claim or the commencement of such Action or proceeding, but
failure to so notify the Indemnifying Party will not relieve the Indemnifying
Party from any liability it may have to such Indemnified Party hereunder except
to the extent that the Indemnifying Party is materially prejudiced by such
failure. Such notice shall state the nature and the basis of such claim to the
extent then known. The Indemnifying Party shall have the right to defend and
settle, at its own expense and by its own counsel, any such matter as long as
the Indemnifying Party pursues the same diligently and in good faith. If the
Indemnifying Party undertakes to defend or settle, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in all commercially
reasonable respects in the defense thereof and the settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party's possession or
control. Such cooperation of the Indemnified Party shall be at the cost of the
Indemnifying Party. After the Indemnifying Party has notified the Indemnified
Party of its intention to undertake to defend or settle any such asserted
liability, and for so long as the Indemnifying Party diligently pursues such
defense, the Indemnifying Party shall not be liable for any additional legal
expenses incurred by the Indemnified Party in connection with any defense or
settlement of such asserted liability; provided, however, that the Indemnified
Party shall be entitled (i) at its expense, to participate in the defense of
such asserted liability and the negotiations of the settlement thereof and (ii)
if (A) the
21
Indemnifying Party has failed to assume the defense and employ counsel or (B) if
the defendants in any such Action include both the Indemnified Party and the
Indemnifying Party and counsel to the Indemnified Party shall have concluded
that there may be reasonable defenses available to the Indemnified Party that
are different from or in addition to those available to the Indemnifying Party
or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, then the Indemnified
Party shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of such Action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the Indemnifying Party as incurred.
Notwithstanding any other provision of this Agreement, the Indemnifying Party
shall not settle any indemnified claim without the consent of the Indemnified
Party, unless the settlement thereof imposes no liability or obligation on, and
includes a complete release from liability of, the Indemnified Party.
Section 5.04 Survival. The parties' obligations under this Article V
shall survive any termination of this Agreement.
ARTICLE VI.
MISCELLANEOUS
Section 6.01 Interpretation and Survival of Provisions. Article,
Section, Schedule, and Exhibit references are to this Agreement, unless
otherwise specified. All references to instruments, documents, contracts, and
agreements are references to such instruments, documents, contracts, and
agreements as the same may be amended, supplemented, and otherwise modified from
time to time, unless otherwise specified. The word "including" shall mean
"including but not limited to." Whenever a party has an obligation under the
Basic Documents, the expense of complying with that obligation shall be an
expense of such party unless otherwise specified. Whenever any determination,
consent, or approval is to be made or given by a party, such action shall be in
such party's sole discretion unless otherwise specified in this Agreement. If
any provision in any Basic Document is held to be illegal, invalid, not binding,
or unenforceable, such provision shall be fully severable and such Basic
Document shall be construed and enforced as if such illegal, invalid, not
binding, or unenforceable provision had never comprised a part of such
22
Basic Document, and the remaining provisions shall remain in full force and
effect. The Basic Documents have been reviewed and negotiated by sophisticated
parties with access to legal counsel and shall not be construed against the
drafter.
Section 6.02 Survival. The representations and warranties set forth
Section 3.10, Section 3.11, Section 4.02, Section 4.03, Section 4.05, Section
4.06 and Section 4.07 hereunder shall survive the execution and delivery of this
Agreement indefinitely, and the other representations and warranties set forth
herein shall survive for a period of twelve (12) months following the Closing
Date regardless of any investigation made by or on behalf of Seller or
Purchaser. The covenants made in this Agreement or any other Basic Document
shall survive the Closing of the transactions described herein and remain
operative and in full force and effect regardless of acceptance of any of the
Purchased Units and payment therefor and repayment, conversion, exercise or
repurchase thereof. All indemnification obligations of Seller and the provisions
of Article V shall remain operative and in full force and effect unless such
obligations are expressly terminated in a writing referencing that individual
Section, regardless of any purported general termination of this Agreement.
Section 6.03 No Waiver; Modifications in Writing.
(a) Delay. No failure or delay on the part of any party in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of any
right, power, or remedy. The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to a party at law or in
equity or otherwise.
(b) Specific Waiver. Except as otherwise provided herein, no
amendment, waiver, consent, modification, or termination of any provision of
this Agreement or any other Basic Document shall be effective unless signed by
each of the parties hereto or thereto affected by such amendment, waiver,
consent, modification, or termination. Any amendment, supplement or modification
of or to any provision of this Agreement or any other Basic Document, any waiver
of any provision of this Agreement or any other Basic Document, and any consent
to any
23
departure from the terms of any provision of this Agreement or any other Basic
Document shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement, no notice to or demand on a party in any case shall entitle such
party to any other or further notice or demand in similar or other
circumstances.
Section 6.04 Binding Effect, Assignment.
(a) Binding Effect. This Agreement shall be binding upon
Seller, Purchaser, and their respective successors and permitted assigns. Except
as expressly provided in this Agreement, this Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement, and their respective successors and permitted assigns.
(b) Assignment of Common Units. All or any portion of the
Common Units purchased pursuant to this Agreement may be sold, assigned or
pledged by Purchaser, subject to compliance with applicable securities laws and
Section 2.08 hereof.
(c) Assignment of Rights. All or any portion of the rights and
obligations of Purchaser under this Agreement may not be transferred by
Purchaser without the written consent of Seller, unless such transfer is to an
Affiliate of Purchaser.
Section 6.05 Communications. All notices and communications provided
for hereunder shall be in writing and shall be given by registered or certified
mail, return receipt requested, telecopy, air courier guaranteeing overnight
delivery or personal delivery to the following addresses:
(a) If to Purchaser:
Xxxxx Xxxxxxxx MLP Investment Company
0000 Xxxxxx xx xxx Xxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
24
with a copy to:
Xxxxx Xxxxxxxx MLP Investment Company
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx XxXxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to Seller:
Shell US Gas & Power LLC
0000 XxXxxxxx Xxxxxx, Xxxxx 000:
Xxxxxxx, Xxxxx 00000
Attention: L.B.D. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as Seller or Purchaser may designate in writing. All
notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; upon actual receipt if sent by
certified mail, return receipt requested, or regular mail, if mailed; when
receipt acknowledged, if sent via facsimile; and upon actual receipt when
delivered to an air courier guaranteeing overnight delivery.
Section 6.06 Press Release. In the event Purchaser or Seller desires to
issue any press release or otherwise make any public statement with respect to
the transactions contemplated hereby, the issuing party shall provide to the
other party a copy of such press release or statement at least two Business Days
in advance for review and comment. Each party agrees that it will not issue any
such press release or public statement if the receiving party reasonably objects
to such issuance within one Business Day of receipt. Notwithstanding the
foregoing, (i) neither party shall make any public statement that could
reasonably be construed to constitute a public solicitation or advertising for
the sale of Common Units in violation of the Securities Act, and (ii) Seller may
file an amendment to its Schedule 13D on file with the Commission to reflect the
disposition of the Purchased Units hereunder and file one or more Forms 4 with
the Commission, each as required by the Exchange Act.
25
Section 6.07 Entire Agreement. This Agreement and the other Basic
Documents are intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein with
respect to the rights granted by Seller or any of its Affiliates or Purchaser or
any of its Affiliates set forth herein or therein. This Agreement and the other
Basic Documents supersede all prior agreements and understandings between the
parties with respect to such subject matter, including, without limitation, any
term sheets.
Section 6.08 Governing Law. THIS AGREEMENT WILL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 6.09 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 6.10 Termination. In the event of the termination, this
Agreement shall forthwith become null and void and there shall be no liability
on the part of any party hereto, except as set forth in Article V of this
Agreement; provided that nothing herein shall relieve any party from any
liability or obligation with respect to any willful breach of this Agreement.
26
IN WITNESS WHEREOF, the parties hereto execute this Agreement,
effective as of the date first above written.
XXXXX XXXXXXXX MLP INVESTMENT COMPANY
By: /s/ Xxxxx Xxxxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Senior Managing Director and
General Counsel
SHELL US GAS & POWER LLC
By: /s/ L.B.D Xxxxxxx
--------------------------------------------
Name: L.B.D Xxxxxxx
Title: Vice President, Portfolio Management
27
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
See Attached
28
EXHIBIT B
FORM OF ASSIGNMENT AGREEMENT
See Attached
29
