EXECUTION COPY
EXHIBIT 4.L
UNITHOLDER AGREEMENT
BETWEEN
GULFTERRA ENERGY PARTNERS, L.P.
AND
XXXXXXXX INTERNATIONAL, INC.
DATED MAY 16, 2003
TABLE OF CONTENTS
PAGE
----
1. Definitions..............................................................................................1
2. Outstanding Units........................................................................................2
3. Representations of Xxxxxxxx..............................................................................2
4. Convertible Number.......................................................................................2
5. Prohibition on Short Sales...............................................................................2
6. Limited Market Stand Off.................................................................................3
7. Limits on Transferability................................................................................3
8. Covenant Regarding Partnership Bonds.....................................................................4
9. Public Disclosure........................................................................................4
10. Notices..................................................................................................5
11. Miscellaneous............................................................................................6
i
UNITHOLDER AGREEMENT
This
Unitholder Agreement (this "AGREEMENT"), dated as of May 16, 2003,
is by and between GulfTerra Energy Partners, L.P., a
Delaware limited
partnership (the "PARTNERSHIP"), and Xxxxxxxx International, Inc., a
Delaware
corporation ("XXXXXXXX").
WHEREAS, Xxxxxxxx desires to make an investment in the Partnership of
$40,000,000 in exchange for 1,118,881 Series A Common Xxxxx, 00 Series F1
Convertible Units and 80 Series F2 Convertible Units, which Series F1
Convertible Units and Series F2 Convertible Units will be convertible into
Series A Common Units (the Series A Common Units, the Series F1 Convertible
Units, the Series F2 Convertible Units and the underlying Series A Common Units,
collectively, the "UNITS") as provided in the Statement of Rights, Privileges
and Limitations of Series F Convertible Units (the "STATEMENT"), which is
attached as Annex A to, and incorporated in its entirety by, the Third Amendment
to the Second Amended and Restated Agreement of Limited Partnership of El Paso
Energy Partners, L.P. effective as of the date hereof, all pursuant to a
prospectus supplement dated as of the date hereof; and
WHEREAS, the Partnership and Xxxxxxxx have agreed to certain terms and
conditions in connection with Xxxxxxxx'x investment in the Partnership;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the parties hereto agree as follows:
1. DEFINITIONS. All undefined capitalized terms used herein shall have
the meaning set forth in the Statement. In addition, as used herein, unless the
context otherwise requires, the following terms have the following respective
meanings:
1.1 65 DAY NOTICE is defined in Section 4.
1.2 AFFILIATE means with respect to any Person, any other
Person that directly or indirectly Controls, is Controlled by or is
under common Control with, the Person in question.
1.3 AGREEMENT is defined in the introduction, as amended,
supplemented or otherwise modified from time to time.
1.4 CONTROL ("CONTROLS" and "CONTROLLED") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person whether through
ownership of voting securities, by contract or otherwise.
1.5 CONVERTIBLE PERIOD means the period commencing on the date
hereof and ending on the Termination Time.
1.6 CONVERTIBLE NUMBER is defined in Section 4.
1.7 XXXXXXXX is defined in the introduction to the Agreement.
1
1.8 XXXXXXXX NUMBER means the sum of 4,495,425 and the
Convertible Number.
1.9 INITIAL CLOSING means the date on which the closing of the
purchase by Xxxxxxxx of 1,118,881 Series A Common Xxxxx, 00 Series F1
Convertible Units and 80 Series F2 Convertible Units occurs.
1.10 PARTNERSHIP is defined in the introduction to the
Agreement.
1.11 PUBLIC OFFERING PERIOD means each period commencing on
the day on which Xxxxxxxx responds to the Partnership's notice of its
intention to effect a public offering and ending on the day on which
such public offering closes.
2. OUTSTANDING UNITS. The Partnership hereby represents and warrants
that as of the date hereof and prior to the issuance by the Partnership of
1,118,881 Series A Common Units to Xxxxxxxx, there are issued and outstanding at
least 47,484,314, but no more than 47,584,314, Series A Common Units.
3. REPRESENTATIONS OF XXXXXXXX. Xxxxxxxx hereby represents and warrants
that as of the date hereof:
3.1 Xxxxxxxx is a large institutional accredited investor;
3.2 Xxxxxxxx is acquiring the Series A Common Units and the
Series F Convertible Units for its own account and in the ordinary
course of its business and is not participating in the distribution,
and has no arrangement or understandings with any Person to participate
in a distribution of the Series A Common Units or the Series F
Convertible Units;
3.3 Xxxxxxxx is not a registered "broker" or "dealer" as such
terms are defined in Section 3 of the Exchange Act; and
3.4 None of Xxxxxxxx or its Affiliates has (i) during the
sixty (60) Business Day period ending on the date hereof (a) engaged in
any "short sales" (as such term is defined by the Exchange Act Rule
3b-3) of Series A Common Units or (b) purchased, acquired, sold or
terminated an interest in any stock index, portfolio or derivative in
which the Series A Common Units comprised more than 35% of the value of
the total assets (as determined based on Xxxxxxxx'x reasonable
discretion) of such stock index, portfolio or derivative at the time of
such purchase or acquisition or at the time of creation, if such stock
index, portfolio or derivative was created by Xxxxxxxx or any of its
Affiliates, or (ii) as of the date hereof, a "short" position with
respect to the Series A Common Units.
4. CONVERTIBLE NUMBER. Notwithstanding the provisions of the Section
2.1 of the Statement to the contrary, the aggregate number of Series A Common
Units issuable upon conversion of the Series F Convertible Units owned by
Xxxxxxxx and its Affiliates, when combined with Series A Common Units then
beneficially owned (as determined pursuant to Rule 13d-3 of the Exchange Act) by
Xxxxxxxx, shall not exceed the current Xxxxxxxx Number. The
2
"CONVERTIBLE NUMBER" shall initially be zero (0) and thereafter shall be
increased upon expiration of a sixty-five (65) day period after Xxxxxxxx
delivers a notice (a "65 DAY NOTICE") to the Partnership designating an
aggregate number of Series A Common Units in excess of the Xxxxxxxx Number which
shall become issuable upon conversion of the Series F Convertible Units then
owned by Xxxxxxxx, such number, however, shall not result in the total number of
Series A Common Units issued or issuable upon conversion of all Series F
Convertible Units to exceed the Maximum Number. Xxxxxxxx shall be entitled to
tender a 65 Day Notice at any time. The Partnership shall, within 2 Business
Days of receipt of a written request from Xxxxxxxx, give Xxxxxxxx the number of
Series A Common Units outstanding as of the date of such notice. If a
Partnership Interest Adjusting Event occurs, the Xxxxxxxx Number shall be
proportionately adjusted.
5. PROHIBITION ON SHORT SALES. During the Convertible Period, Xxxxxxxx
shall not, and shall cause its Affiliates not to, engage in "SHORT SALES" (as
such term in defined by the Exchange Act Rule 3b-3) of Series A Common Units, it
being understood that nothing in this Agreement shall prohibit Xxxxxxxx or any
of its Affiliates from purchasing, acquiring, selling or terminating an interest
in any stock index, portfolio or derivative of which Series A Common Units are a
component; provided, that the Series A Common Units shall not comprise more than
35% of the value of the total assets (as determined based on Xxxxxxxx'x
reasonable discretion) of such stock index, portfolio or derivative at the time
of (i) the creation of such stock index, portfolio or derivative if created by
Xxxxxxxx or its Affiliates, or (ii) the purchase or acquisition of an interest
in an existing stock index, portfolio or derivative by Xxxxxxxx or its
Affiliates. The provisions of this Section 5 shall not apply to any Person other
than Xxxxxxxx and its Affiliates.
6. LIMITED MARKET STAND OFF. During the Convertible Period, within
three Business Days of notification by the Partnership of its intention to
affect a public offering of its Series A Common Units, Xxxxxxxx shall notify the
Partnership of the number of Series A Common Units that Xxxxxxxx and its
Affiliates, in good faith, intend to, and have a reasonable basis to believe
that they can, sell or cause to be sold (directly or indirectly) into the
market, on one or more exchanges, quotation systems or over-the-counter market
transactions, block trades to broker-dealers and ordinary brokerage
transactions, but excluding bona-fide pledges, gifts and transfers to partners,
members and shareholders during the Public Offering Period; provided, however,
that in no event shall any Public Offering Period be greater than fourteen (14)
Business Days. During a Public Offering Period, Xxxxxxxx and its Affiliates
shall not sell or cause to be sold (directly or indirectly) into the market, on
one or more exchanges, quotation systems or over-the-counter market
transactions, block trades to broker-dealers and ordinary brokerage
transactions, but excluding bona-fide pledges, gifts and transfers to partners,
members and shareholders more than the number of Series A Common Units disclosed
in such notice to the Partnership. After the consummation of the public
offering, Xxxxxxxx and its Affiliates shall have no restrictions on resale of
Series A Common Units that they own, subject to the Partnership's ability to
send an unlimited number of such notices in the future and Xxxxxxxx'x (and its
Affiliate's) limitation on resale as designated in its reply notice to the
Partnership.
7. LIMITS ON TRANSFERABILITY. Xxxxxxxx shall not sell, transfer or
otherwise dispose of the Series F Convertible Units without the prior written
consent of the Partnership, which consent shall be within the sole discretion of
the Partnership; provided, that notwithstanding the provisions of Section 6 of
the Statement, Xxxxxxxx shall also be entitled to sell, transfer or
3
otherwise dispose of the Series F Convertible Units (i) to any Affiliate that
remains an Affiliate of Xxxxxxxx while it holds unconverted Series F Convertible
Units so long as each Affiliate assumes the obligations of Xxxxxxxx under this
Agreement (provided, that such assumption shall not operate to release Xxxxxxxx
from its obligations under this Agreement unless the Partnership consents to
such release in writing, which consent shall be given or withheld in the
Partnership's sole discretion); (ii) in connection with distributions by
Xxxxxxxx or its Affiliates to their respective partners, members or shareholders
in accordance with the respective governing documents of Xxxxxxxx or its
Affiliates; (iii) pursuant to pledges (including any sale, transfer or other
disposition that occurs upon a default under such pledge) in connection with
bona-fide financing transactions, (iv) to a QIB, (v) to large institutional
accredited investors and (vi) to insurance companies and similar institutional
investors whose business is to invest funds entrusted to such entity provided
that the Series F Convertible Units are acquired by such entity in the ordinary
course of their business from Xxxxxxxx and such transferee has no arrangement or
understanding with any person to participate in the distribution of such
securities; except Xxxxxxxx cannot effect a sale, transfer or other disposition
of Series F Convertible Units pursuant to clauses (i), (ii) and (iii) above
unless such sale, transfer or other disposition would be permissible under
securities laws and except that Xxxxxxxx cannot effect a sale, transfer or other
disposition of Series F Convertible Units to more than one (1) Person, which
Person must satisfy one of the requirements of clauses (i) through (vi) above,
subject to Section 6 above and this Section 7. Further, Xxxxxxxx shall not
knowingly sell, transfer or otherwise dispose of any Series F Convertible Units
to any Person who has acquired the Series F Convertible Units with the purpose,
or with the effect of, changing or influencing the control of the Partnership,
or in connection with or as a participant in any transaction having that purpose
or effect, including any transaction subject to Rule 13d-3(b) of the Exchange
Act, except if the Partnership gives its prior written approval to such
transfer, which approval may be withheld or granted in its sole discretion;
provided, however, that no such written approval shall be necessary and the
Series F Convertible Units shall be freely transferable (x) if the Board of
Directors of the General Partner has recommended approval of such transaction
and has not withdrawn its recommendation or (y) to the Acquiring Person in
connection with a Business Combination where the Board of Directors of the
General Partner has recommended approval of such Business Combination and has
not withdrawn its recommendation.
8. COVENANT REGARDING PARTNERSHIP BONDS. The Partnership hereby agrees
that it shall use commercially reasonable efforts to obtain permission for the
Partnership to effect a redemption, purchase, retirement or other acquisition of
Partnership Bonds in connection with the tender of such Partnership Bonds as
payment of the Conversion Consideration, as contemplated by the Statement under
its Sixth Amended and Restated Credit Agreement, or any replacement or future
credit agreement, or any other agreement imposing restrictions on the
Partnership's ability to accept Partnership Bonds as payment of the Conversion
Consideration as contemplated by the Statement. The Partnership shall provide
Xxxxxxxx with written notice as promptly as possibly but no later than within
(a) seven (7) Business Days of receipt of such permission or the cessation of
any circumstance that otherwise prohibits the tender of Partnership Bonds as
payment of the Conversion Consideration, and (b) five (5) Business Days of the
existence of any circumstance that would prevent a Holder from tendering
Partnership Bonds as payment of the Conversion Consideration, as contemplated by
the Statement. In addition, within one (1) Business Day of its receipt of a
written request from Xxxxxxxx, the Partnership shall confirm the status to
Xxxxxxxx of the occurrence of clause (a) above or the existence of any
4
circumstance set forth in clause (b) above. Notwithstanding the foregoing,
nothing in this Section 8 shall be construed as prohibiting the Partnership from
entering into an amendment to, or a replacement of, its existing credit
agreements or into any future credit agreements that do not permit the
redemption of Partnership Bonds as contemplated by the Statement.
9. PUBLIC DISCLOSURE. The Partnership shall:
9.1 within one (1) Business Day after and excluding the date
of the Initial Closing, publicly distribute a press release disclosing
the material terms of the transaction occurring on the Initial Closing;
and
9.2 within three (3) Business Days after and excluding each of
(x) the Initial Closing Date and (y) each Conversion Closing Date on
which the Conversion Consideration tendered on such Conversion Closing
Date exceeds 2.5% of the product of (1) the closing price of Series A
Common Units on the Business Day immediately preceding such Conversion
Closing Date and (2) the number of Series A Common Units outstanding
immediately before such Conversion Closing Date, file with the SEC a
Current Report on Form 8-K with respect to the same.
In each case, if the Partnership specifically identifies Xxxxxxxx by its name in
any release or Current Report on Form 8-K, the Partnership will provide Xxxxxxxx
will a reasonable opportunity, which shall not be less than two (2) Business
Days, to review and comment on such public disclosure by the Partnership;
provided that the Partnership shall be entitled to accept or reject Xxxxxxxx'x
comments in its sole discretion. No such review and comment opportunity shall be
required if the public disclosure does not use Xxxxxxxx'x name.
10. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be delivered by a nationally recognized overnight
courier, return receipt requested, postage prepaid, addressed as provided below:
(i) If to the Partnership:
GulfTerra Energy Partners, L.P.
0 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
Attn: J. Xxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxx - Xxxxx 0000
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
5
(ii) If to Xxxxxxxx:
Xxxxxxxx International, Inc.
c/x Xxxxxxxx Asset Management, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such notice or communication shall be deemed received (i) when made, if by
hand delivery, and upon confirmation of receipt, if made by facsimile, and in
each case if such notice is received on or before 11:59 p.m. New York City time,
otherwise, such notice shall be deemed to be received the following Business Day
(ii) one Business Day after being deposited with a next-day courier, return
receipt requested, postage prepaid or (iii) three Business Days after being sent
certified or registered mail, return receipt requested, postage prepaid, in each
case addressed as above (or to such other addresses as the Partnership or
Xxxxxxxx may designate in writing from time to time).
11. MISCELLANEOUS.
11.1 CONSTRUCTION. Headings or other titles used in this
Agreement are for convenience only and neither limit nor amplify the
provisions of this Agreement, and all references herein to sections or
subdivisions thereof will refer to the corresponding section or
subdivision thereof of this Agreement unless specific reference is made
to such sections or subdivisions of another document or instrument.
Unless the context of this Agreement clearly requires otherwise, the
words "include," "includes" and "including" will be deemed to be
followed by the words "without limitation," and the words "hereof,"
"herein," "hereunder" and similar terms in this Agreement will refer to
this Agreement as a whole and not any particular section or article in
which such words appear. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice-versa. References in this
Agreement to any party shall include such party's successor. The word
"shall" means will and vice versa.
6
11.2 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE LAW OF THE STATE OF
DELAWARE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
11.3 REMEDIES. Except as expressly provided in this Agreement,
the rights, obligations and remedies created by this Agreement are
cumulative and in addition to any other rights, obligations or remedies
otherwise available at law or in equity. Nothing herein shall be
considered an election of remedies.
11.4 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous arrangements or
undertakings with respect thereto.
11.5 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute an agreement
binding on all of the parties to this Agreement, notwithstanding that
all such parties are not signatories to the original or the same
counterpart.
11.6 INVALIDITY OF PROVISIONS. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
11.7 AMENDMENT; WAIVER. This Agreement shall not be modified,
amended, supplements, canceled, or discharged, except by written
instrument executed by the Partnership and Xxxxxxxx. No failure to
exercise, and no delay in exercising, any right, power or privilege
under this Agreement shall operate as a waiver, nor shall any single or
partial exercise of any right, power or privilege under this Agreement
preclude the exercise of any other right, power or privilege. No waiver
of any breach of any provisions of this Agreement shall be deemed to be
a waiver of any preceding or succeeding breach of the same or any other
provisions, nor shall any waiver be implied from any course of dealing
between the parties. No extension of time for performance of any
obligations or other acts under this Agreement shall be deemed to be an
extension of the time for performance of any other obligations of any
other acts.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
7
The parties hereto have caused this Agreement to be duly executed and
delivered as of the date first written above.
GULFTERRA ENERGY PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Chief Financial
Officer
XXXXXXXX INTERNATIONAL, INC.
by its duly authorized investment advisor,
Xxxxxxxx Asset Management, Inc.
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxx X. Xxxx
Title: Authorized Signatory
Unitholder Agreement Signature Page
