EXHIBIT 1.1
EL PASO ENERGY PARTNERS, L.P.
COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
October 25, 2001
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
Credit Suisse First Boston Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
First Union Securities, Inc.
JPMorgan Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
El Paso Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), of which El Paso Energy Partners Company, a Delaware corporation
(the "General Partner"), is the general partner, proposes, subject to the terms
and conditions stated herein, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 4,150,000 common units
(the "Firm Units") representing limited partner interests in the Partnership
("Common Units") and, at the election of the Underwriters, up to 622,500
additional Common Units (the "Optional Units") of the Partnership (the Firm
Units and the Optional Units that the Underwriters elect to purchase pursuant to
Section 2 hereof being collectively called the "Units").
1. Each of the Partnership and the General Partner represents and
warrants to, and agrees with, each of the Underwriters that:
(a) The Partnership has prepared and filed with the Securities
and Exchange Commission (the "Commission") a registration statement
(file number 333-85987) on Form S-1, including a related base
prospectus, for registration under the Securities Act of 1933, as
amended (the "Act") of the offering and sale of the Units, and
Amendments Nos. 1, 2, and 3 thereto on Form S-3 (the "Initial
Registration Statement"). At the respective times of the filing of each
such Amendment and on the effective date of the Initial Registration
Statement, the Partnership met the requirements for use of Form S-3
under the Act. The Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Act, which became effective upon filing,
documents incorporated by reference in the base prospectus contained in
the Initial Registration Statement, any supplement filed thereto and
any documents incorporated by reference to such supplement, no other
document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus supplement to the base prospectus included in the Initial
Registration Statement, together with such base prospectus, that
describes the Units, the offering thereof and this Agreement, filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act and used prior to the
filing of the Prospectus (herein defined) is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto and including (i) the information contained in the
form of final prospectus supplement to the base prospectus included in
the Initial Registration Statement, filed with the Commission after the
date hereof pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Registration Statement at the time it was
declared effective and (ii) the documents incorporated by reference in
such final prospectus supplement are hereinafter collectively called
the "Registration Statement"; such final prospectus supplement, in the
form first filed pursuant to Rule 424(b) under the Act, together with
the base prospectus included in the Initial Registration Statement, is
hereinafter called the "Prospectus"; and any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case
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may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of
the Partnership filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Initial Registration
Statement that is incorporated by reference in the Registration
Statement as well as the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act.
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Partnership by an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly
for use therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Partnership by an Underwriter
through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein.
(d) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto, and as of
the applicable filing date as to the Prospectus and any amendment or
supplement
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thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Partnership by an Underwriter through
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein.
(e) The Partnership has been duly formed and is validly
existing as a limited partnership under the Delaware Revised Uniform
Limited Partnership Act (the "Delaware Act"), with full partnership
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business in each case as described in
the Registration Statement, the Preliminary Prospectus and as will be
described in the Prospectus, and has been qualified or registered to do
business as a foreign limited partnership and is in good standing under
the laws of each jurisdiction which requires such qualification, other
than any jurisdiction where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business.
"Subsidiary" of any person or entity means any corporation, limited
liability company, partnership (general or limited), joint venture or
other legal entity of which such person or entity (either alone or
through or together with any other Subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity interests the
holder of which is generally entitled to vote for the election of the
board of directors or other governing body of such corporation, limited
liability company, partnership, joint venture or other legal entity.
(f) The General Partner has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own or lease,
as the case may be, and to operate its properties, to conduct its
business and to act as general partner of the Partnership, as described
in the Registration Statement, the Preliminary Prospectus and as will
be described in the Prospectus, and has been qualified or registered to
do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification, other than
any jurisdiction where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, or
subject the limited partners of the Partnership to any material
liability or disability.
(g) The General Partner is the sole general partner of the
Partnership with a 1.0% general partner interest in the Partnership;
such general partner interest is duly authorized and validly issued to
the General Partner in accordance with the Second
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Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of August 31, 2000 (as amended, the "Partnership
Agreement"), which Partnership Agreement has been duly authorized,
executed and delivered by the General Partner and is a valid and
legally binding agreement of the General Partner, enforceable against
the General Partner in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer and conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally, (ii) general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or
in equity) and (iii) securities laws and public policy underlying such
laws with respect to rights to indemnification and contribution ((i),
(ii) and (iii), "Enforceability Exceptions"); the General Partner owns
such general partner interest free and clear of any lien, adverse
claim, security interest or other encumbrance, other than any lien,
adverse claim, security interest or other interest created in
connection with or permitted under (i) the Fifth Amended and Restated
Credit Agreement among the Partnership, El Paso Energy Partners Finance
Corporation, the several lenders from time to time parties thereto,
Credit Lyonnais, New York Branch and First Union National Bank, as
Co-Syndication Agents, Fleet National Bank and Fortis Capital Corp., as
Co-Documentation Agents, and The Chase Manhattan Bank, as
Administrative Agent, dated as of March 23, 1995, as amended and
restated through May 16, 2001, and the collateral documents related
thereto (the "Credit Agreement"), (ii) the credit agreement to which
Poseidon Oil Pipeline Company, L.L.C., a Delaware limited liability
company in which a subsidiary of the Partnership owns a 36% membership
interest, is party, and the collateral documents related thereto, (iii)
the financing arrangements to which Sabine River Investors I, L.L.C.
("Sabine I") and Sabine River Investors II, L.L.C. ("▇▇▇▇▇▇ ▇▇") are
parties, (iv) the credit agreement to which Argo, L.L.C., a Delaware
limited liability company and a wholly owned indirect subsidiary of the
Partnership, is party, and the collateral documents related thereto,
(v) the Indenture into which the Partnership entered on May 27, 1999,
as amended and supplemented, and (vi) the Indenture into which the
Partnership entered on May 17, 2001, as amended and supplemented (the
liens, adverse claims, security interests and other interests created
in connection with or permitted under clauses (i) - (vi) are referred
to as "Permitted Encumbrances").
(h) Sabine I, ▇▇▇▇▇▇ ▇▇ and ▇▇▇▇▇▇▇ Gas Storage, Inc.
("Crystal") own limited partner interests in the Partnership
represented by 8,953,764 Common Units and 170,000 Series B Preference
Units; all of such Common Units and Series B Preference Units and the
limited partner interests represented thereby have been duly authorized
and validly issued and are fully paid (to the extent required by the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Prospectus
under the caption "Risk Factors-Risks Inherent in an Investment in Our
Limited Partner Interests. You may not have limited liability in the
circumstances described below and may be liable for the return of
distributions that cause our liabilities to exceed our assets")
(hereinafter referred to as
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"Risk Factors-Limited Liability"); and Sabine I, ▇▇▇▇▇▇ ▇▇, and ▇▇▇▇▇▇▇
own such limited partner interests free and clear of any lien, adverse
claim, security interest or other encumbrance, other than Permitted
Encumbrances.
(i) The Partnership's authorized and outstanding partnership
interests are as set forth in the Preliminary Prospectus and as will be
set forth in the Prospectus; the partnership interests of the
Partnership and the Partnership Agreement conform in all material
respects to the descriptions thereof contained in the Preliminary
Prospectus and as will be contained in the Prospectus; all of the
outstanding Common Units and the limited partner interests represented
thereby have been duly and validly authorized and issued, are fully
paid and nonassessable (except as such nonassessability may be affected
by matters described in the Prospectus under the caption "Risk
Factors-Limited Liability") and are free of any preemptive or similar
rights, except as otherwise set forth in the Partnership Agreement; the
Units and the limited partner interests represented thereby have been
duly and validly authorized and, when issued, delivered and paid for by
the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable (except as such nonassessability may be affected by
matters described in the Prospectus under the caption "Risk
Factors-Limited Liability") and free of any preemptive rights or
similar rights, except as set forth in the Partnership Agreement, and
the Underwriters will acquire the Units free and clear of any lien,
adverse claim, security interest, equity or other encumbrance; and,
except as set forth in the Preliminary Prospectus and as will be set
forth in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for,
partnership interests or ownership interests in the Partnership are
outstanding, other than options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, partnership interests
or ownership interests in the Partnership included or described in any
of the Partnership Agreement and employee or non-employee director
option plans, employment agreements and other employment arrangements
to which the Partnership, the General Partner or their affiliates are
party with respect to the Partnership ("Existing Commitments").
(j) All of the issued and outstanding shares of capital stock
of the General Partner have been duly and validly authorized and issued
and are fully paid and nonassessable, and are owned by DeepTech
International Inc. ("DeepTech "), free and clear of any lien, adverse
claim, security interest, equity or other encumbrance, except for
Permitted Encumbrances. DeepTech is an indirect, wholly-owned
subsidiary of El Paso Corporation.
(k) The entities listed on Annex A are the only Subsidiaries
of the Partnership. All of the outstanding shares of capital stock,
limited partner interests, general partner interests or limited
liability company interests of each of the Partnership's Subsidiaries
have been duly and validly authorized and issued and are
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fully paid and (except (i) as required to the contrary by the Delaware
Limited Liability Company Act and the Delaware Act and (ii) with
respect to any general partner interests) nonassessable, and, except as
otherwise set forth in Annex A are owned by the Partnership, directly
or indirectly through one or more wholly-owned subsidiaries, free and
clear of any lien, adverse claim, security interest or other
encumbrance, other than Permitted Encumbrances.
(l) Each of the Partnership's Subsidiaries has been duly
formed or incorporated and is validly existing as a corporation,
limited partnership, general partnership or limited liability company
in good standing (except with respect to general partnerships) under
the laws of the jurisdiction in which it is chartered or organized,
with full entity power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described
in the Preliminary Prospectus and as will be described in the
Prospectus, and is duly qualified to do business as a corporation,
limited partnership, general partnership or limited liability company
and is in good standing (except with respect to general partnerships)
under the laws of each jurisdiction listed on Annex B, which are the
only jurisdictions which require such qualification, other than any
jurisdiction where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business.
(m) The Partnership, through its Subsidiaries (including Delos
Offshore Company, L.L.C. ("Delos"), and the Chaco Liquids Plant Trust
possess title to, and other interests in, the Chaco cryogenic natural
gas processing plant, as described in the Preliminary Prospectus and as
will be described in the Prospectus, subject to the Chaco Documents
(herein defined). El Paso Energy Partners Operating Company, L.L.C. is
the trustee of the Chaco Liquids Plant Trust.Delos Offshore Company,
L.L.C.
(n) There is no material franchise, contract or other document
of a character required to be described in the Registration Statement,
the Preliminary Prospectus and as will be described in the Prospectus,
or to be filed as an exhibit thereto, which is not described or filed
as required; the statements in the Preliminary Prospectus and the
statements that will be in the Prospectus under the headings
"Description of Limited Partner Interests," "Certain Other Partnership
Agreement Provisions," and "Income Tax Considerations," insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
(o) This Agreement has been duly authorized, executed and
delivered by the Partnership and the General Partner and constitutes a
valid and binding obligation of the Partnership and the General Partner
enforceable against the Partnership and the General Partner in
accordance with its terms, subject to Enforceability Exceptions.
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(p) Each of the Partnership and the General Partner is not
and, after giving effect to the offering and sale of the Units and the
application of the proceeds thereof as described in the Preliminary
Prospectus and as will be described in the Prospectus, will not be (i)
an "investment company" as defined in the Investment Company Act of
1940, as amended or (ii) a "holding company" within the meaning of, or
subject to regulation under, the Public Utility Holding Company Act of
1935, as amended, and the rules and regulations promulgated by the
Commission thereunder.
(q) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required by the New York
Stock Exchange (the "Exchange") or under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Units by the Underwriters in the manner contemplated herein, in the
Preliminary Prospectus and as will be contemplated in the Prospectus.
(r) Neither the issue and sale of the Units nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, or result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Partnership or any of its
Subsidiaries or the General Partner pursuant to, (i) the partnership
agreement, limited liability company agreement, charter, by-laws or
similar organizational document of the Partnership or any of its
Subsidiaries or the General Partner, as applicable, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Partnership or any of its
Subsidiaries or the General Partner is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Partnership or
any of its Subsidiaries or the General Partner of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Partnership or any of its
Subsidiaries or the General Partner or any of its or their properties,
except, in the case of (ii) or (iii), where such conflict, breach,
violation or imposition would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Partnership and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(s) No holders of securities of the Partnership have rights to
the registration of such securities under the Registration Statement
except for such rights (i) of the General Partner and its affiliates in
Section 6.14 of the Partnership Agreement; (ii) of EPEC Deepwater
Gathering Company ("EPEC") and its successors pursuant to the
Registration
8
Rights Agreement between EPEC and the Partnership which was executed in
connection with the acquisition by the Partnership of an additional
interest in Viosca ▇▇▇▇▇ Gathering Company; and (iii) of Crystal
pursuant to the Registration Rights Agreement between Crystal and the
Partnership which was executed in connection with the acquisition by
the Partnership of the Crystal storage facilities, (a) the General
Partner, Sabine I and ▇▇▇▇▇▇ ▇▇ have agreed not to exercise their
registration rights with respect to such securities in connection with
the offering of Units for 90 days hereafter pursuant to letter
agreements of even date herewith, and (b) the partnership interests
held by Sabine I and ▇▇▇▇▇▇ ▇▇ are subject to Permitted Encumbrances,
the holders of which have not waived such rights.
(t) The consolidated historical financial statements and
schedules of the Partnership and its consolidated Subsidiaries included
in the Preliminary Prospectus, the Registration Statement and that will
be included in the Prospectus present fairly in all material respects
the financial condition, results of operations and changes in financial
position of the Partnership and its consolidated Subsidiaries as of the
dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein). The selected financial data set forth under the caption
"Summary Historical and Pro Forma Consolidated Financial Data" in the
Preliminary Prospectus, the Registration Statement and that will be
included in the Prospectus fairly present, on the basis stated in the
Preliminary Prospectus, the Registration Statement and the basis that
will be stated in the Prospectus, the information included therein.
(u) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Partnership or any of its Subsidiaries or the General Partner or its or
their respective properties is pending or, to the knowledge of the
Partnership or the General Partner, threatened that (i) would
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) would reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Partnership and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Registration Statement or the Prospectus.
(v) Each of the Partnership and its Subsidiaries and the
General Partner owns or leases all such properties as are necessary to
the conduct of its operations as presently conducted, except where the
lack of such ownership or leasing would not, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business or properties of the Partnership and
its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
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(w) None of the Partnership, any of its Subsidiaries or the
General Partner is in violation or default of (i) any provision of its
partnership agreement, limited liability company agreement, charter,
by-laws or similar organizational document, as applicable, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or, to the knowledge of the General Partner
and the Partnership, any other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) to the knowledge of the General Partner
and the Partnership, any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Partnership or such Subsidiary or the General Partner or any
of their respective properties, except, in the case of (ii) and (iii),
where such violation or default would not, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business or properties of the Partnership and
its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(x) To the knowledge of the General Partner and the
Partnership: PricewaterhouseCoopers, LLP, who have certified certain
financial statements of the Partnership, Deepwater Holdings, L.L.C.,
Neptune Pipeline Company, L.L.C., VK-Deepwater Gathering Company,
L.L.C., Crystal Holding, L.L.C., Manta Ray Gathering Company, L.L.C.,
▇▇▇▇▇ Bank Gathering Company, L.L.C., El Paso Energy Partners Operating
Company, L.L.C., VK-Main Pass Gathering Company, L.L.C., El Paso Energy
Partners Deepwater, L.L.C., Delos Offshore Company, L.L.C., El Paso
Energy Partners Oil Transport, L.L.C., Poseidon Pipeline Company,
L.L.C., Flextrend Development Company, L.L.C., Crystal Holding, L.L.C.,
Green Canyon Pipeline Company, L.P., the General Partner and El Paso
Energy Partners Finance Corporation, and delivered their report with
respect to the audited financial statements and schedules for such
entities included in or incorporated by reference into the Preliminary
Prospectus and will be included in or incorporated by reference into
the Prospectus, are independent public accountants within the meaning
of the Act and the applicable published rules and regulations
thereunder; and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain
financial statements of Poseidon Oil Pipeline Company, L.L.C. and
delivered their report with respect to the audited financial statements
and schedules included in or incorporated by reference into the
Prospectus, are independent public accountants with respect to Poseidon
Oil Pipeline Company, L.L.C. within the meaning of the Act and the
applicable published rules and regulations thereunder.
(y) 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 or the issuance or sale of the
Units.
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(z) Each of the Partnership, its Subsidiaries and the General
Partner has filed all foreign, federal, state and local tax returns
that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business), except
as set forth in or contemplated in the Prospectus and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Preliminary Prospectus and as will
be set forth in or contemplated in the Prospectus.
(aa) No labor problem or dispute with the employees of the
Partnership or any of its Subsidiaries or the General Partner exists or
is threatened or imminent, and neither the Partnership nor the General
Partner is aware of any existing or imminent labor disturbance by the
employees of any of its or its Subsidiaries' principal suppliers,
contractors or customers, that would, individually or in the aggregate,
have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Partnership and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus.
(bb) Except as contemplated in the documents under which
Permitted Encumbrances arise, no Subsidiary of the Partnership is
currently prohibited, directly or indirectly, from paying any dividends
to the Partnership, from making any other distribution on such
Subsidiary's capital stock, limited liability company interests or
other 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 as described in or
contemplated by the Preliminary Prospectus and as will be described in
or contemplated by the Prospectus.
(cc) Each of the Partnership, its Subsidiaries and the General
Partner (i) possesses all licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective
businesses, and (ii) has not received any notice of proceedings
relating to the revocation or modification of any such license,
certificate, authorization or permit which, in the case of (i) and (ii)
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, or otherwise, would have a material adverse effect
on the condition (financial or otherwise), earnings, business or
properties of the
11
Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Preliminary Prospectus and as will
be set forth in or contemplated in the Prospectus.
(dd) Except as otherwise set forth in or contemplated in the
Preliminary Prospectus and as will be set forth in or contemplated in
the Prospectus, such as are not material to the condition (financial or
otherwise), earnings, business or properties of the Partnership and its
Subsidiaries, taken as a whole, or as do not materially interfere with
ownership or benefits of ownership of such properties, taken as a
whole, and except for Permitted Encumbrances, the Partnership and its
Subsidiaries have good and defensible title to their interests in their
oil and gas properties.
(ee) The information which was supplied by the Partnership to
Netherland, ▇▇▇▇▇▇ & Associates, Inc. ("Netherland & ▇▇▇▇▇▇"),
independent petroleum engineers, for purposes of evaluating the oil and
gas reserves of the Partnership and its subsidiaries as of December 31,
2000, including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to
current and future operations and sales of production, was, to the
knowledge of the General Partner and the Partnership, true and correct
in all material respects on the dates such estimates were made and such
information was supplied and was prepared in accordance with customary
industry practices, as indicated in the letter of Netherland & ▇▇▇▇▇▇
dated the date hereof (the "Netherland & ▇▇▇▇▇▇ Letter"); to the
General Partner's and the Partnership's knowledge, Netherland & ▇▇▇▇▇▇
was, as of the date of the Netherland & ▇▇▇▇▇▇ Letter, and is, as of
the date hereof, independent with respect to the Partnership and its
Subsidiaries; other than normal production of the reserves and
intervening spot market product price fluctuations, the Partnership is
not aware of any facts or circumstances that would result in a
materially adverse change in the reserves, or the present value of
future net cash flows therefrom, as described in the Preliminary
Prospectus or as will be described in the Prospectus and as reflected
in the Netherland & ▇▇▇▇▇▇ Letter and the reserve report referenced
therein; estimates of such reserves and present values as described in
the Preliminary Prospectus or as will be described in the Prospectus
and reflected in the Netherland & ▇▇▇▇▇▇ Letter and the reserve report
referenced therein comply in all material respects to the applicable
requirements of Regulation S-X and Industry Guide 2 under the Act.
(ff) Each of the Partnership and its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded
12
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(gg) Each of the Partnership and the General Partner and their
respective affiliates has not taken, directly or indirectly, any action
designed to or which has constituted or which would reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Units.
(hh) To the knowledge of the General Partner and the
Partnership, the Partnership, its Subsidiaries and the General Partner
are (i) in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where
such non- compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus. Except as set forth in
the Preliminary Prospectus or as will be set forth in the Prospectus,
to the knowledge of the General Partner and the Partnership, none of
the Partnership, any of its Subsidiaries or the General Partner have
been named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(ii) In the ordinary course of its business, the Partnership
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Partnership and its Subsidiaries, in
the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the
Partnership has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings,
business or properties of the Partnership and its Subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Preliminary Prospectus or as will be set forth in or contemplated in
the Prospectus.
13
(jj) Each of the Partnership, its Subsidiaries and the General
Partner has fulfilled its obligations, if any, under the minimum
funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee
Retirement Income Security Act of 1974 ("ERISA") and the regulations
and published interpretations thereunder with respect to each "plan"
(as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Partnership, its
Subsidiaries and the General Partner are eligible to participate and
each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and such regulations and
published interpretations. The Partnership, its Subsidiaries and the
General Partner have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums in
the ordinary course) or to any such plan under Title IV of ERISA.
(kk) Each of the Partnership, its Subsidiaries and the General
Partner has such consents, easements, rights-of-way or licenses from
any person ("rights-of-way") as are necessary to conduct its business
in the manner described in the Preliminary Prospectus or as will be
described in the Prospectus, subject to such qualifications as may be
set forth in the Preliminary Prospectus or as will be set forth in the
Prospectus, except for such rights-of-way which, if not obtained,
would, singly or in the aggregate, be expected not to have a have a
material adverse effect on the condition (financial or otherwise),
earnings, business or properties of the Partnership and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business; each of the
Partnership, its Subsidiaries and the General Partner has, or at the
First Time of Delivery (defined herein) will have, fulfilled and
performed all its material obligations with respect to such
rights-of-way and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or
would result in any impairment of the rights of the holder of any such
rights-of- way, except for such revocations, terminations and
impairments that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, subject
in each case to such qualifications as may be set forth in the
Prospectus; and except as set forth in the Preliminary Prospectus or as
will be set forth in the Prospectus, none of such rights-of-way
contains any restriction that is materially burdensome to the
Partnership and its Subsidiaries considered as a whole.
(ll) Except as disclosed in the Registration Statement and the
Prospectus, each of the Partnership and the General Partner (i) does
not have any material lending relationship with any bank or lending
affiliate of the Representatives and (ii) does not intend to use any of
the proceeds from the sale of the Units hereunder to repay any
outstanding debt owed to any affiliate of the Representatives.
(mm) Since the respective dates as of which information is
given in the Prospectus and except as set forth in or contemplated in
the Prospectus as of the date
14
hereof, (i) there has been no material adverse effect on the condition
(financial or otherwise), earnings, business, or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, (ii)
there has been no material adverse effect on the capital stock or in
the long-term debt of the Partnership or any of its Subsidiaries or the
General Partner and (iii) neither the Partnership nor any of its
Subsidiaries nor the General Partner has incurred any material
liability or obligation, direct or contingent, except for liability for
indebtedness incurred in the ordinary course of business.
(nn) Neither the Partnership nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes.
2. Subject to the terms and conditions herein set forth, (a) the
Partnership agrees to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Partnership, at a purchase price per unit of $37.31, the number of Firm Units
set forth opposite the name of such Underwriter in Schedule I hereto and (b) in
the event and to the extent that the Underwriters shall exercise the election to
purchase Optional Units as provided below, the Partnership agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Partnership, at the purchase price per
share set forth in clause (a) of this Section 2, that portion of the number of
Optional Units as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional Common Units) determined by
multiplying such number of Optional Units by a fraction, the numerator of which
is the maximum number of Optional Units which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Units that all of
the Underwriters are entitled to purchase hereunder.
The Partnership hereby grants to the Underwriters the right to purchase
at their election up to 656,250 Optional Units, at the purchase price per unit
set forth in the paragraph above, for the sole purpose of covering sales of
Common Units in excess of the number of Firm Units. Any such election to
purchase Optional Units may be exercised only by written notice from you to the
Partnership, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Units to be purchased
and the date on which such Optional Units are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Partnership otherwise agree in writing,
earlier than two or later than ten New York Business Days (defined herein) after
the date of such notice.
3. Upon the authorization by you of the release of the Firm Units, the
several Underwriters propose to offer the Firm Units for sale upon the terms and
conditions set forth in the Prospectus.
15
4. (a) The Units to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may request upon at least forty-eight hours' prior
notice to the Partnership shall be delivered by or on behalf of the Partnership
to ▇▇▇▇▇▇▇, Sachs & Co., through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Partnership to ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. at least forty-eight hours in advance. The Partnership will cause the
certificates representing the Units to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Units, 9:30 a.m., New York City time, on October
31, 2001 or such other time and date as ▇▇▇▇▇▇▇, Sachs & Co. and the Partnership
may agree upon in writing, and, with respect to the Optional Units, 9:30 a.m.,
New York time, on the date specified by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in the written
notice given by ▇▇▇▇▇▇▇, Sachs & Co. of the Underwriters' election to purchase
such Optional Units, or such other time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the
Partnership may agree upon in writing. Such time and date for delivery of the
Firm Units is herein called the "First Time of Delivery", such time and date for
delivery of the Optional Units, if not the First Time of Delivery, is herein
called the "Second Time of Delivery", and each such time and date for delivery
is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross receipt for the Units and any additional documents
requested by the Underwriters pursuant to Section 7(k) hereof, will be
delivered at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Closing Location"), and the Units will
be delivered at the Designated Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at 4:00 p.m., New York
City time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Agreement, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to
close.
5. Each of the Partnership and the General Partner agrees with each of
the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second New York Business
Day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement
16
(other than (i) a Current Report on Form 8-K (A) disclosing the terms
of this Agreement or (B) required in connection with the Chaco and
Deepwater transactions disclosed in the Prospectus and (ii) a Quarterly
Report on Form 10-Q covering the quarter ended September 30, 2001) to
the Registration Statement or Prospectus prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable
notice thereof; provided that you will not unreasonably disapprove any
such amendment or supplement; to advise you, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you
with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Partnership
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Units; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Units for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or prospectus or suspending any such qualification, promptly
to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Units for offering and sale under the
securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Units, provided that in connection
therewith neither the Partnership nor the General Partner shall be
required to qualify as a foreign entity or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with electronic copies of the
Prospectus in New York City in such quantities as you may reasonably
request; prior to 10:00 A.M., New York City time, on the second New
York Business Day succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written copies of the
Prospectus in New York City in such quantities as you may reasonably
request; and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Units and if
at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or
17
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such period to amend or
supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, to notify you and upon your request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and
electronic copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with
sales of any of the Units at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as many
written and electronic copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Partnership and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations thereunder (including, at the
option of the Partnership, Rule 158);
(e) Not to, and to cause Sabine I and ▇▇▇▇▇▇ ▇▇ to agree not
to, without the prior written consent of ▇▇▇▇▇▇▇, Sachs & Co., offer,
sell, contract to sell, pledge, or otherwise dispose of (or enter into
any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by
the Partnership, the General Partner, Sabine I, ▇▇▇▇▇▇ ▇▇ or any of
their subsidiaries or controlled affiliates, or any person in privity
(with respect to the Common Units) with the Partnership, the General
Partner, Sabine I, ▇▇▇▇▇▇ ▇▇ or any of their respective affiliates),
directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of,
or establishment or increase of a put equivalent position or
liquidation or decrease of a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any other
Common Units or any securities convertible into, or exercisable, or
exchangeable for, Common Units; or publicly announce an intention to
effect any such transaction, for a period of 90 days after the Time of
Delivery; provided, however, that the Partnership may issue and sell
Common Units pursuant to any employment agreement or other employment
arrangement, employee option plan, ownership plan or dividend
reinvestment plan of the Partnership in effect at the date and time
this Agreement is executed and the Partnership may issue Common Units
issuable upon the conversion of securities or the exercise of warrants
outstanding at the date and time this Agreement is executed; and
provided, further, that the foregoing shall not prohibit
18
Sabine I or ▇▇▇▇▇▇ ▇▇ from pledging any Common Units now or hereafter
owned by them, or a parent of such entities from pledging its interest
in such entities, to secure certain loans to such entities in
connection with any financing arrangements to which such entities are
parties, as amended or otherwise modified from time to time, or the
disposition of any such pledged Common Units, or any interest in such
entities, in connection with the exercise by the lender of any remedies
as a secured party.
(f) [intentionally omitted];
(g) During a period of one year from the effective date of the
Registration Statement, to deliver to you (i) as soon as they are
publicly available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Partnership is listed;
provided, however, that the Company shall not be required to deliver to
you any report or financial statements available on ▇▇▇▇▇, and (ii)
such additional information concerning the business and financial
condition of the Partnership as you may from time to time reasonably
request; provided that no such additional information must be delivered
if the delivery thereof would require the Partnership to make a public
fining to remain in compliance with Regulation FD (such financial
statements to be on a consolidated basis to the extent the accounts of
the Partnership and its subsidiaries are consolidated in reports
furnished to its unitholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of
the Units pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of
issuance, the Units on the Exchange;
(j) If the Partnership elects to rely upon Rule 462(b), the
Partnership shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Partnership shall at
the time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) under the Act;
(k) Upon request of any Underwriter, to furnish, or cause to
be furnished, to such Underwriter an electronic version of the
Partnership's trademarks, servicemarks and corporate logo for use on
the website, if any, operated by such Underwriter for the purpose of
facilitating the on-line offering of the Units (the "License");
provided, however, that the License shall be used solely for the
purpose described above, is granted without any fee and may not be
assigned or transferred; and
19
(l) Notwithstanding anything to the contrary in this
Agreement, the following transactions are specifically permitted, and
each representation, warranty and covenant of the Partnership or the
General Partner with respect to any period after the First Time of
Delivery is hereby amended by the following:
(i) Within five New York Business Days after the
First Time of Delivery, the Partnership shall issue and sell,
and the General Partner shall purchase, 1,477,070 Common Units
for cash at a price per share equal to the price at which
Common Units are offered to the public by the Prospectus, each
of which Common Units shall be subject to the agreements set
forth in Section 5(e) hereof;
(ii) Within five New York Business Days after the
Second Time of Delivery, if any, the Partnership shall issue
and sell, and the General Partner shall purchase, a number of
Common Units equal to approximately 35.63% of the Common Units
issued and sold to the Underwriters at the Second Time of
Delivery, for cash at a price per share equal to the price at
which Common Units are offered to the public by the
Prospectus, each of which Common Units shall be subject to the
agreements set forth in Section 5(e) hereof; and
(iii) Within 120 days after the First Time of
Delivery, the Partnership shall redeem from Crystal up to $50
million in liquidation value of Series B Preference Units for
cash.
6. Each of the Partnership and the General Partner covenants and agrees
with the several Underwriters that the Partnership will pay or cause to be paid
the following: (i) the fees, disbursements and expenses of the Partnership's
counsel and accountants in connection with the registration of the Units under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the Blue Sky
Memorandum, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Units; (iii) all expenses in connection with the qualification of the Units for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey
(iv) all fees and expenses in connection with listing the Units on the Exchange;
(v) the cost of preparing unit certificates; (vi) the costs and charges of any
transfer agent or registrar; and (vii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their
20
counsel, stock transfer taxes on resale of any of the Units by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Units to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Partnership and the General Partner herein are, at and as of such Time of
Delivery, true and correct, the condition that each of the Partnership and the
General Partner shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Partnership has elected to
rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) The Representatives shall have received from ▇▇▇▇▇▇▇ &
▇▇▇▇▇ L.L.P., counsel for the Underwriters, such opinion or opinions,
dated the Time of Delivery and addressed to the Representatives, with
respect to the issuance and sale of the Units, the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Partnership shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters;
(c) Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel for the
Partnership, shall have furnished to you their written opinion, dated
such Time of Delivery, in form and substance satisfactory to you, to
the effect that:
(i) each of the Partnership and its Subsidiaries has
been duly formed or incorporated and is validly existing as a
partnership, corporation or limited liability company and in
good standing (other than any general partnership) under the
laws of the jurisdiction in which it is formed, chartered or
organized, with full partnership, corporate or limited
liability company power and authority to own or lease, as the
case may be, and to operate its properties and conduct its
business as described in the Registration Statement and the
Prospectus;
(ii) each of the Partnership and its Subsidiaries is
duly qualified or registered to do business as a foreign
limited partnership, corporation or limited liability company,
as the case may be, and, based solely on the various
certificates from public officials of Texas, Louisiana and
Alabama (the "Good
21
Standing Certificates"), is in good standing (other than any
general partnership) as a foreign limited partnership,
corporation or limited liability company authorized to do
business in the respective jurisdictions listed on Annex B;
(iii) the General Partner has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with full corporate
power and authority to own or lease, as the case may be, and
to operate its properties, to conduct its business and to act
as general partner of the Partnership, as described in the
Registration Statement and the Prospectus, and has been duly
qualified or registered as a foreign corporation for the
transaction of business and, based solely on the Good Standing
Certificates, is in good standing under the laws of each
jurisdiction listed opposite its name on Annex B;
(iv) the General Partner is the sole general partner
of the Partnership and owns (of record) a 1.0% general partner
interest in the Partnership; such general partner interest is
duly authorized and validly issued to the General Partner in
accordance with the Partnership Agreement, which Partnership
Agreement, has been duly authorized, executed and delivered by
the General Partner and is a valid and legally binding
agreement of the General Partner, enforceable against the
General Partner in accordance with its terms, subject to
Enforceability Exceptions; to our knowledge, other than
Permitted Encumbrances, the General Partner owns such general
partner interest free and clear of any lien, adverse claim,
security interest or other encumbrance of record in respect of
which a financing statement under the Uniform Commercial Code
of the State of Delaware or Texas naming the General Partner
as debtor is on file in the office of the Secretary of State
of the State of Delaware or Texas;
(v) Sabine I and ▇▇▇▇▇▇ ▇▇ own (of record) limited
partner interests in the Partnership represented by 8,953,764
Common Units; all of such Common Units and the limited partner
interests represented thereby have been duly authorized and
validly issued and are fully paid (to the extent required by
the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the
Prospectus under the caption "Risk Factors-Limited
Liability"); to our knowledge, other than Permitted
Encumbrances, Sabine I and ▇▇▇▇▇▇ ▇▇ own such limited partner
interests free and clear of any lien, adverse claim, security
interest or other encumbrance of record in respect of which a
financing statement under the Uniform Commercial Code of the
State of Delaware or Texas naming Sabine I or ▇▇▇▇▇▇ ▇▇ as
debtor is on file in the office of the Secretary of State of
the State of Delaware or Texas;
22
(vi) all of the issued and outstanding shares of
capital stock of the General Partner have been duly and
validly authorized and issued and are fully paid and
nonassessable, and, to our knowledge, other than Permitted
Encumbrances, are owned by DeepTech free and clear of any
lien, adverse claim, security interest or other encumbrance of
record in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware or Texas
naming DeepTech as debtor is on file in the office of the
Secretary of State of the State of Delaware or Texas; DeepTech
is an indirect, wholly- owned subsidiary of El Paso
Corporation;
(vii) all the outstanding shares of capital stock,
limited liability company interests or other equity interests
of each Subsidiary have been duly and validly authorized and
issued and are (except with respect to partnership interests)
fully paid and (except (i) as provided to the contrary by the
Delaware Limited Liability Company Act or (ii) with respect to
partnership interests) nonassessable, and, except as otherwise
set forth in the Prospectus are owned by the Partnership
directly or indirectly through one or more Subsidiaries or the
General Partner, and, to our knowledge, other than Permitted
Encumbrances, are owned free and clear of any security
interest, claim, lien or other encumbrance of record in
respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware or Texas naming the
Partnership, El Paso Energy Partners Deepwater, L.L.C.,
Crystal Holding, L.L.C., First Reserve Gas, L.L.C.,
Hattiesburg Industrial Gas Sales Company, L.L.C., Argo II,
L.L.C. or Argo I, L.L.C. as debtor is on file in the office of
the Secretary of State of the State of Delaware or Texas;
(viii) the Partnership's authorized and outstanding
partnership interests are, to the knowledge of such counsel,
as set forth in the Prospectus; the partnership interests of
the Partnership and the Partnership Agreement conform in all
material respects to the descriptions thereof contained in the
Prospectus; all of the outstanding Common Units and the
limited partner interests represented thereby have been duly
and validly authorized and issued, are fully paid and
nonassessable (except as such nonassessability may be affected
by matters described in the Prospectus under the caption "Risk
Factors-Limited Liability") and are free of any preemptive or
similar rights, except as set forth in the Partnership
Agreement; the Units and the limited partner interests
represented thereby have been duly and validly authorized and,
when issued, delivered and paid for by the Underwriters
pursuant to this Agreement, will be fully paid and
nonassessable (except as such nonassessability may be affected
by matters described in the Prospectus under the caption "Risk
Factors-Limited Liability") and free of any preemptive rights
or similar rights, except as set forth in the Partnership
Agreement, and the Underwriters will acquire the Units free
and clear of any lien, adverse claim, security interest or
other encumbrance; and, except as set forth in the Prospectus,
no options, warrants or other rights
23
to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any
securities for, partnership interests or ownership interests
in the Partnership are outstanding, other than Existing
Commitments;
(ix) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened and the Registration Statement and the Prospectus
(other than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the Exchange
Act and the respective rules thereunder;
(x) this Agreement has been duly authorized, executed
and delivered by each of the Partnership and the General
Partner;
(xi) each of the Partnership and the General Partner
is not and, after giving effect to the offering and sale of
the Units and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as
amended;
(xii) to the knowledge of such counsel, no consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required by the
Exchange or under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Units by
the Underwriters in the manner contemplated in this Agreement
and in the Prospectus and such other approvals as have been
obtained;
(xiii) none of (a) the issue and sale of the Units,
(b) the consummation of any other of the transactions herein
contemplated and (c) the fulfillment of the terms hereof will
conflict with, or result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any
property or assets of the Partnership or its Subsidiaries or
the General Partner pursuant to, (i) the partnership
agreement, limited liability company agreement, charter,
by-laws or similar organizational document of the Partnership
or any of its Subsidiaries or the General Partner, as
applicable, (ii) the terms of any Material Agreement, or (iii)
to such counsel's knowledge, any statute, law, rule,
regulation, judgment, order or decree applicable to the
Partnership or any of its Subsidiaries or the General Partner
of any court, regulatory body, administrative agency,
24
governmental body, arbitrator or other authority having
jurisdiction over the Partnership or any of its Subsidiaries
or the General Partner or any of its or their properties,
except, in the case of (ii) or (iii), where such conflict,
breach, violation or imposition would not, individually or in
the aggregate, be likely to have, in the reasonable judgment
of such counsel, a material adverse effect on the condition
(financial or otherwise), earnings, business or properties of
the Partnership and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary
course of business; "Material Agreement" shall mean the
agreements listed on Annex D hereof (the "Chaco Documents")
and the agreements, contracts or other similar documents filed
as exhibits to the Registration Statement, the Partnership's
Annual Report on Form 10-K for the year ended December 31,
2000, the Partnership's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2001 and June 30, 2001, or the
Partnership's Current Reports on Form 8-K filed between
January 1, 2001 and the date hereof;
(xiv) The Tolling Agreement dated October 1, 2001
between El Paso Field Services, L.P. ("EFS") and Delos
Offshore Company, L.L.C. ("Delos") has been duly authorized,
executed and delivered by EFS and Delos and constitutes a
valid and binding obligation of EFS and Delos enforceable
against EFS and Delos in accordance with its terms, subject to
Enforceability Exceptions; The Chaco Documents have each been
duly authorized, executed and delivered by the Partnership
Subsidiaries party thereto;
(xv) to the knowledge of such counsel, no holders of
securities of the Partnership have rights to the registration
of Common Units under the Registration Statement except for
the rights (i) of the General Partner and its affiliates and
successors in Section 6.14 of the Partnership Agreement, (ii)
of EPEC and its successors pursuant to the Registration Rights
Agreement between EPEC and the Partnership which was executed
in connection with the acquisition by the Partnership of an
additional interest in Viosca ▇▇▇▇▇ Gathering Company and
(iii) of Crystal pursuant to the Registration Rights Agreement
between Crystal and the Partnership which was executed in
connection with the acquisition by the Partnership of the
Crystal storage facilities; and
(xvi) to the knowledge of such counsel: (a) there is
no franchise, contract or other document of a character
required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and (b) the statements
included or incorporated by reference in the Prospectus under
the headings "Description of Limited Partner Interests",
"Certain Other Partnership Agreement Provisions", and "Income
Tax Considerations", insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed
therein, are
25
accurate and fair summaries of such legal matters, agreements,
documents or proceedings.
Such counsel shall also state that although such counsel has
not undertaken, except as otherwise indicated in their opinion, to
determine independently, and does not assume any responsibility for,
the accuracy or completeness of the statements in the Registration
Statement and the Prospectus, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including
review and discussion of the contents thereof, and nothing has come to
the attention of such counsel that has caused them to believe: (i) that
the Registration Statement, on the effective date or the date hereof,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) that the Prospectus, as of
its date or as of the Time of Delivery, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or (iii)
that any amendment or supplement to the Prospectus, as of its
respective date, and as of the Time of Delivery, contained any untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (it being
understood that such counsel need express no opinion with respect to
the financial statements, the notes and the schedules thereto oil and
gas reserve information and other financial data included in the
Registration Statement or the Prospectus).
Such counsel shall also state that, with respect to (i) and
(ii) in paragraph (xv above, (a) the General Partner, Sabine I and
▇▇▇▇▇▇ ▇▇ have agreed not to exercise their registration rights with
respect to such securities in connection with the offering of Units for
90 days hereafter pursuant to letter agreements of even date herewith,
and (b) the Common Units held by the General Partner, Sabine I and
▇▇▇▇▇▇ ▇▇ are subject to Permitted Encumbrances, the holders of which
have not waived such rights.
In rendering such opinion, such counsel may (A) rely as to
matters involving the application of laws of any jurisdiction other
than the State of Delaware or the Federal laws of the United States, to
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters, of
which a copy of any such opinion shall be delivered to the
Underwriters, (B) rely as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Partnership and
public officials, (C) assume that the signatures on all documents
examined by such counsel are genuine, which assumptions they may state
they have not independently verified, (D) state that their opinion is
limited to federal laws, the Delaware Act, the Delaware General
Corporation Law, the Delaware Limited Liability Company Act, New York
law and Texas law, (E) state that they express no opinion with respect
to state or local taxes or tax statutes to which any of the
Partnership, the
26
limited partners of the Partnership or the General Partner may be
subject and (F) state that their opinion is furnished as counsel for
the Partnership and the General Partner to you, as Representatives of
the several Underwriters, and is solely for the benefit of the several
Underwriters. References to the Registration Statement and the
Prospectus in this paragraph (b) include any amendments and supplements
thereto at the Time of Delivery.
(d) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., counsel for the Partnership, or such
other counsel for the Partnership reasonably satisfactory to the
Representatives, shall have furnished to you his written opinion, dated
such Time of Delivery, in form and substance satisfactory to you, to
the effect that:
(i) to the knowledge of such counsel there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Partnership or any of its
Subsidiaries or the General Partner or its or their property
of a character required to be disclosed in the Prospectus
which is not adequately disclosed in the Prospectus, except
those that (a) would not be likely to have, in the reasonable
judgment of such counsel, a material adverse effect on the
performance of this Agreement or the consummation of any of
the transactions contemplated hereby or (b) would not be
likely to have, in the reasonable judgment of such counsel, a
material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto); and
(ii) each of the Partnership and the General Partner
is not and after giving effect to the offering and sale of the
Units and the application of the proceeds thereof as described
in the Prospectus, will not be a "holding company" within the
meaning of, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended, and the rules and
regulations promulgated by the Commission thereunder.
(e) The Partnership shall have requested and caused
PricewaterhouseCoopers LLP, at the time this Agreement is executed and
at such Time of Delivery, and shall have requested ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
at such Time of Delivery, to have furnished to the Underwriters
letters, dated as of the time of this Agreement and as of such Time of
Delivery, as the case may be, in form and substance satisfactory to the
Underwriters, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission thereunder
with respect to the Partnership, Partnership Subsidiary or Partnership
joint venture whose financial statements they have respectively audited
and containing the information and
27
statements of the type ordinarily included in accountants' "comfort
letters" to the Underwriters with respect to the financial statements
and certain financial information contained in the Registration
Statement and the Prospectus;
(f) The Partnership shall have requested and caused
Netherland, ▇▇▇▇▇▇ & Associates, Inc., at the time this Agreement is
executed and at such Time of Delivery, to have furnished to the
Underwriters letters, dated as of the time of this Agreement and as of
such time of Delivery, as the case may be, in form and substance
satisfactory to the Underwriters, confirming that they are independent
petroleum engineers with respect to evaluating the oil and gas reserves
of the Partnership and its Subsidiaries as of December 31, 2000
contained in the Registration Statement and the Prospectus;
(g) (i) None of the General Partner, the Partnership nor any
of its Subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in
the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information
is given in the Prospectus there shall not have been any change in the
capitalization or short-term or long-term debt of the General Partner,
the Partnership or any of its Subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, partners' equity or results of
operations of the General Partner, the Partnership and its
Subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Underwriters
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Units being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the General Partner's or the
Partnership's debt securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the General
Partner's or the Partnership's debt securities;
(i) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the Exchange; (ii) a suspension or
material limitation in trading in the Partnership's securities on the
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York or Texas State authorities or a
material
28
disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the
United States of a national emergency or war; or (v) the occurrence of
any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of
any such event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Units being delivered at
such Time of Delivery on the terms and in the manner contemplated in
the Prospectus;
(j) The Units to be sold at such Time of Delivery shall have
been duly listed, subject to notice of issuance, on the Exchange;
(k) The Partnership has obtained and delivered to the
Underwriters executed copies of an agreement from the General Partner,
Sabine I and ▇▇▇▇▇▇ ▇▇, substantially to the effect set forth in the
form attached hereto as Annex C;
(l) The Partnership shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(m) The Partnership and the General Partner shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Partnership and the General Partner
satisfactory to you as to the accuracy of the representations and
warranties of the Partnership and the General Partner herein at and as
of such Time of Delivery, as to the performance by the Partnership and
the General Partner of all of its obligations hereunder to be performed
at or prior to such Time of Delivery, as to the matters set forth in
subsections (a) and (g) of this Section and as to such other matters as
you may reasonably request.
8. (a) Each of the Partnership and the General Partner, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Partnership and the General Partner shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such
29
amendment or supplement in reliance upon and in conformity with written
information furnished to the Partnership by any Underwriter through ▇▇▇▇▇▇▇,
Sachs & Co. expressly for use therein; provided that with respect to any untrue
statement or omission of material fact made in any Preliminary Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased the Units concerned, to the extent that any such
loss, claim, damage or liability of such Underwriter occurs under the
circumstance where it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment that (w) the Partnership had
previously furnished copies of the Prospectus to the Underwriters, (x) delivery
of the Prospectus was required by the Act to be made to such person, (y) the
untrue statement or omission of a material fact contained in the Preliminary
Prospectus was corrected in the Prospectus and (z) there was not sent or given
to such person, at or prior to the written confirmation of the sale of such
securities to such person, a copy of the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the
Partnership and the General Partner against any losses, claims, damages
or liabilities to which either the Partnership, the General Partner or
both may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Partnership by
such Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use
therein; and will reimburse the Partnership and the General Partner for
any legal or other expenses reasonably incurred by the Partnership and
the General Partner in connection with investigating or defending any
such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel
30
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under
such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party,
in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
party is an actual or potential party to such action or claim) unless
such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such
action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Partnership and the General Partner on the one hand and the
Underwriters on the other from the offering of the Units. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Partnership and the General
Partner on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received
by the Partnership and the General Partner on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Partnership bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by the Partnership and the General Partnership on the one hand
or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Partnership, the General Partner and
the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro
rata allocation
31
(even if the Underwriters were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Units underwritten by it and
distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d)
to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Partnership and the General Partner
under this Section 8 shall be in addition to any liability which the
Partnership and the General Partner may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the General Partner and to each person, if
any, who controls the Partnership or the General Partner within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Units which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Units on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Units, then the Partnership shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Units on such terms. In the event that,
within the respective prescribed periods, you notify the Partnership that you
have so arranged for the purchase of such Units, or the Partnership notifies you
that it has so arranged for the purchase of such Units, you or the Partnership
shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Partnership agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this
32
Section with like effect as if such person had originally been a party to this
Agreement with respect to such Units.
(b) If, after giving effect to any arrangements for the
purchase of the Units of a defaulting Underwriter or Underwriters by
you and the Partnership as provided in subsection (a) above, the
aggregate number of such Units which remains unpurchased does not
exceed one-eleventh of the aggregate number of all the Units to be
purchased at such Time of Delivery, then the Partnership shall have the
right to require each non-defaulting Underwriter to purchase the number
of Common Units which such Underwriter agreed to purchase hereunder at
such Time of Delivery and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of
Units which such Underwriter agreed to purchase hereunder) of the Units
of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Units of a defaulting Underwriter or Underwriters by
you and the Partnership as provided in subsection (a) above, the
aggregate number of such Units which remains unpurchased exceeds
one-eleventh of the aggregate number of all the Units to be purchased
at such Time of Delivery, or if the Partnership shall not exercise the
right described in subsection (b) above to require non-defaulting
Underwriters to purchase Units of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time
of Delivery, the obligations of the Underwriters to purchase and of the
Partnership to sell the Optional Units) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter, the
Partnership or the General Partner, except for the expenses to be borne
by the Partnership, the General Partner and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Partnership, the General Partner and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Partnership or the General Partner, or any officer or
director or controlling person of the Partnership or the General Partner, and
shall survive delivery of and payment for the Units.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Partnership nor the General Partner shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason, the Units are not delivered by or on behalf of the
Partnership as provided herein, the Partnership and the
33
General Partner will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Units not so delivered,
but the Partnership and the General Partner shall then be under no further
liability to any Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by ▇▇▇▇▇▇▇, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., 85th ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Registration Department; and if to the Partnership shall be delivered or sent by
mail to the address of the Partnership set forth in the Registration Statement,
Attention: Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Partnership by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Partnership, the General Partner and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
General Partner and each person who controls the Partnership, the General
Partner or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Units from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
17. The Partnership is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, without the Underwriters imposing any limitation of any
kind.
34
If the foregoing is in accordance with your understanding, please sign
and return to us and upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a binding
agreement between each of the Underwriters and the Partnership and the General
Partner. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Partnership and the General Partner for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
EL PASO ENERGY PARTNERS, L.P.
By: El Paso Energy Partners Company,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
EL PASO ENERGY PARTNERS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
Accepted as of the date hereof:
▇▇▇▇▇▇▇, Sachs & Co.
Credit Suisse First Boston Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
First Union Securities, Inc.
JPMorgan Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates
By: /s/ ▇▇▇▇▇▇▇, SACHS & CO.
-------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co)
On behalf of each of the Underwriters
