EL PASO ENERGY PARTNERS, L.P.
4,000,000 Common Units
Representing Limited Partner Interests
Underwriting Agreement
New York, New York
July 24, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
As Representatives of the several Underwriters
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
El Paso Energy Partners, L.P., a limited partnership
organized under the laws of Delaware (the "Partnership") of which
El Paso Energy Partners Company, a Delaware corporation (the
"General Partner"), is the general partner, proposes to issue and
sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting
as representatives, 4,000,000 common units ("Firm Units")
representing limited partner interests in the Partnership
("Common Units") (said Firm Units to be issued and sold by the
Partnership being hereinafter called the "Underwritten
Securities"). The Partnership also proposes to grant to the
Underwriters an option to purchase up to 600,000 additional
Common Units to cover over-allotments (the "Option Securities";
the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there
are no additional Underwriters listed on Schedule I other than
you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires.
Any reference herein to the Registration Statement, a 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 which were filed under the Exchange Act on
or before the Execution Time with respect to the Registration
Statement or a Preliminary Prospectus and on or before the issue
date of the Prospectus with respect to the Prospectus, including
any amendments and supplements thereto, as the case may be; and
any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the
issue date of any Preliminary Prospectus or the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
Certain terms used herein are defined in Section 17 hereof. Any
reference to the Registration Statement, a Preliminary Prospectus
or the Prospectus followed by the parenthetical phrase
"(exclusive of any supplements thereto)" or any similar
parenthetical phrase shall be deemed to mean such document,
exclusive of any amendment or supplement which is filed after the
Execution Time (with respect to the Registration Statement or a
Preliminary Prospectus) or after the issue date of the Prospectus
(with respect to the Prospectus).
1. Representations and Warranties. Each of the
Partnership and the General Partner represents and warrants to,
and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Partnership has prepared and filed with the
Commission a registration statement (file number 333-85987)
on Form S-1, including a related base prospectus, for
registration under the Act of the offering and sale of the
Securities, and an Amendment No. 1 thereto on Form S-3. At
the time of the filing of such Amendment No. 1 and on the
Effective Date of such Registration Statement, the
Partnership met or will meet the requirements for use of
Form S-3 under the Act. The Partnership may have filed one
or more additional amendments and supplements to the
Registration Statement, including a related preliminary
prospectus supplement, each of which has previously been
furnished to you. The Partnership will next file with the
Commission one of the following: either (1) prior to the
Effective Date of such Registration Statement, a further
amendment to such Registration Statement (including the form
of final prospectus) or (2) after the Effective Date of such
Registration Statement, a final prospectus supplement to the
base prospectus in the form included in such Registration
Statement, together with such base prospectus, in accordance
with Rules 430A and 424(b). In the case of clause (2), the
Partnership has included in such Registration Statement, as
amended and supplemented at the Effective Date or the issue
date of the Prospectus, as applicable, all information
(other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such Registration
Statement. As filed, such amendments and supplements and
form of final prospectus, or such final prospectus
supplement and base prospectus, shall contain all Rule 430A
Information, together with all other such required
information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Partnership has
advised you, prior to the Execution Time, will be included
or made therein.
(b) On the Effective Date, the Registration Statement
did, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as
defined herein) and on any date on which Option Securities
are purchased, if such date is not the Closing Date (a
"settlement date"), the Prospectus (as amended or
supplemented to such date) will, comply in all material
respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration
Statement did not contain any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading; and, on the Execution Time, the
Preliminary Prospectus did not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date and
any settlement date, the Prospectus will not, include any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the
Partnership and the General Partner make no representations
or warranties as to the information contained in or omitted
from the Registration Statement, or the Prospectus in
reliance upon and in conformity with information furnished
in writing to the Partnership by or on behalf of any
Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus.
(c) 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 and 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.
(d) 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 and 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.
(e) 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 Amended and Restated Agreement of
Limited Partnership of the Partnership dated as of February
19, 1993 (as amended, the "Partnership Agreement"), which
Partnership Agreement, at or before the Closing Date, 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; the General Partner owns such general partner
interest free and clear of any lien, adverse claim, security
interest or other encumbrance, other than Permitted
Encumbrances.
(f) The General Partner, EPEC Deepwater Gathering
Company ("EPEC"), Sabine River Investors I, L.L.C. ("Sabine
I") and Sabine River Investors II, L.L.C. ("▇▇▇▇▇▇ ▇▇") own
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 Preliminary 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 "Risk Factors-Limited Liability"); and the General
Partner and its affiliates own such limited partner
interests free and clear of any lien, adverse claim,
security interest or other encumbrance, other than Permitted
Encumbrances.
(g) As of the Execution Time: the Partnership's
authorized and outstanding partnership interests are as set
forth in the Preliminary 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; 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
Preliminary 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 Securities 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
Preliminary 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
Securities free and clear of any lien, adverse claim,
security interest, equity or other encumbrance; and, except
as set forth in the Preliminary 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 Existing Commitments.
(h) 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 El Paso Energy Partners
Holding Company ("Holding Company"), free and clear of any
lien, adverse claim, security interest, equity or other
encumbrance, except for Permitted Encumbrances. Holding
Company is an indirect, wholly-owned subsidiary of El Paso
Energy Corporation.
(i) As of the Execution Time, the entities listed on
Annex A are the only Subsidiaries of the Partnership. All
of the outstanding shares of capital stock, limited partner
interests, general partner interests or limited liability
company interests of each of the Partnership's Subsidiaries
have been duly and validly authorized and issued and are
fully paid and (except (i) as required to the contrary by
the Delaware Limited Liability Company Act and the Delaware
Revised Uniform Limited Partnership Act and (ii) with
respect to any general partner interests) nonassessable,
and, except as otherwise set forth in the Preliminary
Prospectus (exclusive of any supplement) are owned by the
Partnership, directly or indirectly through one or more
wholly-owned subsidiaries or the General Partner, free and
clear of any lien, adverse claim, security interest or other
encumbrance, other than Permitted Encumbrances.
(j) 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 (other than
Viosca ▇▇▇▇▇ Gathering Company) 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 is
duly qualified to do business as a corporation, limited
partnership, general partnership or limited liability
company and is in good standing 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.
(k) There is no material franchise, contract or other
document of a character required to be described in the
Registration Statement or Preliminary Prospectus, or to be
filed as an exhibit thereto, which is not described or filed
as required; the statements in the Preliminary 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.
(l) 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.
(m) Each of the Partnership and the General Partner is
not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as
described in the Preliminary 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.
(n) 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 or
under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the
Preliminary Prospectus.
(o) Neither the issue and sale of the Securities 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) to
the knowledge of the General Partner and the Partnership,
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.
(p) 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 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) as contemplated
by the letter of intent dated July 11, 2000, between Crystal
Gas Storage, Inc. and the Partnership; provided, however,
that with respect to (i) and (ii) above, (a) the General
Partner, EPEC, Sabine I and ▇▇▇▇▇▇ ▇▇ have agreed not to
exercise their rights with respect to such securities in
connection with the offering of Securities for 90 days
hereafter pursuant to letter agreements of even date
herewith, and (b) the partnership interests held by the
General Partner, EPEC, Sabine I and ▇▇▇▇▇▇ ▇▇ are subject to
Permitted Encumbrances, the holders of which have not waived
such rights.
(q) The consolidated historical financial statements
and schedules of the Partnership and its consolidated
subsidiaries included in the Preliminary Prospectus and the
Registration Statement present fairly in all material
respects the financial condition, results of operations and
changes in financial position of the Partnership and its
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 "Selected Historical Consolidated
Financial Data" in the Preliminary Prospectus and
Registration Statement fairly present, on the basis stated
in the Preliminary Prospectus and the Registration
Statement, the information included therein.
(r) 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 property
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
Preliminary Prospectus (exclusive of any supplement
thereto).
(s) 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.
(t) 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 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, to
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 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 its properties, as applicable, 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.
(u) To the knowledge of the General Partner and the
Partnership: PricewaterhouseCoopers, LLP, who have certified
certain financial statements of the Partnership and Neptune
Pipeline Company, L.L.C., and delivered their report with
respect to the audited consolidated financial statements and
schedules included in or incorporated by reference into the
Preliminary Prospectus, are independent public accountants
with respect to the Partnership and Neptune Pipeline
Company, L.L.C. within the meaning of the Act and the
applicable published rules and regulations thereunder;
Deloitte & Touche LLP, who have certified certain financial
statements of Western Gulf Holdings, L.L.C. and delivered
their report with respect to the audited consolidated
financial statements and schedules included in or
incorporated by reference into the Preliminary Prospectus,
are independent public accountants with respect to Western
Gulf Holdings, L.L.C. within the meaning of the Act and the
applicable published rules and regulations thereunder;
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 Preliminary 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; and
KPMG LLP, who have certified certain financial statements of
First Reserve Gas Company and subsidiaries, Petal Gas
Storage Company, and Crystal Properties & Trading Company
and delivered their report with respect to the audited
combined financial statements and schedules included in or
incorporated by reference into the Preliminary Prospectus,
are independent public accountants with respect to First
Reserve Gas Company and subsidiaries, Petal Gas Storage
Company, and Crystal Properties & Trading Company within the
meaning of the Act and the applicable published rules and
regulations thereunder.
(v) 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 Securities.
(w) 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 Preliminary Prospectus (exclusive of any supplement
thereto) 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
(exclusive of any supplement thereto).
(x) 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
Preliminary Prospectus (exclusive of any supplement
thereto).
(y) [Intentionally omitted]
(z) 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 (exclusive of any supplement thereto).
(aa) 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 certificate,
authorization or permit which, in the case of (i) and (ii)
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, or otherwise, would have a
material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Preliminary Prospectus (exclusive of any supplement
thereto).
(bb) Except as otherwise set forth in or contemplated
in the Preliminary Prospectus (exclusive of any supplement
thereto), such as are not material to the condition
(financial or otherwise), earnings, business or properties
of the Partnership and its Subsidiaries, 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.
(cc) 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, 1999,
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 February 21, 2000 (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 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 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.
(dd) Each of the Partnership and its Subsidiaries
maintains a system of internal accounting controls
sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted
only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to
any differences.
(ee) 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 Securities.
(ff) 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 Preliminary Prospectus
(exclusive of any supplement thereto). Except as set forth
in the Preliminary Prospectus (exclusive of any supplement
thereto), 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.
(gg) 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
(exclusive of any supplement thereto).
(hh) 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.
(ii) [Intentionally deleted.]
(jj) Each of the Partnership, its Subsidiaries and the
General Partner has such consents, easements, right-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, subject to such qualifications
as may be set forth in the Preliminary 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 Closing Date 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 Preliminary
Prospectus; and except as set forth in the Preliminary
Prospectus, none of such rights-of-way contains any
restriction that is materially burdensome to the Partnership
and its Subsidiaries considered as a whole.
(kk) Except as disclosed in the Registration Statement
and the Preliminary 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 Securities hereunder to repay
any outstanding debt owed to any affiliate of the
Representatives.
(ll) Since the respective dates as of which information
is given in the Preliminary Prospectus (exclusive of any
supplement thereto) and except as set forth in or
contemplated in the Preliminary Prospectus (exclusive of any
supplement thereto), as of the Execution Time, (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.
Any certificate signed by any officer of the General
Partner on behalf of the Partnership or by the General
Partner on its own behalf and delivered to the
Representatives or counsel for the Underwriters in
connection with the offering of the Securities shall be
deemed a representation and warranty by the Partnership or
the General Partner, as applicable, as to matters covered
thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and
conditions and in reliance upon the representations and
warranties herein set forth, the Partnership agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Partnership, at a purchase price of
$22.0225 per Common Unit, the amount of the Underwritten
Securities set forth opposite such Underwriter's name in Schedule
I hereto.
(b) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set
forth, the Partnership hereby grants an option to the
several Underwriters to purchase, severally and not jointly,
up to 600,000 Option Securities at the same purchase price
per Common Unit as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only
to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be
exercised in whole or in part at any time (but not more than
once) on or before the 30th day after the date of the
Prospectus upon written or telegraphic notice by the
Representatives to the Partnership setting forth the number
of the Option Securities as to which the several
Underwriters are exercising the option and the settlement
date. The number of Option Securities to be purchased by
each Underwriter shall be the same percentage of the total
number of Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you
in your absolute discretion shall make to eliminate any
fractional Common Units.
3. Delivery and Payment. Delivery of and payment for
the Underwritten Securities and the Option Securities (if the
option provided for in Section 2(b) hereof shall have been
exercised on or before the third Business Day prior to the
Closing Date) shall be made at 10:00 AM, New York City time, on
July 28, 2000, or at such time on such later date not more than
three Business Days after the foregoing date as the
Representatives shall designate, which date and time may be
postponed by agreement between the Representatives and the
Partnership or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein
called the "Closing Date"). Delivery of the Securities shall be
made to the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or
upon the order of the Partnership by wire transfer payable in
same-day funds to an account specified by the Partnership.
Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is
exercised after the third Business Day prior to the Closing Date,
the Partnership will deliver the Option Securities (at the
expense of the Partnership) to the Representatives through the
facilities of the Depository Trust Company on the date specified
by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the
several Underwriters, against payment by the several Underwriters
through the Representatives of the purchase price thereof to or
upon the order of the Partnership by wire transfer payable in
same-day funds to an account specified by the Partnership. If
settlement for the Option Securities occurs after the Closing
Date, the Partnership will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of
the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates
and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6
hereof.
4. Offering by Underwriters. It is understood that
the several Underwriters propose to offer the Securities for sale
to the public as set forth in the Prospectus.
5. Agreements. Each of the Partnership and the
General Partner agrees with the several Underwriters that:
(a) Each of the Partnership and the General Partner
will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the
termination of the offering of the Securities, the
Partnership will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement (other than (i) a Current Report on
Form 8-K containing only this Agreement and (ii) a
prospectus supplement containing Rule 430A Information)
unless the Partnership has furnished you a copy for your
review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object;
provided that your consent shall not be unreasonably
withheld or delayed. Subject to the foregoing sentence, if
the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Partnership will
cause the Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Partnership will
promptly advise the Representatives (1) when the
Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectus,
and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or
when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of
the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff
for any amendment of the Registration Statement or any
Rule 462(b) Registration Statement, or for any supplement to
the Prospectus, or for any additional information, (5) of
the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Partnership of any
notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the institution or threatening of any proceeding for such
purpose. Each of the Partnership and the General Partner
will use its best efforts to prevent the issuance of any
such stop order or the suspension of any such qualification
and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any
event occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein in the light of the
circumstances under which they were made not misleading, or
if it shall be necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the
Partnership promptly will (1) notify the Representatives of
such event, (2) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement that will correct such
statement or omission or effect such compliance and
(3) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Partnership will make
generally available to its security holders and to the
Representatives a consolidated earnings statement or
statements, which need not be audited, of the Partnership
and its Subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Partnership will furnish to the
Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably
request. The Partnership will pay the expenses of printing
or other production of all documents relating to the
offering.
(e) The Partnership and the General Partner will
arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as
the Representatives may designate, will maintain such
qualifications in effect so long as required for the
distribution of the Securities and will pay any fee of the
National Association of Securities Dealers, Inc., in
connection with its review of the offering; provided that in
no event shall the Partnership be obligated to qualify to do
business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to
service of process in suits, other than those arising out of
the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(f) Each of the Partnership, the General Partner,
EPEC, Sabine I and ▇▇▇▇▇▇ ▇▇ will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell,
contract to sell, pledge, or otherwise dispose of (or enter
into any transaction which is designed to, or might
reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the
Partnership, the General Partner, EPEC, 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, EPEC, Sabine I,
▇▇▇▇▇▇ ▇▇ or any of their respective affiliates, of),
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 Execution Time; 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 Execution Time and the Partnership may issue Common
Units issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time; and
provided, further, that the foregoing shall not prohibit (i)
the Partnership or EPEC from transferring their Common Units
to Sabine I or ▇▇▇▇▇▇ ▇▇, or (ii) 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.
(g) None of the Partnership, the General Partner or
any of their respective affiliates will take, directly or
indirectly, any action designed to or which constitutes 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 Securities.
6. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Underwritten
Securities and the Option Securities, as the case may be, shall
be subject to the accuracy of the representations and warranties
on the part of the Partnership and the General Partner contained
herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of
the statements of the Partnership and the General Partner made in
any certificates pursuant to the provisions hereof, to the
performance by each of the Partnership and the General of its
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the
Representatives agree in writing to a later time, the
Registration Statement will become effective not later than
(i) 6:00 PM New York City time on the date of determination
of the public offering price, if such determination occurred
at or prior to 3:00 PM New York City time on such date or
(ii) 9:30 AM on the Business Day following the day on which
the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on
such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the
manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) The Partnership shall have requested and caused
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel for the
Partnership and the General Partner, to have furnished to
the Representatives their opinion, dated the Closing Date
and addressed to the Representatives, 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
Viosca ▇▇▇▇▇ Gathering Company) 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
(other than Viosca ▇▇▇▇▇ Gathering Company) 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 Standing
Certificates"), is in good standing as a foreign
limited partnership, corporation or limited liability
company authorized to do business in the respective
jurisdictions listed on Annex B, which, to counsel's
knowledge, are the only jurisdictions (other than
offshore in the Gulf of Mexico) in which the businesses
of the Partnership and its Subsidiaries or their
respective ownership or leasing of property requires
such qualification, except where the failure to be so
qualified would not, individually or in the aggregate,
be likely in the reasonable judgment of such counsel 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;
(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 is in good standing
under the laws of each jurisdiction listed opposite its
name on Annex B, which, to the knowledge of such
counsel, are the only jurisdictions (other than
offshore in the Gulf of Mexico) in which the businesses
of the General Partner or its ownership or leasing of
property requires such qualification, other than any
jurisdiction where the failure to be so qualified 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, or would be reasonably
expected, in the reasonable judgment of such counsel,
to subject the limited partners of the Partnership to
any material liability or disability;
(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, at
or before the Closing Date, 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; 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 Texas naming the General Partner as
debtor is on file in the office of the Secretary of
State of the State of Texas;
(v) the General Partner, EPEC, 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"); other
than Permitted Encumbrances, the General Partner, EPEC,
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 Texas naming
the General Partner, EPEC, Sabine I or ▇▇▇▇▇▇ ▇▇ as
debtor is on file in the office of the Secretary of
State of the State of Texas;
(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 other than Permitted Encumbrances,
are owned by Holding Company free and clear of any
lien, adverse claim, security interest, equity or other
encumbrance of record in respect of which a financing
statement under the Uniform Commercial Code of the
State of Texas naming Holding Company as debtor is on
file in the office of the Secretary of State of the
State of Texas; Holding Company is an indirect, wholly-
owned subsidiary of El Paso Energy 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 (exclusive of any
supplement) are owned by the Partnership directly or
indirectly through one or more Subsidiaries or the
General Partner, other than Permitted Encumbrances,
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 Texas naming the Partnership or the
General Partner as debtor is on file in the office of
the Secretary of State of the State of 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 Securities
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 Securities 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 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) to the knowledge of such counsel: (a) 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 (i) 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
(ii) 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); (b)
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 (c) 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 accurate and fair
summaries of such legal matters, agreements, documents
or proceedings.
(x) 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;
(xi) this Agreement has been duly authorized,
executed and delivered by each of 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;
(xii) each of the Partnership and the General
Partner is not and, after giving effect to the offering
and sale of the Securities 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;
(xiii) 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 New York Stock
Exchange or under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the
Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus
and such other approvals as have been obtained;
(xiv) neither the issue and sale of the
Securities, 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 of or imposition of any lien,
charge or encumbrance upon any property or assets of
the Partnership or its Subsidiaries or the General
Partner pursuant to, (i) the partnership agreement,
limited liability company agreement, charter, by-laws
or similar organizational document of the Partnership
or any of its Subsidiaries or the General Partner, as
applicable, (ii) the terms of any Material Agreement,
or (iii) to such counsel's knowledge, any statute, law,
rule, regulation, judgment, order or decree applicable
to the Partnership or any of its Subsidiaries or the
General Partner of any court, regulatory body,
administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the
Partnership or any of its Subsidiaries or the General
Partner or any of its or their properties, except, in
the case of (ii) or (iii), where such conflict, breach,
violation or imposition would not, individually or in
the aggregate, be likely to have, in the reasonable
judgment of such counsel, a material adverse effect on
the condition (financial or otherwise), earnings,
business or properties of the Partnership and its
Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business;
and
(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 of (i) of the General
Partner and its affiliates and successors in Section
6.14 of the Partnership Agreement and (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; provided, however, that with respect
to (i) and (ii) above, (a) the General Partner, EPEC,
Sabine I and ▇▇▇▇▇▇ ▇▇ have agreed not to exercise
their rights with respect to such securities in
connection with the offering of Securities for 90 days
hereafter pursuant to letter agreements of even date
herewith, and (b) the Common Units held by the General
Partner, EPEC, Sabine I and ▇▇▇▇▇▇ ▇▇ are subject to
Permitted Encumbrances, the holders of which have not
waived such rights.
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, at the
Effective Date or Execution Time, 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 and as of the Closing Date,
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 Closing Date,
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 and the notes thereto and the
schedules and other financial data included in the
Registration Statement or the Prospectus).
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 and Texas law, (E) state that they express no
opinion with respect to state or local taxes or tax statutes
to which any of the Partnership, the limited partners of the
Partnership or the General Partner may be subject and (F)
state that their opinion is furnished as counsel for the
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 Closing Date.
(c) The Representatives shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date and addressed to
the Representatives, with respect to the issuance and sale
of the Securities, 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.
(d) The Partnership and the General Partner shall have
furnished to the Representatives a certificate of the
Partnership and the General Partner, as applicable, signed
by any officer holding a position of at least Senior Vice
President and the principal financial or accounting officer
of the General Partner, dated the Closing Date, to the
effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the
Partnership and the General Partner, as applicable, in
this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the
Closing Date (except (i) to the extent that a
representation or warranty is given as of a specific
date, in which case such representation or warranty
shall be given as of such date and (ii) to the extent
that a representation or warranty refers to the
Preliminary Prospectus, such representation or warranty
shall be deemed to refer to the Prospectus as of the
Closing Date) and each of the Partnership and the
General Partner, as applicable, has complied in all
material respects with all the agreements and satisfied
all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Partnership's or the General Partner's
knowledge, threatened; and
(iii) since the respective dates as of which
information is given in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the
date of this Agreement) and except as set forth in or
contemplated in the Registration Statement and the
Prospectus (exclusive of any supplement thereto): (i)
there has been no event which would have a material
adverse effect on the condition (financial or
otherwise), earnings, business or properties of the
Partnership and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the
ordinary course of business, (ii) there has been no
material adverse effect on the limited partner
interests or in the long-term debt of the Partnership
or any of its Subsidiaries or the General Partner and
(iii) none of the Partnership, any of its Subsidiaries
or the General Partner has incurred any material
liability or obligation, direct or contingent, which
would have a material adverse effect on the condition
(financial or otherwise), earnings, business or
properties of the Partnership or its Subsidiaries,
taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(e) The Company shall have requested and caused each
of PricewaterhouseCoopers LLP, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Deloitte
& Touche LLP and KPMG LLP to have furnished to the
Representatives, at the Execution Time and at the Closing
Date, letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable rules and
regulations adopted by the Commission thereunder with
respect to the Partnership, Partnership Subsidiary or
Partnership joint venture whose financial statements they
have respectively audited and containing the information and
statements of the type ordinarily included in accountants'
"comfort letters" to the Representatives with respect to the
financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(f) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto),
there shall not have been, other than as disclosed in or
contemplated by the Registration Statement or the
Prospectus, (i) (A) since March 31, 2000, any increase in
the short term or long term debt of the Partnership and its
Subsidiaries, any change in the capitalization of the
Partnership or any decrease in the partners' capital of the
Partnership as compared with the amounts shown on the March
31, 2000 consolidated balance sheet included or incorporated
by reference in the Registration Statement and the
Prospectus, or (B) for the period from April 1, 2000 to the
Execution Time, any decrease, as compared with the
corresponding period in the preceding year, in operating
revenues, operating income, adjusted EBITDA (as defined in
the Prospectus), or in total or per Common Unit amounts of
net income of the Partnership and its Subsidiaries, or (ii)
any change, or any development involving a prospective
change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the
Partnership 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) the effect
of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(g) Prior to the Closing Date, the Partnership and the
General Partner shall have furnished to the Representatives
such further information, certificates and documents as the
Representatives may reasonably request.
(h) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the
Partnership's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate
the direction of the possible change.
(i) At the Execution Time, the Partnership shall have
furnished to the Representatives a letter, in form and
substance satisfactory to the Representatives, from each of
the Partnership, the General Partner, EPEC, Sabine I and
▇▇▇▇▇▇ ▇▇ addressed to the Representatives, confirming the
agreements described in Section 5(f) hereof.
(j) The Partnership shall have requested and caused
Netherland & ▇▇▇▇▇▇ to have furnished to the
Representatives, at the Execution Time and at the Closing
Date, letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance
satisfactory to the Representatives.
(k) The Partnership shall have requested and caused in-
house counsel for the Partnership and the General Partner to
have furnished to the Representatives their opinion, dated
the Closing Date and addressed to the Representatives, to
the effect that neither the Partnership nor the General
Partner is or, after giving effect to the offering and sale
of the Securities and the application of the proceeds
thereof as described in the Prospectus, will 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.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior
to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Partnership in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this
Section 6 shall be delivered at the office of ▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, counsel for the Underwriters, at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the
sale of the Securities provided for herein is not consummated
(other than by reason of a default or breach by any of the
Underwriters or because of any termination pursuant to Section 10
hereof) because any condition to the obligations of the
Underwriters set forth in Section 6 hereof is not satisfied, or
because of any refusal, inability or failure on the part of the
Partnership to perform any agreement herein or comply with any
provision hereof, the Partnership will reimburse the Underwriters
severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. on demand for all out-
of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) Each of the
Partnership and the General Partner, jointly and severally,
agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and
each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or in any
Preliminary Prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that the Partnership and the General Partner
will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Partnership
by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein; and provided further, 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 Securities 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 Representatives,
(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.
This indemnity agreement will be in addition to any liability
which the Partnership or the General Partner may otherwise have.
(b) Each Underwriter severally and not jointly agrees
to indemnify and hold harmless each of the Partnership and
the General Partner, each of the directors of the General
Partner, each of the officers of the General Partner who
signs the Registration Statement, and each person who
controls the Partnership or the General Partner within the
meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Partnership and
the General Partner to each Underwriter, but only with
reference to written information relating to such
Underwriter furnished to the Partnership by or on behalf of
such Underwriter through the Representatives specifically
for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have.
Each of the Partnership and the General Partner acknowledges
that the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities and, under
the heading "Underwriting" or "Plan of Distribution,"
(i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the
sentences related to concessions and reallowances and
(iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary
Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any
action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of
the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability
under paragraph (a) or (b) above unless and to the extent it
did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for
which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory
to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or
additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party.
An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an
unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or
proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Partnership and the General Partner and the
Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to
which the Partnership, the General Partner and one or more
of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the
Partnership and the General Partner on the one hand and by
the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Partnership, the General
Partner and the Underwriters severally shall contribute in
such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the
Partnership and the General Partner on the one hand and of
the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations.
Benefits received by the Partnership and the General Partner
shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by it, and
benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the
Prospectus. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged
untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to
information provided by the Partnership and the General
Partner on the one hand or the Underwriters on the other,
the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent
such untrue statement or omission. The Partnership, the
General Partner and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent
of an Underwriter shall have the same rights to contribution
as such Underwriter, and each person who controls the
Partnership within the meaning of either the Act or the
Exchange Act, each officer of the General Partner who shall
have signed the Registration Statement and each director of
the General Partner shall have the same rights to
contribution as the Partnership and the General Partner,
subject in each case to the applicable terms and conditions
of this paragraph (d).
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the
Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Securities set forth
opposite their names in Schedule I hereto bears to the aggregate
amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the
Partnership or the General Partner. In the event of a default by
any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus
or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Partnership and the
General Partner and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by
notice given to the Partnership prior to delivery of and payment
for the Securities, if at any time prior to such time (i) trading
in the Partnership's Common Units shall have been suspended by
the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have
been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall
have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a
national emergency or war, or other calamity or crisis the effect
of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement and the Prospectus
(exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities
and other statements of the Partnership, the General Partner or
its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any
Underwriter or the Partnership or the General Partner or any of
the officers, directors, employees, agents or controlling persons
referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered or telefaxed to the
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel; or, if sent to the
Partnership or the General Partner, will be mailed, delivered or
telefaxed to El Paso Energy Partners, L.P., El Paso Energy
Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and
confirmed to it at El Paso Energy Partners, L.P., El Paso Energy
Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
attention of the Legal Department.
13. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers, directors, employees,
agents and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed
by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the
State of New York.
15. Counterparts. This Agreement may be signed in one
or more counterparts, each of which shall constitute an original
and all of which together shall constitute one and the same
agreement.
16. Headings. The section headings used herein are
for convenience only and shall not affect the construction
hereof.
17. Definitions. The terms which follow, when used in
this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
promulgated thereunder.
"Business Day" shall mean any day other than a
Saturday, a Sunday or a legal holiday or a day on which
banking institutions or trust companies are authorized or
obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange
Commission.
"Credit Agreement" shall mean the Fourth 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, as
Syndication Agent, BankBoston, N.A., as Documentation Agent,
and The Chase Manhattan Bank, as Administrative Agent, dated
as of March 23, 1995, as amended and restated through June
30, 2000, and the collateral documents related thereto.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Registration
Statement became or become effective.
"Enforceability Exceptions" shall mean (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.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Existing Commitments" shall mean 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 (i)
the Partnership Agreement, (ii) the letter of intent dated
July 11, 2000, between Crystal Gas Storage, Inc. and the
Partnership and (iii) 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.
"Material Agreements" shall mean the agreements,
contracts and other similar documents filed as exhibits to
the Registration Statement or the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1999.
"Permitted Encumbrances" shall mean any lien, adverse
claim, security interest or other interest created in
connection with or permitted under (i) the Credit Agreement,
(ii) the credit agreement to which Deepwater Holdings,
L.L.C., a Delaware limited liability company in which a
Subsidiary of the Partnership owns a 50% membership
interest, is party, and the collateral documents related
thereto, (iii) 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, (iv) the financing arrangements to which
Sabine I and ▇▇▇▇▇▇ ▇▇ are parties, and (v) the indenture
into which the Partnership entered on May 27, 1999, as
amended and supplemented.
"Preliminary Prospectus" shall mean any preliminary
prospectus supplement to the base prospectus included in the
Registration Statement at the Effective Date, together with
such base prospectus, that describes the Securities and the
offering thereof, is filed pursuant to Rule 424(b) and is
used prior to the filing of the Prospectus.
"Prospectus" shall mean the prospectus supplement to
the base prospectus included in the Registration Statement
at the Effective Date, together with such base prospectus,
that describes the Securities and the offering thereof, and
that is first filed pursuant to Rule 424(b) after the
Execution Time.
"Registration Statement" shall mean the registration
statement referred to in paragraph 1(a) above, including
exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time,
in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior
to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such
rules under the Act.
"Rule 430A Information" shall mean information with
respect to the Securities and the offering thereof permitted
to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed
pursuant to Rule 462(b) relating to the offering covered by
the registration statement referred to in Section 1(a)
hereof.
"Subsidiary" of any person or entity means any
corporation, limited liability company, partnership, 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.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the
Partnership, the General Partner and the several Underwriters.
Very truly yours,
EL PASO ENERGY PARTNERS, L.P.
By: D. ▇▇▇▇ ▇▇▇▇▇▇
______________________
Name: D. ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President and
Controller
EL PASO ENERGY PARTNERS COMPANY
By: D. ▇▇▇▇ ▇▇▇▇▇▇
________________________
Name: D. ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President and
Controller
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
Annex A
Subsidiaries
Argo, L.L.C.
Argo I, L.L.C.
Argo II, L.L.C.
Delos Offshore Company, L.L.C.
▇▇▇▇▇ Bank Gathering Company, L.L.C.
Flextrend Development Company, L.L.C.
Green Canyon Pipe Line Company, L.P.
El Paso Energy Partners Deepwater, L.L.C.
El Paso Energy Partners Finance Corporation
El Paso Energy Partners Oil Transport Systems, L.L.C.
El Paso Partners Acquisition, L.L.C.
El Paso Partners Operating Company, L.L.C.
Manta Ray Gathering Company, L.L.C.
Moray Pipeline Company, L.L.C.
Poseidon Pipeline Company, L.L.C.
Sailfish Pipeline Company, L.L.C.
Tarpon Transmission Company
VK Deepwater Gathering Company, L.L.C.
Viosca ▇▇▇▇▇ Gathering Company, L.L.C.
VK-Main Pass Gathering Company, L.L.C.
Annex B
Entity Name Jurisdiction Other Jurisdictions in which
of entity is qualified to do
Formation business
El Paso Energy Partners, L.P. Delaware Texas, Louisiana
El Paso Energy Partners Company Delaware Texas, Louisiana
Argo, L.L.C. Delaware
Argo I, L.L.C. Delaware
Argo II, L.L.C. Delaware
Delos Offshore Company, L.L.C. Delaware Texas, Louisiana
El Paso Energy Partners Delaware Texas, Louisiana
Deepwater, L.L.C.
El Paso Energy Finance Delaware Texas
Corporation
El Paso Energy Partners Delaware Texas, Louisiana
Operating Company, L.L.C.
El Paso Energy Partners Oil Delaware Texas, Louisiana
Transport, L.L.C.
El Paso Partners Acquisition, Delaware
L.L.C.
El Paso Partners Operating Delaware Texas, Louisiana
Company, L.L.C.
▇▇▇▇▇ Bank Gathering Company, Delaware Texas, Louisiana
L.L.C.
Flextrend Development Company, Delaware Texas, Louisiana, Alabama
L.L.C.
Green Canyon Pipe Line Delaware Texas, Louisiana, Alabama
Company, L.P.
Manta Ray Gathering Company, Delaware Texas, Louisiana
L.L.C.
Moray Pipeline Company, L.L.C. Delaware Texas
Poseidon Pipeline Company, Delaware Texas
L.L.C.
Sailfish Pipeline Company, Delaware Texas
L.L.C.
Tarpon Transmission Company Texas Louisiana
Viosca ▇▇▇▇▇ Gathering Company Delaware Texas, Louisiana
VK-Main Pass Gathering Delaware Texas, Louisiana, Alabama
Company, L.L.C.
VK Deepwater Gathering Delaware Texas
Company, L.L.C.
SCHEDULE I
Number of Underwritten
Underwriters Securities to be
Purchased
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. . . . . . . . . . . . . . . . . . . . 1,000,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.. . . . . . . . . . . . . . . . . . . . . . 1,000,000
PaineWebber Incorporated. . . . . . . . . . . . . . . . . . . . 1,000,000
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation. . . . . . . . . . . . . . . . . . . . 1,000,000
________
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000