▇▇▇▇▇▇ MIDSTREAM PARTNERS L.P.
1,150,000 COMMON UNITS*
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
St. Petersburg, Florida
January 29, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇. ▇. ▇▇▇▇▇▇▇ & Sons, Inc.
McDonald Investments Inc.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Midstream Partners L.P., a Delaware limited partnership (the
"Partnership"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), an aggregate of 1,150,000 common units, each representing a
limited partner interest in the Partnership (the "Common Units"). The aggregate
of 1,150,000 Common Units to be purchased from the Partnership are called the
"Firm Units." In addition, the Partnership has agreed to sell to the
Underwriters, upon the terms and conditions stated herein, up to an additional
172,500 Common Units (the "Additional Units") to cover over-allotments by the
Underwriters, if any. The Firm Units and the Additional Units are collectively
referred to in this Agreement as the "Units." ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.,
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., McDonald Investments Inc., and RBC
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* Plus an additional 172,500 units subject to the Underwriters' over-allotment
option.
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▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. are acting as the representatives of the several Underwriters
and in such capacity are referred to in this Agreement as the "Representatives."
▇▇▇▇▇▇ Midstream GP LLC, a Delaware limited liability company (the
"General Partner"), is an indirect, wholly owned subsidiary of ▇▇▇▇▇▇ Resource
Management Corporation, a Texas corporation ("MRMC"), and the sole general
partner of the Partnership. ▇▇▇▇▇▇ Operating GP LLC, a Delaware limited
liability company and a wholly owned subsidiary of the Partnership ("Operating
GP"), is the sole general partner of ▇▇▇▇▇▇ Operating Partnership L.P., a
Delaware limited partnership (the "Operating Partnership"), and the Partnership
is the sole limited partner of the Operating Partnership. The Operating
Partnership owns, among other things, an unconsolidated, non-controlling 49.5%
limited partner interest in ▇▇ ▇▇▇▇▇▇ Sulphur, L.P., a Delaware limited
partnership ("CFMSLP").
The General Partner, the Partnership, Operating GP and the Operating
Partnership collectively constitute the "Partnership Entities." The Partnership
Entities, MRMC and ▇▇▇▇▇▇ Resource LLC, a Delaware limited liability company
("▇▇▇▇▇▇ LLC" and collectively with MRMC, the "▇▇▇▇▇▇ Parties") wish to confirm
as follows their agreement with you and the other several Underwriters, on whose
behalf you are acting, in connection with the several purchases of the Units
from the Partnership.
For the purposes of this Agreement, the term "Permitted Liens" shall
mean liens, encumbrances and/or security interests (i) granted by MRMC to JP
MorganChase and the other lenders (collectively the "MRMC Lenders"), named in
MRMC's Third Amended and Restated Credit Agreement dated December 23, 2003, (the
"MRMC Credit Agreement") and (ii) granted by any Partnership Entity Royal Bank
of Canada and the other lenders (collectively, the "MLP Lenders"), named in the
Operating Partnership's Credit Agreement, as amended by that First Amendment to
Credit Agreement effective December 23, 2003 (the "MLP Credit Agreement").
1. Registration Statement and Prospectus. The Partnership has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933 and the rules and
regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form S-1 (File No. 333-111450), including a prospectus
subject to completion, relating to the Units. Such registration statement, as
amended, including the financial statements, exhibits and appendices thereto, at
the time when it becomes effective and as thereafter amended by any
post-effective amendment, is referred to in this Agreement as the "Registration
Statement." The prospectus in the form included in the Registration Statement
or, if the prospectus included in the Registration Statement omits certain
information in reliance upon Rule 430A under the Act and such information is
thereafter included in a prospectus filed with the Commission pursuant to Rule
424(b) under the Act or as part of a post-effective amendment to the
Registration Statement after the Registration Statement becomes effective, the
prospectus as so filed, is referred to in this Agreement as the "Prospectus." If
the Partnership elects, with the consent of the Representatives, to rely on Rule
434 under the Act, all references to the Prospectus shall be deemed to include
the form of prospectus and the term sheet contemplated by Rule 434, taken
together, provided to the Underwriters by the Partnership in reliance on Rule
434 under the Act (the "Rule 434 Prospectus"). If the Partnership files another
registration statement with the Commission to register a portion of the Units
pursuant to Rule 462(b) under the Act (the "Rule 462 Registration
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Statement"), then any reference to "Registration Statement" herein shall be
deemed to include the registration statement on Form S-1 (File No. 333-111450)
and the Rule 462 Registration Statement, as each such registration statement may
be amended pursuant to the Act. The prospectus subject to completion, in the
form included in the Registration Statement at the time of the initial filing of
such Registration Statement with the Commission, and as such prospectus is
amended from time to time until the date of the Prospectus, is referred to in
this Agreement as the "Preliminary Prospectus." All references in this Agreement
to the Registration Statement, the Rule 462 Registration Statement, the Rule 434
Prospectus, a Preliminary Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("▇▇▇▇▇").
2. Agreements to Sell and Purchase. The Partnership hereby agrees to
issue and sell the Firm Units to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Partnership Entities and the
▇▇▇▇▇▇ Parties herein contained and subject to all the terms and conditions set
forth herein, each Underwriter agrees, severally and not jointly, to purchase
from the Partnership at a purchase price of $26.47315 per Unit (the "purchase
price per Unit"), the number of Firm Units set forth opposite the name of such
Underwriter in Schedule I hereto.
The Partnership hereby also agrees to issue and sell to the
Underwriters, and, upon the basis of the representations, warranties and
agreements of the Partnership Entities and the ▇▇▇▇▇▇ Parties herein contained
and subject to all the terms and conditions set forth herein, the Underwriters
shall have the right for 30 days from the date of the Prospectus to purchase
from the Partnership, up to 172,500 Additional Units at the same purchase price
per Unit as paid for the Firm Units. The Additional Units may be purchased
solely for the purpose of covering over-allotments, if any, made in connection
with the offering of the Firm Units. If any Additional Units are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase the
number of Additional Units (subject to such adjustments as you may determine to
avoid fractional shares) that bears the same proportion to the total number of
Additional Units to be purchased by the Underwriters as the number of Units set
forth opposite the name of such Underwriter in Schedule I hereto bears to the
total number of Units. The option to purchase Additional Units may be exercised
at any time within 30 days after the date of the Prospectus, but no more than
once.
3. Terms of Public Offering. The Partnership has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Units as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Units upon the terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the date
the Units are released by the Underwriters for sale to the public, the
Partnership shall deliver or cause to be delivered copies of the Prospectus in
such quantities and at such places as the Representatives shall request.
4. Delivery of the Units and Payment Therefor. Delivery to the
Underwriters of the Firm Units and payment therefor (the "Closing") shall be
made at the offices of ▇▇▇▇▇ ▇▇▇▇▇
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L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, at 8:30 a.m., Dallas, Texas time, on
February 3, 2004, or such other place, time and date not later than 1:30 p.m.,
Dallas, Texas time, on February 3, 2004, as the Representatives shall designate
by notice to the Partnership (the time and date of such closing are called the
"Closing Date"). The place of the Closing and the Closing Date may be varied by
agreement between you and the Partnership. The Partnership hereby acknowledges
that circumstances under which the Representatives may provide notice to
postpone the Closing Date as originally scheduled include any determination by
the Partnership or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 11 hereof.
Delivery to the Underwriters of and payment for any Additional Units to
be purchased by the Underwriters (the "Additional Closing") shall be made at the
offices of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, at 8:30 a.m.,
Dallas, Texas time, on such date or dates (the "Additional Closing Date") (which
may be the same as the Closing Date, but shall in no event be earlier than the
Closing Date nor earlier than three nor later than ten business days after the
giving of the notice hereinafter referred to; the Closing Date and the
Additional Closing Date are sometimes each referred to herein as a "Closing
Date") as shall be specified in a written notice, from the Representatives on
behalf of the Underwriters to the Partnership, of the Underwriters'
determination to purchase a number, specified in such notice, of Additional
Units. Such notice may be given at any time within 30 days after the date of the
Prospectus and must set forth (i) the aggregate number of Additional Units as to
which the Underwriters are exercising the option and (ii) the names and
denominations in which the certificates for which the Additional Units are to be
registered. The place of the Additional Closing and the Additional Closing Date
may be varied by agreement between you and the Partnership.
Certificates for the Firm Units and the Additional Units, if any, to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m., Dallas, Texas time, not later than the
second full business day preceding the Closing Date or the Additional Closing
Date, as the case may be. Such certificates shall be made available to you in
Dallas, Texas for inspection and packaging not later than 9:30 a.m., Dallas,
Texas time, on the business day immediately preceding the Closing Date or the
Additional Closing Date, as the case may be. The certificates evidencing the
Firm Units and the Additional Units, if any, to be purchased hereunder shall be
delivered to you on the Closing Date or the Additional Closing Date, as the case
may be, against payment of the purchase price therefore by wire transfer of
immediately available funds to an account specified in writing, not later than
the close of business on the business day next preceding the Closing Date or the
Additional Closing Date, as the case may be, by the Partnership. Payment for the
Units sold by the Partnership hereunder shall be delivered by the
Representatives to the Partnership.
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price per Unit for
the Firm Units and the Additional Units, if any, that the Underwriters have
agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Associates, Inc., individually and not as
a Representative of the Underwriters, may, but shall not be obligated to, make
payment for any Units to be purchased by any Underwriter whose funds shall not
have been received by the Representatives by the Closing Date or the Additional
Closing Date, as the case may be, for the
4
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
5. Covenants and Agreements of the Partnership Entities and the ▇▇▇▇▇▇
Parties. Each of the Partnership Entities and the ▇▇▇▇▇▇ Parties, jointly and
severally, covenants and agrees with the several Underwriters as follows:
(a) Preparation of Registration Statement and Prospectus. The
Partnership will use its best efforts to cause the Registration Statement and
any amendments thereto to become effective, if it has not already become
effective, and will advise you promptly and, if requested by you, will confirm
such advice in writing (i) when the Registration Statement has become effective
and the time and date of any filing of any post-effective Registration Statement
or any amendment or supplement to any Preliminary Prospectus or the Prospectus
and the time and date that any post-effective amendment to the Registration
Statement becomes effective, (ii) if Rule 430A under the Act is employed, when
the Prospectus has been timely filed pursuant to Rule 424(b) under the Act,
(iii) of the receipt of any comments of the Commission, or any request by the
Commission for amendments or supplements to the Registration Statement, any
Preliminary Prospectus or the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Units
for offering or sale in any jurisdiction or the initiation of any proceeding for
such purposes and (v) within the period of time referred to in Section 5(e)
below, of any event that comes to the attention of any of the ▇▇▇▇▇▇ Parties or
Partnership Entities that makes any statement made in the Registration Statement
or the Prospectus (as then amended or supplemented) untrue in any material
respect or that requires the making of any additions thereto or changes therein
in order to make the statements therein (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Partnership will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible time. If
the Partnership elects, with the consent of the Representatives, to rely on Rule
434 under the Act, the Partnership will provide the Underwriters with copies of
the form of Rule 434 Prospectus (including copies of a term sheet that complies
with the requirements of Rule 434 under the Act), in such number as the
Underwriters may reasonably request, and file with the Commission in accordance
with Rule 424(b) of the Act the form of Prospectus complying with Rule 434(b)(2)
of the Act before the close of business on the first business day immediately
following the date hereof. If the Partnership elects not to rely on Rule 434
under the Act, the Partnership will provide the Underwriters with copies of the
form of Prospectus, in such number as the Underwriters may reasonably request,
and file with the Commission such Prospectus in accordance with Rule 424(b) of
the Act before the close of business on the first business day immediately
following the date hereof.
(b) Signed Copies of Registration Statements. The Partnership
will furnish to you, without charge, two signed duplicate originals of the
Registration Statement as originally filed with the Commission and of each
amendment thereto, including financial statements and all exhibits thereto, and
will also furnish to you, without charge, such number of conformed copies
5
of the Registration Statement as originally filed and of each amendment thereto
as you may reasonably request.
(c) Amendments to Registration Statement. The Partnership will
not file any Rule 462 Registration Statement or any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus
unless (i) you shall have previously been advised thereof and been given a
reasonable opportunity to review such filing, amendment or supplement and (ii)
you have not reasonably objected to such filing, amendment or supplement after
being so advised and having been given a reasonable opportunity to review such
filing, amendment or supplement.
(d) Copies of the Preliminary Prospectus. Prior to the
execution and delivery of this Agreement, the Partnership has delivered or will
deliver to you, without charge, in such quantities as you have requested or may
hereafter reasonably request, copies of each form of the Preliminary Prospectus.
Consistent with the provisions of Section 5(e) hereof, the Partnership consents
to the use, in accordance with the provisions of the Act and with the securities
or Blue Sky laws of the jurisdictions in which the Units are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Preliminary Prospectus so furnished by the Partnership.
(e) Copies of the Prospectus. As soon after the execution and
delivery of this Agreement as is practicable and thereafter from time to time
for such period as in the reasonable opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with sales by
any Underwriter or a dealer (the "Prospectus Delivery Period"), the Partnership
will deliver to each Underwriter and each dealer, without charge, as many copies
of the Prospectus (and of any amendment or supplement thereto) as such
Underwriter or dealer may reasonably request. The Partnership consents to the
use of the Prospectus (and of any amendment or supplement thereto) in accordance
with the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Units are offered by the several Underwriters and by
all dealers to whom Units may be sold, both in connection with the offering and
sale of the Units and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by any Underwriter
or dealer. If at any time prior to the later of (i) the completion of the
distribution of the Units pursuant to the offering contemplated by the
Registration Statement or (ii) the expiration of prospectus delivery
requirements with respect to the Units under Section 4(3) of the Act and Rule
174 thereunder, any event shall occur that in the judgment of the Partnership or
in the opinion of counsel for the Underwriters is required to be set forth in
the Prospectus (as then amended or supplemented) or should be set forth therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Prospectus to comply with the Act or any other law, the Partnership
will forthwith prepare and, subject to Sections 5(a) and 5(c) hereof, file with
the Commission and use their best efforts to cause to become effective as
promptly as possible an appropriate supplement or amendment thereto, and will
furnish to each Underwriter who has previously requested Prospectuses, without
charge, a reasonable number of copies thereof.
(f) Blue Sky Qualification. The Partnership will cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Units for
6
offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Units; provided that in no event shall any Partnership Entity 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 general service of process in suits,
other than those arising out of the offering or sale of the Units, as
contemplated by this Agreement and the Prospectus, in any jurisdiction where it
is not now so subject. In the event that the qualification of the Units in any
jurisdiction is suspended, the Partnership shall so advise you promptly in
writing. The Partnership will comply with such Blue Sky laws and will continue
such qualifications, registrations and exemptions in effect for so long as
required to complete the distribution of the Units.
(g) Reports to Security Holders. The Partnership will make
generally available to security holders of the Partnership a consolidated
earnings statement of the Partnership (in form complying with the provisions of
Rule 158), which need not be audited, covering a twelve-month period commencing
after the effective date of the Registration Statement and the Rule 462
Registration Statement, if any, and ending not later than 15 months thereafter,
as soon as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(h) Application of Proceeds. The Partnership will apply the
net proceeds from the sale of the Units to be sold by it hereunder in accordance
in all material respects with the statements under the caption "Use of Proceeds"
in the Prospectus.
(i) Rule 430A. If Rule 430A under the Act is employed, the
General Partner will cause the Partnership to timely file the Prospectus or term
sheet (as described in Rule 434(b) under the Act) pursuant to Rule 424(b) under
the Act.
(j) Lock-up Period. For a period of 120 days after the date of
the Prospectus first filed pursuant to Rule 424(b) under the Act, none of the
Partnership Entities or the ▇▇▇▇▇▇ Parties will, directly or indirectly, (i)
issue, sell, offer or contract to sell or otherwise dispose of or transfer any
Common Units or securities convertible into or exchangeable or exercisable for
Common Units (collectively, "Partnership Units") or any rights to purchase
Partnership Units, or file any registration statement under the Act with respect
to any of the foregoing, or (ii) enter into any swap or other agreement that
transfers, in whole or in part, directly or indirectly, the economic
consequences of ownership of Partnership Units whether any such swap or
transaction is to be settled by delivery of Common Units or other securities, in
cash or otherwise, in each case without the prior written consent of the
Representatives on behalf of the Underwriters; provided, however, that the
foregoing restrictions do not apply to (A) the sale of Common Units to the
Underwriters pursuant to this Agreement, (B) the issuance of Common Units by the
Partnership pursuant to the ▇▇▇▇▇▇ Midstream Partners, L.P. Long-Term Incentive
Plan and (C) the issuance of Common Units in connection with accretive
acquisitions made by the Partnership provided that the recipients of such Common
Units agree to be bound by the restrictions in this paragraph (k).
7
(k) Copies of Financial Statements. Prior to the Closing Date
or the Additional Closing Date, as the case may be, the Partnership will furnish
to you, as promptly as possible, copies of any unaudited interim consolidated
financial statements of the Partnership and its subsidiaries for any period
subsequent to the periods covered by the financial statements appearing in the
Prospectus.
(l) Undertakings. The General Partner will cause the
Partnership to comply with all provisions of any undertakings contained in the
Registration Statement.
(m) Stabilization or Manipulation. None of the ▇▇▇▇▇▇ Parties
or the Partnership Entities will, at any time, directly or indirectly, take any
action designed, or which might reasonably be expected to cause or result in, or
which will constitute, stabilization or manipulation of the price of Common
Units to facilitate the sale or resale of any of the Units.
(n) NASDAQ Requirements. The Partnership will timely file with
NASDAQ all documents and notices required by NASDAQ of companies that have or
will issue securities that are quoted on NASDAQ. The Partnership will use its
best efforts to complete the inclusion of the Units on NASDAQ, subject only to
official notice of issuance, prior to the Closing Date.
(o) Transfer Agent and Registrar. The Partnership will
continue to maintain, at its expense, a transfer agent and, if necessary under
the jurisdiction of its formation or the rules of any national securities
exchange or automated quotation system on which the Common Units are listed, a
registrar (which, if permitted by applicable laws and rules may be the same
entity as the transfer agent) for the Units.
(p) NASD Requirements. The Partnership will cause each annual
report distributed to the security holders of the Partnership to comply with
NASD Rule 2810(b)(5).
6. Representations and Warranties of the ▇▇▇▇▇▇ Parties. Each of the
Partnership Entities and the ▇▇▇▇▇▇ Parties, jointly and severally, hereby
represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. Each Preliminary Prospectus
included as part of the Registration Statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to Rule 424(a) under the
Act, complied as to form when so filed in all material respects with the
provisions of the Act, except that this representation and warranty does not
apply to statements in or omissions from such Preliminary Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Partnership in writing
by or on behalf of any Underwriter through you expressly for use therein. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus and no proceeding for that purpose has been instituted or
threatened by the Commission or the securities authority of any state or other
jurisdiction.
(b) No Material Misstatements or Omissions. The Partnership
has prepared each of the Registration Statement, any Rule 462 Registration
Statement and will prepare any post-effective amendment thereto, and the
Prospectus and any amendments or supplements thereto. The Registration Statement
(including any Rule 462 Registration Statement), in the
8
form in which it becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, and the Prospectus, and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, will comply as to form in all material respects with the
provisions of the Act and will not at any such times contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except that
this representation and warranty does not apply to statements in or omissions
from the Registration Statement or the Prospectus (or any amendment or
supplement thereto) made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Partnership in writing by or on
behalf of any Underwriter through you expressly for use therein. Commencing with
the Partnership's Annual Report on Form 10-K for the fiscal year ended December
31, 2002, the Partnership's filings with the Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations thereunder, and
none of such filings contained an untrue statement of material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading at such time.
(c) Conformity of ▇▇▇▇▇ Filings. To the best knowledge of the
Partnership, each Preliminary Prospectus and the Prospectus, if filed by
electronic transmission pursuant to ▇▇▇▇▇ (except as may be permitted by
Regulation S-T under the Act), was or will be identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Units.
(d) Formation and Qualification of the Partnership and the
Operating Partnership. Each of the Partnership and the Operating Partnership has
been duly formed and is validly existing in good standing as a limited
partnership under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware LP Act"), with full partnership power and authority to own or lease
and operate its properties and to conduct its business as presently conducted
and as described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), in each case in all material respects. Each of
the Partnership and the Operating Partnership is duly registered or qualified as
a foreign limited partnership for the transaction of business under the laws of
each jurisdiction in which the character of the business conducted by it at each
Closing Date or the nature or location of the properties to be owned or leased
by it at each Closing Date makes such registration or qualification necessary,
except where the failure so to register or qualify would not (i) have a material
adverse effect on the condition (financial or otherwise), business, properties,
net worth or results of operations of the Partnership Entities (a "Material
Adverse Effect") or (ii) subject the limited partners of the Partnership to any
material liability or disability.
(e) Formation and Qualification of ▇▇▇▇▇▇ LLC, the General
Partner and Operating GP. Each of ▇▇▇▇▇▇ LLC, the General Partner and Operating
GP has been duly formed and is validly existing in good standing as a limited
liability company under the Delaware Limited Liability Company Act (the
"Delaware LLC Act"), with full limited liability company power and authority to
own or lease and operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), and (i) with respect to the General
9
Partner, to act as general partner of the Partnership, and (ii) with respect to
Operating GP, to act as general partner of the Operating Partnership, in each
case in all material respects. Each of ▇▇▇▇▇▇ LLC, the General Partner and
Operating GP is duly registered or qualified as a foreign limited liability
company for the transaction of business under the laws of each jurisdiction in
which the character of the business conducted by it at each Closing Date or the
nature or location of the properties owned or leased by it at each Closing Date
makes such registration or qualification necessary, except where the failure so
to register or qualify would not (i) have a Material Adverse Effect or (ii)
subject the limited partners of the Partnership to any material liability or
disability.
(f) Formation and Qualification of CFMSLP. CFMSLP has been
duly formed and is validly existing in good standing as a limited partnership
under the Delaware LP Act with full partnership power and authority to own or
lease and operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement and the Prospectus (and
any amendment or supplement thereto), in each case in all material respects.
CFMSLP is duly registered or qualified as a foreign limited partnership for the
transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it at each Closing Date or the nature or
location of the properties owned or leased by it at each Closing Date makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a Material Adverse Effect or (ii) subject the
Operating Partnership, as a limited partner of CFMSLP, to any material liability
or disability.
(g) Ownership of General Partner Interest. The General Partner
is the sole general partner of the Partnership with a 2% general partner
interest in the Partnership; such general partner interest has been duly
authorized and validly issued in accordance with the First Amended and Restated
Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement"); and the General Partner owns such general partner interest free and
clear of all liens, encumbrances, security interests, charges or claims, except
for Permitted Liens, applicable securities laws and any restrictions set forth
in the Partnership Agreement.
(h) Ownership of the Sponsor Units and Incentive Distribution
Rights. ▇▇▇▇▇▇ Product Sales LLC, a Texas limited liability company ("MPS"),
owns 1,543,797 subordinated units representing limited partner interests in the
Partnership (the "Subordinated Units"), Midstream Fuel Service LLC, an Alabama
limited liability company ("Midstream"), owns 620,644 Subordinated Units and
▇▇▇▇▇▇ LLC owns 2,088,921 Subordinated Units (all such Subordinated Units being
collectively referred to herein as the "Sponsor Units"); all of such Sponsor
Units and the limited partner interests represented thereby have been duly
authorized and validly issued in accordance with the Partnership Agreement, are
fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Section 17-303
or Section 17-607 of the Delaware LP Act and as otherwise described in the
Prospectus under the caption "The Partnership Agreement--Limited Liability");
the General Partner owns all of the Incentive Distribution Rights (as such
rights are defined in the Partnership Agreement (the "Incentive Distribution
Rights")), and such Incentive Distribution Rights have been duly authorized and
validly issued in accordance with the Partnership Agreement, are fully paid (to
the extent required under the Partnership Agreement) and nonassessable (except
as such nonassessability may be affected by Section 17-303 or Section 17-607 of
the Delaware LP Act and as otherwise described in the Prospectus under the
caption
10
"The Partnership Agreement--Limited Liability"); and the Sponsor Units and the
Incentive Distribution Rights are owned free and clear of all liens,
encumbrances, security interests, charges or claims, except for Permitted Liens,
applicable securities laws, any restrictions set forth in the Partnership
Agreement and, with respect to the Incentive Distribution Rights, any
restrictions on transferability set forth in the governing documents of the
other Partnership Entities.
(i) Valid Issuance of Units. On the Closing Date and the
Additional Closing Date, as the case may be, the Firm Units and the Additional
Units, as the case may be, and the limited partner interests represented
thereby, will be duly authorized by the Partnership Agreement and, when issued
and delivered to the Underwriters against payment therefore in accordance with
the terms hereof, will be validly issued, fully paid (to the extent required
under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-303 or Section 17-607 of the
Delaware LP Act and as otherwise described in the Prospectus under the caption
"The Partnership Agreement--Limited Liability").
(j) Ownership of ▇▇▇▇▇▇ LLC. MRMC owns a 100% member interest
in ▇▇▇▇▇▇ LLC; such member interest has been duly authorized and validly issued
in accordance with the limited liability company agreement of ▇▇▇▇▇▇ LLC (as the
same may be amended and restated at or prior to each Closing Date, the "▇▇▇▇▇▇
LLC Agreement"), is fully paid (to the extent required under the ▇▇▇▇▇▇ LLC
Agreement) and nonassessable (except as such nonassessability may be affected by
Section 18-607 of the Delaware LLC Act); and MRMC owns such member interest free
and clear of all liens, encumbrances, security interests, charges or claims,
except for Permitted Liens and applicable securities laws and any restrictions
set forth in the ▇▇▇▇▇▇ LLC Agreement.
(k) Ownership of Operating GP. The Partnership owns a 100%
member interest in Operating GP; such member interest has been duly authorized
and validly issued in accordance with the limited liability company agreement of
Operating GP (as the same may be amended and restated at or prior to each
Closing Date, the "Operating GP Agreement"), is fully paid (to the extent
required under the Operating GP Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and
the Partnership owns such member interest free and clear of all liens,
encumbrances, security interests, charges or claims, except for Permitted Liens,
applicable securities laws and any restrictions set forth in the Operating GP
Agreement.
(l) Ownership of the Operating Partnership. Operating GP is
the sole general partner of the Operating Partnership with a 0.1% general
partner interest in the Operating Partnership; such general partner interest has
been duly authorized and validly issued in accordance with the partnership
agreement of the Operating Partnership (as the same may be amended and restated
at or prior to each Closing Date, the "Operating Partnership Agreement"), is
fully paid (to the extent required under the Operating Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by Section
17-607 of the Delaware LP Act); Operating GP owns such general partner interest
free and clear of all liens, encumbrances (except any restrictions on
transferability as described in the Prospectus), security interests, charges or
claims, except for Permitted Liens, applicable securities laws and any
restrictions set forth in the Operating Partnership Agreement; the Partnership
is the sole limited
11
partner of the Operating Partnership with a 99.9% limited partner interest in
the Operating Partnership; such limited partner interest has been duly
authorized and validly issued in accordance with the Operating Partnership
Agreement, is fully paid (to the extent required under the Operating Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
Sections 17-303 and 17-607 of the Delaware LP Act); and the Partnership owns
such limited partner interest free and clear of all liens, encumbrances,
security interests, charges or claims, except for Permitted Liens, applicable
securities laws and any restrictions set forth in the Operating Partnership
Agreement.
(m) Ownership of General Partner. ▇▇▇▇▇▇ LLC owns a 100%
member interest in the General Partner; such member interest has been duly
authorized and validly issued in accordance with the limited liability company
agreement of the General Partner (as the same may be amended and restated at or
prior to each Closing Date, the "General Partner LLC Agreement"), is fully paid
(to the extent required under the General Partner LLC Agreement) and
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act); and ▇▇▇▇▇▇ LLC owns such member interest free and
clear of all liens, encumbrances, security interests, charges or claims, except
for Permitted Liens, applicable securities laws and any restrictions in the
General Partner LLC Agreement.
(n) Ownership of Limited Partner Interest in CFMSLP. The
Operating Partnership owns a 49.5% limited partner interest in CFMSLP; such
limited partner interest has been duly authorized and validly issued in
accordance with the partnership agreement, as amended, of CFMSLP (the "CFMSLP
Partnership Agreement"), is fully paid (to the extent required under the
partnership agreement, as amended, of CFMSLP) and nonassessable (except as such
nonassessability may be affected by Sections 17-303 and 17-607 of the Delaware
LP Act); and the Operating Partnership owns such limited partner interest free
and clear of all liens, encumbrances, security interests, charges or claims,
other than transfer restrictions and buy/sell obligations contained in the
organizational documents of CFMSLP or its general partner, applicable securities
laws and any restrictions set forth in the governing documents of the
Partnership Entities.
(o) No Other Subsidiaries. Other than (i) the Partnership's
ownership of a 100% member interest in Operating GP and a 99.9% limited partner
interest in the Operating Partnership, (ii) Operating GP's ownership of a 0.1%
general partner interest in the Operating Partnership and (iii) the Operating
Partnership's ownership of a 49.5% limited partner interest in CFMSLP, none of
the Partnership, Operating GP, or the Operating Partnership will own, directly
or indirectly, any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association or other
entity. Other than its ownership of its partnership interests in the
Partnership, the General Partner will not own, directly or indirectly, any
equity or long-term debt securities of any corporation, partnership, limited
liability company, joint venture, association or other entity.
(p) No Preemptive Rights, Registration Rights or Options.
Except for rights described in the Prospectus, or for rights that have been
waived, there are no preemptive rights or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any partnership or
member interests in the Partnership Entities, in each case pursuant to the
organizational documents or any agreement or other instrument to which any
Partnership Entity
12
is a party or by which any of them may be bound. Neither the filing of the
Registration Statement nor the offering or sale of the Units as contemplated by
this Agreement gives rise to any rights for or relating to the registration of
any Units or other securities of any Partnership Entity, except for such rights
as have been waived. Except as described in the Prospectus, there are not
outstanding options or warrants to purchase any partnership or member interests
in any Partnership Entity.
(q) Authority. The Partnership has all necessary limited
partnership power and authority to issue, sell and deliver the Units, in
accordance with and upon the terms and conditions set forth in this Agreement,
the Partnership Agreement, the Registration Statement and the Prospectus. All
corporate, partnership and limited liability company action, as the case may be,
required to be taken by the Partnership Entities and the ▇▇▇▇▇▇ Parties or any
of their stockholders, partners or members for the authorization, issuance, sale
and delivery of the Units and the consummation of the transactions contemplated
by this Agreement has been, or prior to the Closing will be, validly taken.
(r) Enforceability of Agreement. This Agreement has been duly
authorized and validly executed and delivered by each of the Partnership
Entities and the ▇▇▇▇▇▇ Parties and constitutes the valid and legally binding
agreement of each of them, enforceable against each of them in accordance with
its terms; provided that the enforceability hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing; and provided further, that the indemnity and contribution provisions
hereunder may be limited by federal or state securities laws.
(s) Conformity to Description of the Units. The Units, when
issued and delivered against payment therefor as provided herein, will conform
in all material respects to the description thereof contained in the Prospectus.
(t) Enforceability of Other Agreements. The General Partner
LLC Agreement has been duly authorized, executed and delivered by ▇▇▇▇▇▇ LLC and
is a valid and legally binding agreement of ▇▇▇▇▇▇ LLC enforceable against
▇▇▇▇▇▇ LLC in accordance with its terms; the Partnership Agreement has been duly
authorized, executed and delivered by the General Partner and is a valid and
legally binding agreement of the General Partner, enforceable against the
General Partner in accordance with its terms; the Operating GP Agreement has
been duly authorized, executed and delivered by the Partnership and is a valid
and legally binding agreement of the Partnership, enforceable against the
Partnership in accordance with its terms; and the Operating Partnership
Agreement has been duly authorized, executed and delivered by Operating GP and
the Partnership and is a valid and legally binding agreement of Operating GP and
the Partnership, enforceable against Operating GP and the Partnership in
accordance with its terms; provided that, with respect to each agreement
described in this Section 6(t), the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and provided further, that the indemnity and
contribution provisions contained in any of such agreements may be limited by
applicable laws and public
13
policy. The General Partner LLC Agreement, the Partnership Agreement, the
Operating GP Agreement, and the Operating Partnership Agreement are herein
collectively referred to as the "Operative Agreements."
(u) Legal Proceedings. There are no legal or governmental
proceedings pending or, to the best knowledge of the Partnership Entities and
the ▇▇▇▇▇▇ Parties, threatened, against any of the Partnership Entities or
CFMSLP or to which any of the Partnership Entities or CFMSLP any of their
respective properties are subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding or investigation by or
before any court or governmental or other regulatory or administrative agency or
commission pending or, to the best knowledge of the Partnership Entities and the
▇▇▇▇▇▇ Parties, threatened, against or involving any of the Partnership Entities
or CFMSLP, or to which any of their properties are subject, which might
individually or in the aggregate prevent or adversely affect the transactions
contemplated by this Agreement or result in a Material Adverse Effect.
(v) Contracts. There are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are not
described, filed or incorporated by reference in the Registration Statement and
the Prospectus as required by the Act. All such contracts to which any of the
Partnership Entities is a party that are described in the Registration Statement
or the Prospectus or are filed as exhibits to the Registration Statement have
been duly authorized, executed and delivered by the Partnership or other
relevant Partnership Entity, constitute valid and binding agreements of the
Partnership or other relevant Partnership Entity and are enforceable against the
Partnership or other relevant Partnership Entity in accordance with the terms
thereof, by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws relating to or affecting creditors' rights generally
and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law). Neither the Partnership
Entities nor the ▇▇▇▇▇▇ Parties, as applicable, has received notice or been made
aware that any other party is in breach of or violation of, or in default under,
any of such contracts.
(w) No Default. None of the Partnership Entities or CFMSLP is
(i) in violation of (A) its certificate or agreement of limited partnership,
limited liability company agreement, certificate or articles of incorporation or
bylaws, or other organizational documents, (B) any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it, the
violation of which would have a Material Adverse Effect or could materially
impair the ability of any of the Partnership Entities to perform their
obligations under this Agreement, or (C) any judgment, decree or injunction of
any court or governmental agency or body having jurisdiction over it, the
violation of which would have a Material Adverse Effect or could materially
impair the ability of any of the Partnership Entities to perform their
obligations under this Agreement; or (ii) in breach or default in any material
respect in the performance of any obligation, agreement or condition contained
in (A) any bond, debenture, note or any other evidence of indebtedness or (B)
any agreement, contract, indenture, lease or other document or instrument (each
of (A) and (B), an "Existing Instrument") to which it is a party or by which any
of its properties may be bound, which breach or default would have a Material
Adverse Effect or
14
could materially impair the ability of any of the Partnership Entities to
perform their obligations under this Agreement. To the knowledge of the
Partnership Entities or the ▇▇▇▇▇▇ Parties, no third party to any Existing
Instrument is in default under any such Existing Instrument, which default
would, if continued, have a Material Adverse Effect.
(x) No Consents or Conflicts. None of the offering, issuance
and sale of the Units by the Partnership, the execution, delivery or performance
of this Agreement by the Partnership Entities and the ▇▇▇▇▇▇ Parties, or the
consummation of the transactions contemplated hereby (i) requires any consent,
approval, authorization or other order of or registration, qualification or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except (a) such as may be required for
the registration of the Units under the Act, the inclusion of the Units on the
NASDAQ National Market, and compliance with the securities or Blue Sky laws of
various jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement and except for the NASD's clearance of the
underwriting terms of the offering contemplated hereby as required under the
NASD's Rules of Fair Practice and (b) as disclosed in the Registration
Statement, (ii) conflicts with or will conflict with or constitutes or will
constitute a breach or violation of, or a default under, the certificate or
agreement of limited partnership, limited liability company agreement,
certificate or articles of incorporation or bylaws or other organizational
documents of any of the Partnership Entities, the ▇▇▇▇▇▇ Parties or CFMSLP,
(iii) conflicts with or will conflict with or constitute or will constitute a
breach or violation of, or a default under, any Existing Instrument to which any
of the Partnership Entities, the ▇▇▇▇▇▇ Parties or CFMSLP is a party or by which
any of their respective properties may be bound, (iv) violates or will violate
any statute, law, regulation, ruling, filing, judgment, injunction, order or
decree applicable to any of the Partnership Entities, the ▇▇▇▇▇▇ Parties or
CFMSLP or any of their properties, or (v) results in or will result in the
creation or imposition of any lien, encumbrance, security interest, equity,
charge or claim upon any property or assets of any of the Partnership Entities,
the ▇▇▇▇▇▇ Parties or CFMSLP (other than the Permitted Liens, applicable
securities laws and any restrictions set forth in the governing documents of the
Partnership Entities, the ▇▇▇▇▇▇ Parties or CFMSLP) pursuant to, or requires the
consent of any other party to, any Existing Instrument (except as noted above),
except in case of (i), (iii), (iv) or (v) above, for such conflicts, breaches,
defaults, liens, encumbrances, security interests, charges or claims that will
not, individually or in the aggregate, result in a Material Adverse Effect.
(y) Independent Public Accountants. KPMG LLP, the certified
public accountants who have certified the financial statements (including the
related notes thereto and supporting schedules) filed as part of the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), are independent public accountants as required by the Act and the
Exchange Act.
(z) Capitalization; Financial Statements. On September 30,
2003, the Partnership had, on the consolidated basis indicated in the Prospectus
(and any amendment or supplement thereto), a capitalization as set forth
therein. The historical financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly in all material respects the
financial condition, results of operations, cash flows and changes in financial
position of the entities purported to be shown thereby on the basis stated in
the Registration Statement at the
15
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein. The summary and selected
historical and pro forma financial information set forth in the Registration
Statement, the Preliminary Prospectus, and the Prospectus (and any amendment or
supplement thereto) under the captions "Summary Historical and Pro Forma
Financial Data" and "Selected Historical and Pro Forma Financial Data" is
accurately presented in all material respects and prepared on a basis consistent
with the audited and unaudited historical combined and consolidated financial
statements and pro forma financial statements from which such information has
been derived. The pro forma financial statements of the Partnership included in
the Registration Statement, the Preliminary Prospectus and the Prospectus (and
any amendment or supplement thereto) have been prepared in all material respects
in accordance with the applicable accounting requirements of Article 11 of
Regulation S-X of the Commission; the assumptions used in the preparation of
such pro forma financial statements are, in the opinion of the management of the
Partnership Entities, reasonable; and the pro forma adjustments reflected in
such pro forma financial statements have been properly applied to the historical
amounts in compilation of such pro forma financial statements. No other
financial statements or schedules are required to be included in the
Registration Statement.
(aa) No Material Adverse Change. Except as disclosed in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), subsequent to the respective dates as of which such information is
given in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), (i) none of the Partnership Entities or CFMSLP has incurred
any material liabilities or obligations, indirect, direct or contingent, or
entered into any transaction that is not in the ordinary course of business,
(ii) none of the Partnership Entities or CFMSLP has sustained any material loss
or interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, (iii) the
Partnership has not paid or declared any distributions with respect to its
general or limited partners interests, (iv) none of the Partnership Entities or
CFMSLP is in default under the terms of any outstanding debt obligations, (v)
there has not been any change in the capitalization or any material change in
the indebtedness of any of the Partnership Entities or CFMSLP (other than in the
ordinary course of business) and (vi) there has not been any material adverse
change, or any development involving or that may reasonably be expected to
result in a Material Adverse Effect, in the condition (financial or otherwise),
business, prospects, properties, net worth or result of operations of the
Partnership Entities or CFMSLP taken as a whole.
(bb) Prior Sales of Securities. All offers and sales of
securities of the General Partner, the Partnership or any of the other
Partnership Entities prior to the date hereof were made in compliance with or
were the subject of an available exemption from the Act and all other applicable
state and federal laws or regulations.
(cc) NASDAQ Listing. The Common Units are registered pursuant
to Section 12(g) of the Exchange Act and are listed on the NASDAQ National
Market, and the Partnership has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Units under the
Exchange Act or delisting the Common Units from the NASDAQ National Market, nor
have the Partnership Entities or the ▇▇▇▇▇▇ Parties received any
16
notification that the Commission or the NASD is contemplating terminating such
registration or listing.
(dd) No Other Offering Material. None of the Partnership
Entities or the ▇▇▇▇▇▇ Parties has distributed and will not distribute, and has
not authorized the Underwriters to distribute, any offering material in
connection with the offering and sale of the Units other than the Preliminary
Prospectus, the Prospectus or other offering material, if any, as permitted by
the Act.
(ee) No Stabilization or Manipulation. Other than excepted
activity pursuant to Regulation M under the Exchange Act, none of the
Partnership Entities or the ▇▇▇▇▇▇ Parties have taken and will not take,
directly or indirectly, any action that constituted, or any action designed to,
or that might reasonably be expected to cause or result in or constitute, under
the Act or otherwise, stabilization or manipulation of the price of any security
of the Partnership to facilitate the sale or resale of the Units or for any
other purpose.
(ff) Taxes. At each Closing Date, each of the Partnership
Entities and CFMSLP will have filed all tax returns required to be filed, which
returns will be complete and correct in all material respects, and no
Partnership Entity or CFMSLP will be in default in the payment of any taxes that
are payable pursuant to such returns or any assessments with respect thereto.
(gg) Transactions with Affiliates. Except as set forth in the
Prospectus, there are no transactions with "affiliates" (as defined in Rule 405
promulgated under the Act) or any officer, director or security holder of the
Partnership Entities, the ▇▇▇▇▇▇ Parties or CFMSLP (whether or not an affiliate)
that are required by the Act to be disclosed in the Registration Statement.
Additionally, no relationship, direct or indirect, exists between the
Partnership Entities, the ▇▇▇▇▇▇ Parties, CFMSLP or any of their subsidiaries on
the one hand, and the directors, officers, stockholders, customers or suppliers
of the Partnership Entities, the ▇▇▇▇▇▇ Parties, CFMSLP or any of their
subsidiaries on the other hand that is required by the Act to be disclosed in
the Registration Statement and the Prospectus that is not so disclosed.
(hh) Investment Company Act; Public Utility Holding Company
Act. None of the Partnership Entities or CFMSLP is now, and after the sale of
the Units to be sold by the Partnership hereunder and application of the net
proceeds from such sale as described in the Prospectus under the caption "Use of
Proceeds" none of them will be, (i) an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an investment company
within the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"public utility company," "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" thereof, under the Public Utility Holding
Company Act of 1935, as amended.
(ii) Title to Properties. Each of the Partnership Entities and
CFMSLP has good and valid title to all property (real and personal) described in
the Prospectus as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances except (i) such as are described in the
Prospectus, (ii) Permitted Liens, (iii) liens, encumbrances and/or security
interests affecting the property of CFMSLP as a result of CFMSLP's credit
facility, (iv)
17
applicable securities laws, (v) restrictions set forth in the governing
documents of the Partnership Entities or (vi) such as are not materially
burdensome and do not have or will not result in a Material Adverse Effect. All
property (real and personal) held under lease by the Partnership Entities or
CFMSLP is held by them under valid, enforceable leases with only such exceptions
as in the aggregate are not materially burdensome and do not have and will not
result in a Material Adverse Effect.
(jj) Permits. Each of the Partnership Entities and CFMSLP has
all permits, licenses, franchises, approvals, consents and authorizations of
governmental or regulatory authorities (hereinafter "permit" or "permits") as
are necessary to own or lease its properties and to conduct its business in the
manner described in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus, except where the failure to have obtained any such
permit has not had and will not have a Material Adverse Effect.
(kk) Internal Controls. The Partnership Entities and CFMSLP
maintain a system of internal accounting controls sufficient to provide
reasonable assurances 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 accountability for
assets, (iii) access to assets is permitted only in accordance with management's
general or specific authorizations and (iv) the recorded amount of assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(ll) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act Compliance. The principal executive
officer and principal financial officer of the General Partner of the
Partnership have made all certifications required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act or
any related rules and regulations promulgated by the Commission, and the
statements contained in any such certification were complete and correct when
made. The Partnership maintains "disclosure controls and procedures" (as defined
in Rule 13a-14(c) under the Exchange Act), and such controls and procedures are
designed (i) to ensure that information required to be disclosed by the
Partnership in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Commission's rules and forms and (ii) to ensure that information required
to be disclosed by the Partnership in the reports that it files or submits under
the Exchange Act is accumulated and communicated to the Partnership's
management, including its principal executive officer and principal financial
officer, as appropriate to allow timely decisions regarding required disclosure.
The Partnership does not have any material weaknesses in internal controls, and
there has been no fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's internal
controls. The Partnership is otherwise in compliance in all material respects
with all applicable effective provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules
and regulations promulgated by the Commission.
(mm) Environmental Compliance. Except as described in the
Prospectus, the Partnership Entities (i) are in compliance with any and all
applicable federal, state, local and foreign 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 all permits, licenses or other approvals required of
18
them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or other
approvals would not, individually or in the aggregate, have a Material Adverse
Effect. None of the Partnership Entities or CFMSLP has been named as a
"potentially responsible party" under the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, in regard to any unresolved
matter or claim. None of the Partnership Entities or CFMSLP owns, leases or
occupies any property requiring remediation that appears on any list of
hazardous sites compiled by any state or local governmental agency. In the
ordinary course of its business, each of the Partnership Entities and CFMSLP
conducts a periodic review of the effect of Environmental Laws on its business,
operations and properties, in the course of which it identifies and evaluates
associated costs and liabilities (including 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 and amount of its established reserves, each of the
Partnership Entities or CFMSLP has reasonably concluded that such associated
costs and liabilities would not, individually or in the aggregate, result in a
Material Adverse Effect.
(nn) Lock-Up Agreements. The Partnership has procured lock-up
agreements, in the form of Exhibit A attached hereto ("Lock-Up Agreements"),
from each of the executive officers and directors of the General Partner.
(oo) NASD Affiliations. No officer, director, manager or
nominee for any of the Partnership Entities has a direct or indirect affiliation
or association with any member of the NASD.
(pp) Insurance. Each of the Partnership Entities is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which it
is engaged; and none of the Partnership Entities has reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a comparable cost.
(qq) ERISA. Except for the ▇▇▇▇▇▇ Midstream Partners L.P.
Long-Term Incentive Plan (the "Plan"), none of the Partnership Entities is a
party to, or has any liability with respect to, any "employee benefit plan" (as
defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by them or their "ERISA Affiliates" (as
defined below). "ERISA Affiliate" means, with respect to any Partnership Entity,
any member of any group or organization described in Sections 414(b), (c), (m)
or (o) of the Internal Revenue Code of 1986 (as amended, the "Code") of which
such entity is a member. The Plan is in compliance with ERISA and all other
applicable state and federal laws. No "reportable event" (as defined in ERISA)
has occurred with respect to the Plan. The Plan, if it were to be terminated as
of the Closing Date, would not have any "amount of unfunded benefit liabilities"
(as defined in ERISA). No Partnership Entity nor any of their ERISA Affiliates
has incurred or
19
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, the Plan or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each "employee benefit plan" established or
maintained by any Partnership Entity or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, that would cause the
loss of such qualification.
(rr) Forward-Looking Statements. Each of the statements made
by the Partnership in the Registration Statement and the Prospectus within the
coverage of Rule 175(b) under the Act, including (but not limited to) any
statements with respect to future available cash or future cash distributions of
the Partnership or the anticipated ratio of taxable income to cash
distributions, was made with a reasonable basis and in good faith.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the
Partnership Entities and the ▇▇▇▇▇▇ Parties agree to pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Partnership Entities'
counsel and accountants in connection with the registration of the Units under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof and of any
Preliminary Prospectus to the Underwriters and dealers; (ii) the printing and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, the Prospectus, each
Preliminary Prospectus, and all amendments or supplements to any of them as may
be reasonably requested for use in connection with the offering and sale of the
Units; (iii) consistent with the provisions of Section 5(f), all expenses in
connection with the qualification of the Units for offering and sale under state
securities laws or Blue Sky laws, including reasonable attorneys' fees and
out-of-pocket expenses of the counsel for the Underwriters in connection
therewith; (iv) the filing fees incident to securing any required review by the
NASD of the fairness of the terms of the sale of the Units and the reasonable
fees and disbursements of the Underwriters' counsel relating thereto; (v) the
fees and expenses associated with including the Units on the NASDAQ National
Market; (vi) the cost of preparing certificates representing the Units; (vii)
the costs and charges of any transfer agent or registrar; (viii) the cost of the
tax stamps, if any, in connection with the issuance and delivery of the Units to
the respective Underwriters; (ix) all other fees, costs and expenses referred to
in Item 13 of the Registration Statement; and (x) the transportation, lodging,
graphics and other expenses incidental to the Partnership's preparation for and
participation in the "roadshow" for the offering contemplated hereby. Except as
provided in this Section 7 and in Section 8 hereof, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.
8. Indemnification and Contribution. (a) Subject to the limitations in
this paragraph below, the Partnership Entities and the ▇▇▇▇▇▇ Parties agree,
jointly and severally, to indemnify and hold harmless you and each other
Underwriter, the directors, officers, employees and agents of each Underwriter,
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and expenses, including reasonable
costs of investigation and attorneys' fees and expenses (collectively,
"Damages"), arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus
20
or in the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading, except:
(i) to the extent that any such Damages arise out of
or are based upon an untrue statement or omission or alleged untrue
statement or omission that has been made therein or omitted therefrom
in reliance upon and in conformity with the information furnished in
writing to the Partnership by or on behalf of any Underwriter through
you, expressly for use in connection therewith, which information
consists solely of the information specified in Section 14 hereof; or
(ii) with respect to any Preliminary Prospectus, the
foregoing indemnity in this Section 8(a) shall not inure to the benefit
of any Underwriter (or any of its directors, officers or employees or
any person controlling such Underwriter) if copies of the Prospectus
were timely delivered to the Underwriter and a copy of the Prospectus
(as then amended or supplemented if the Partnership shall have
furnished any amendments or supplements thereto) was not sent or given
by or on behalf of such Underwriter to the person claiming Damages, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Units to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such Damages.
This indemnification shall be in addition to any liability that the Partnership
Entities and the ▇▇▇▇▇▇ Parties may otherwise have.
In addition to their other obligations under this Section 8, the
Partnership Entities and the ▇▇▇▇▇▇ Parties agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
inaccuracy in the representations and warranties of the Partnership Entities and
the ▇▇▇▇▇▇ Parties herein or failure to perform their respective obligations
hereunder, all as set forth in this Section 8, the party against whom
indemnification is being sought will reimburse, in accordance with the
provisions of Section 8(c), each Underwriter and each director, officer,
employee, agent or controlling person thereof on a monthly basis for all
reasonable legal or other out-of-pocket expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding (to the extent documented by reasonably itemized invoices
therefor), notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligation of the Partnership Entities and
the ▇▇▇▇▇▇ Parties to reimburse each Underwriter and each director, officer,
employee, agent or controlling person thereof for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter and
each director, officer, employee, agent or controlling person thereof shall
promptly return it to the person(s) from whom it was received. Any such interim
reimbursement payments that are not made to the Underwriters or directors,
officers, employees, agents or controlling persons thereof within 30 days of a
request for reimbursement shall bear interest compounded daily at a rate
determined on
21
the basis of the base lending rate announced from time to time by The Wall
Street Journal from the date of such request.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Partnership Entities and the ▇▇▇▇▇▇ Parties and
their respective directors and officers who sign the Registration Statement and
any person who controls the Partnership Entities or the ▇▇▇▇▇▇ Parties within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing several indemnity from the Partnership Entities and
the ▇▇▇▇▇▇ Parties to each Underwriter and the directors, officers, employees,
agents and controlling persons thereof, but only with respect to information
furnished in writing by or on behalf of such Underwriter through you expressly
for use in the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto.
In addition to their other obligations under this Section 8,
the Underwriters agree, that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of failure
to perform their obligations hereunder, all as set forth in this Section 8, the
party against whom indemnification is being sought will reimburse in accordance
with the provisions of Section 8(c), each Partnership Entity and each ▇▇▇▇▇▇
Party and each director, officer, employee, agent or controlling person thereof
on a monthly basis for all reasonable legal or other out-of-pocket expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding (to the extent documented by
reasonably itemized invoices therefor), notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligation
of the Underwriters to reimburse each Partnership Entity or the ▇▇▇▇▇▇ Party and
each director, officer, employee, agent or controlling person thereof for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Partnership
Entity or ▇▇▇▇▇▇ Party, as the case may be, and each director, officer,
employee, agent or controlling person thereof shall promptly return it to the
person(s) from whom it was received. Any such interim reimbursement payments
that are not made to the Partnership Entities or the ▇▇▇▇▇▇ Parties or the
directors, officers, employees, agents or controlling persons thereof within 30
days of a request for reimbursement shall bear interest compounded daily at a
rate determined on the basis of the base lending rate announced from time to
time by The Wall Street Journal from the date of such request.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, 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 claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified
22
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that the Representatives shall have the right to employ counsel to
represent jointly the Representatives and those other Underwriters and their
respective directors, officers, employees, agents and controlling persons who
may be subject to liability arising out of any claim or action in respect of
which indemnity may be sought by the Underwriters against the Partnership
Entities or the ▇▇▇▇▇▇ Parties under this Section 8 if, in the reasonable
judgment of the Representatives, it is advisable for the Representatives and
those Underwriters, officers, employees and controlling persons to be jointly
represented by separate counsel, and in that event fees and expenses of one such
separate counsel (plus one local counsel if necessary in the opinion of counsel
to the indemnified party) shall be paid by the Partnership Entities or the
▇▇▇▇▇▇ Parties. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), 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, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient for any reason whatsoever to hold harmless an
indemnified party in respect of any Damages referred to herein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Damages (i) in such proportion as is appropriate to reflect the relative
benefits received by the Partnership Entities and the ▇▇▇▇▇▇ Parties on the one
hand, and the Underwriters on the other hand, from the offering and sale of the
Units or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative and
several fault of the Partnership Entities and the ▇▇▇▇▇▇ Parties on the one
hand, and the Underwriters on the other hand, in connection with the statements
or omissions that resulted in such Damages as well as any other relevant
equitable considerations. The relative and several benefits received by the
Partnership Entities and the ▇▇▇▇▇▇ Parties on the one hand, and the
Underwriters on the other hand, shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Partnership bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Partnership Entities and
the ▇▇▇▇▇▇ Parties on the one hand, and the Underwriters on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the ▇▇▇▇▇▇ Parties
on the one hand, or by the Underwriters on the other hand and the parties'
relative intent,
23
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Partnership Entities and the ▇▇▇▇▇▇ Parties and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 8 was determined by a pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the Damages referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount of the underwriting
commissions received by such underwriter in connection with the Units
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8 are several in proportion to the respective numbers of Firm Units set
forth opposite their names in Schedule I hereto (or such numbers of Firm Units
increased as set forth in Section 11 hereof) and not joint.
Any Damages for which an indemnified party is entitled to
indemnification or contribution under this Section 8, in accordance with the
provisions of Section 8(c), shall be paid by the indemnifying party to the
indemnified party as Damages are incurred after receipt of reasonably itemized
invoices therefor. The indemnity, contribution and reimbursement agreements
contained in this Section 8 and the representations and warranties of the
Partnership Entities and the ▇▇▇▇▇▇ Parties set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or director, officer,
employee, agent or controlling person thereof, the Partnership Entities and the
▇▇▇▇▇▇ Parties, their respective directors or officers or any person controlling
the ▇▇▇▇▇▇ Parties, (ii) acceptance of any Units and payment therefor hereunder
and (iii) any termination of this Agreement. A successor to any Underwriter or
director, officer, employee, agent or controlling person thereof, or to the
Partnership Entities or the ▇▇▇▇▇▇ Parties, their respective directors or
officers or any person controlling the ▇▇▇▇▇▇ Parties, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 8.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in the second
paragraph of Section 8(a) or the second paragraph of Section 8(b), including the
amounts of any requested reimbursement payments and the method of determining
such amounts, shall be settled by arbitration conducted pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in the second paragraph of this
Section 8, and
24
would not resolve the ultimate propriety or enforceability of the obligation to
reimburse expenses that is created by the provisions of the first paragraph of
this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Units hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective not
later than 12:00 noon, New York City time, on the date hereof, or at such later
date and time as shall be consented to in writing by the Representatives, and
all filings required by Rules 424(b), 430A and 462 under the Act shall have been
timely made.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration Statement
and Prospectus, (i) there shall not have been any change in the capitalization
or any material change in the indebtedness (other than in the ordinary course of
business) of the Partnership Entities, (ii) except as set forth or contemplated
by the Registration Statement or the Prospectus, no material oral or written
agreement or other transaction shall have been entered into by the Partnership
Entities that is not in the ordinary course of business or that could reasonably
be expected to result in a material reduction in the future earnings of the
Partnership Entities, (iii) no loss or damage (whether or not insured) to the
property of the Partnership Entities or CFMSLP shall have been sustained that
had or could reasonably be expected to have a Material Adverse Effect, (iv) no
legal or governmental action, suit or proceeding affecting the Partnership
Entities or CFMSLP or any of their properties, or that affects or could
reasonably be expected to affect the transactions contemplated by this
Agreement, shall have been instituted or threatened and that would reasonably be
expected to result in a Material Adverse Effect and (v) there shall not have
been any material change in the condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of the Partnership
Entities or CFMSLP that makes it impractical or inadvisable in your judgment to
proceed with the public offering or purchase of the Units as contemplated
hereby.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) a written opinion of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P.,
counsel to the Partnership Entities and the ▇▇▇▇▇▇ Parties, substantially to the
effect that:
(i) Each of the Partnership and the Operating
Partnership has been duly formed and is validly existing in good
standing as a limited partnership under the Delaware LP Act with all
necessary limited partnership power and authority to own or lease its
properties and to conduct its business as presently conducted and as
described in the Registration Statement and the Prospectus, in each
case in all material respects. Each of the Partnership and the
Operating Partnership has been duly registered or qualified as a
foreign limited partnership for the transaction of business under the
laws of each jurisdiction in which the character of the business
conducted by it or the nature or location of the properties owned or
leased by it makes such registration or qualification necessary, except
where the failure to so register or qualify does not have a Material
Adverse Effect.
25
(ii) Each of ▇▇▇▇▇▇ LLC, the General Partner and
Operating GP has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware LLC Act with
all necessary limited liability company power and authority to own or
lease its properties and to conduct its business as presently conducted
and as described in the Registration Statement and the Prospectus, in
each case in all material respects. The General Partner has all
necessary limited liability company power and authority to act as
general partner of the Partnership. Operating GP has all necessary
limited liability company power and authority to act as general partner
of the Operating Partnership. Each of ▇▇▇▇▇▇ LLC, the General Partner
and Operating GP has been duly registered or qualified as a foreign
limited liability company for the transaction of business under the
laws of each jurisdiction in which the character of the business
conducted by it or the nature or location of the properties owned or
leased by it makes such registration or qualification necessary, except
where the failure to so register or qualify does not have a Material
Adverse Effect.
(iii) CFMSLP has been duly formed and is validly
existing in good standing as a limited partnership under the Delaware
LP Act with full partnership power and authority to own or lease and
operate its properties to be owned or leased and operated by it at each
Closing Date and to conduct its business as presently conducted.
(iv) The General Partner is the sole general partner
of the Partnership with a 2% general partner interest in the
Partnership; such general partner interest has been duly authorized and
validly issued in accordance with the Partnership Agreement; and the
General Partner owns such general partner interest free and clear of
all liens, encumbrances, security interests, charges or claims (i) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the General Partner as debtor is
on file in the office of the Secretary of State of Delaware or (ii)
otherwise known to such counsel, without independent investigation, in
each case other than those created by or arising under the Delaware LP
Act, Permitted Liens, applicable securities laws and any restrictions
set forth in the governing documents of the Partnership Entities.
(v) The General Partner owns all of the Incentive
Distribution Rights, MPS owns 1,543,797 Subordinated Units, Midstream
owns 620,644 Subordinated Units and ▇▇▇▇▇▇ LLC owns 2,088,921
Subordinated Units; all of such Subordinated Units and the limited
partner interests represented thereby and the Incentive Distribution
Rights have been duly authorized and validly issued in accordance with
the Partnership Agreement, and are fully paid (to the extent required
under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-607 of the Delaware LP
Act and as otherwise described in the Prospectus under the caption "The
Partnership Agreement--Limited Liability"); and the General Partner,
MPS, Midstream and ▇▇▇▇▇▇ LLC own their respective Subordinated Units
and Incentive Distribution Rights free and clear of all liens,
encumbrances, security interests, charges or claims (i) in respect of
which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the General Partner, MPS, Midstream or ▇▇▇▇▇▇
LLC as debtor is on file in the office of the Secretary of State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, in each case other than those created by or
26
arising under the Delaware LP Act, Permitted Liens, applicable
securities laws, any restrictions set forth in the governing documents
of the Partnership Entities and, with respect to the Incentive
Distribution Rights, any restrictions on transferability set forth in
the governing documents of the Partnership Entities.
(vi) The Units to be issued and sold to the
Underwriters by the Partnership pursuant to the Underwriting Agreement
and the limited partner interests represented thereby have been duly
authorized by the Partnership Agreement and, when issued and delivered
to the Underwriters against payment therefore in accordance with the
terms of the Underwriting Agreement, will be validly issued, fully paid
(to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
Section 17-303 or Section 17-607 of the Delaware LP Act and as
otherwise described in the Prospectus under the caption "The
Partnership Agreement--Limited Liability"); and other than the Sponsor
Units and the Incentive Distribution Rights, the Units are the only
class of limited partner interests of the Partnership issued and
outstanding at the Closing Date.
(vii) MRMC is the sole member of ▇▇▇▇▇▇ LLC with a
100% member interest in ▇▇▇▇▇▇ LLC; such member interest has been duly
authorized and validly issued in accordance with the ▇▇▇▇▇▇ LLC
Agreement and is fully paid (to the extent required under the ▇▇▇▇▇▇
LLC Agreement) and nonassessable (except as such nonassessability may
be affected by Section 18-607 of the Delaware LLC Act); and MRMC owns
such member interest free and clear of all liens, encumbrances,
security interests, charges or claims (i) in respect of which a
financing statement under the Uniform Commercial Code of the State of
Delaware naming MRMC as debtor is on file in the office of the
Secretary of State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, in each case other than those
created by or arising under the Delaware LLC Act, Permitted Liens,
applicable securities laws and any restrictions set forth in the
governing documents of the Partnership Entities.
(viii) The Partnership is the sole member of
Operating GP with a 100% member interest in Operating GP; such member
interest has been duly authorized and validly issued in accordance with
the Operating GP Agreement and is fully paid (to the extent required
under the Operating GP Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act and as otherwise described in the Prospectus under the Caption "The
Partnership Agreement--Limited Liability"); and the Partnership owns
such member interest free and clear of all liens, encumbrances,
security interests, charges or claims (i) in respect of which a
financing statement under the Uniform Commercial Code of the State of
Delaware naming the Partnership as debtor is on file in the office of
the Secretary of State of Delaware or (ii) otherwise known to such
counsel, without independent investigation, in each case other than
those created by or arising under the Delaware LLC Act, Permitted
Liens, applicable securities laws and any restrictions set forth in the
governing documents of the Partnership Entities.
(ix) Operating GP is the sole general partner of the
Operating Partnership with a 0.1% general partner interest in the
Operating Partnership; such
27
general partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement, and is fully paid
(to the extent required under the Operating GP Agreement) and
nonassessable (except as such nonassessability may be affected by
Section 17-303 or Section 17-607 of the Delaware LP Act and as
otherwise described in the Prospectus under the Caption "The
Partnership Agreement--Limited Liability"), and Operating GP owns such
general partner interest free and clear of all liens, encumbrances,
security interests, charges or claims (i) in respect of which a
financing statement under the Uniform Commercial Code of the State of
Delaware naming Operating GP as debtor is on file in the office of the
Secretary of State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, in each case other than those
created by or arising under the Delaware LP Act, Permitted Liens,
applicable securities laws and any restrictions set forth in the
governing documents of the Partnership Entities.
(x) The Partnership is the sole limited partner of
the Operating Partnership with a 99.9% limited partner interest in the
Operating Partnership; such limited partner interest has been duly
authorized and validly issued in accordance with the Operating
Partnership Agreement and is fully paid (to the extent required under
the Operating Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 17-303 and 17-607 of the
Delaware LP Act and as otherwise described in the Prospectus under the
Caption "The Partnership Agreement--Limited Liability"); and the
Partnership owns such limited partner interest free and clear of all
liens, encumbrances, security interests, charges or claims (i) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Partnership as debtor is on
file in the office of the Secretary of State of Delaware or (ii)
otherwise known to such counsel, without independent investigation, in
each case other than those created by or arising under the Delaware LP
Act, Permitted Liens, applicable securities laws and any restrictions
set forth in the governing documents of the Partnership Entities.
(xi) ▇▇▇▇▇▇ LLC is the sole member of the General
Partner with a 100% member interest in the General Partner; such member
interest has been duly authorized and validly issued in accordance with
the General Partner LLC Agreement and is fully paid (to the extent
required under the General Partner LLC Agreement) and nonassessable
(except as such nonassessability may be affected by Section 18-607 of
the Delaware LLC Act); and ▇▇▇▇▇▇ LLC owns such member interest free
and clear of all liens, encumbrances, security interests, charges or
claims (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming ▇▇▇▇▇▇ LLC as debtor is
on file in the office of the Secretary of State of Delaware or (ii)
otherwise known to such counsel, without independent investigation, in
each case other than those created by or arising under the Delaware LLC
Act, Permitted Liens, applicable securities laws and any restrictions
set forth in the governing documents of the Partnership Entities.
(xii) The Operating Partnership is a limited partner
of CFMSLP with an aggregate 49.5% limited partner interest in CFMSLP;
such limited partner interest has been duly authorized and validly
issued in accordance with the partnership agreement, as
28
amended, of CFMSLP and is fully paid (to the extent required under the
CFMSLP Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 17-303 and 17-607 of the
Delaware LP Act and as otherwise described in the Prospectus under the
Caption "The Partnership Agreement--Limited Liability"); and the
Operating Partnership owns such limited partner interest free and clear
of all liens, encumbrances, security interests, charges or claims (i)
in respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Operating Partnership as
debtor is on file in the office of the Secretary of State of Delaware
or (ii) otherwise known to such counsel, without independent
investigation, in each case other than those created by or arising
under the Delaware LP Act, applicable securities laws, any restrictions
set forth in the governing documents of the Partnership Entities, and
any transfer restrictions and buy/sell obligations contained in the
governing documents of CFMSLP or its general partner.
(xiii) Except for rights described in the Prospectus,
or for rights that have been waived, there are no preemptive rights or
other rights to subscribe for or to purchase, nor any restriction upon
the voting or transfer of, any partnership or member interests in the
Partnership Entities, in each case pursuant to the organizational
documents or any agreement or other instrument listed as an exhibit to
the Registration Statement to which any Partnership Entity is a party
or by which any of them may be bound. To such counsel's knowledge,
neither the filing of the Registration Statement nor the offering or
sale of the Units as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any Units or other
securities of any Partnership Entity, except for rights described in
the prospectus or for such rights that have been waived. To such
counsel's knowledge, except as described in the Prospectus, there are
no outstanding options or warrants to purchase partnership or member
interests in any Partnership Entity.
(xiv) The Partnership has all necessary limited
partnership power and authority to issue, sell and deliver the Units,
in accordance with and upon the terms and conditions set forth in this
Agreement, the Partnership Agreement, the Registration Statement and
the Prospectus.
(xv) This Agreement has been duly authorized and
validly executed and delivered by each of the Partnership Entities and
the ▇▇▇▇▇▇ Parties.
(xvi) Each of the Operative Agreements to which any
of the Partnership Entities or the ▇▇▇▇▇▇ Parties is a party has been
duly authorized and validly executed and delivered by the Partnership
Entities or the ▇▇▇▇▇▇ Parties that are parties thereto. Assuming due
authorization, execution and delivery by each party other than a
Partnership Entity and a ▇▇▇▇▇▇ Party, each of the Operative Agreements
(other than any Operative Agreement governed by law other than Texas
law) to which any of the Partnership Entities or the ▇▇▇▇▇▇ Parties is
a party constitutes a valid and legally binding obligation of the
Partnership Entities or the ▇▇▇▇▇▇ Parties that are parties thereto,
enforceable against each such party in accordance with its terms,
subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws relating to or affecting
creditors' rights generally and by general principles of equity
29
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (ii) public policy, applicable law
relating to fiduciary duties and indemnification and contribution and
an implied covenant of good faith and fair dealing.
(xvii) Except as described in the Prospectus, to the
knowledge of such counsel, there is no action, suit, inquiry,
proceeding or investigation by or before any court or governmental or
other regulatory or administrative agency or commission pending or
threatened, against or involving any of the Partnership Entities or the
▇▇▇▇▇▇ Parties, or to which any of the Partnership Entities or the
▇▇▇▇▇▇ Parties or their properties are subject that are required to be
described in the Registration Statement or Prospectus that are not
described as required therein.
(xviii) None of the offering, issuance and sale of
the Units by the Partnership, the execution, delivery or performance of
this Agreement by the Partnership Entities and the ▇▇▇▇▇▇ Parties that
are parties hereto, or the consummation of the transactions
contemplated hereby (i) conflicts with or will conflict with or
constitutes or will constitute a breach or violation of, or a default
under, the certificate or agreement of limited partnership, limited
liability company agreement, certificate or articles of incorporation
or bylaws (or other organizational documents) of any of the Partnership
Entities and the ▇▇▇▇▇▇ Parties, (ii) constitutes or will constitute a
breach or violation of, or a default (or an event that, with notice or
lapse of time or both, would constitute such a default) under, any
Operative Agreement or any other agreement filed as an exhibit to the
Registration Statement, (iii) violates or will result in any violation
of (assuming compliance with all applicable state securities and Blue
Sky laws) any applicable Delaware, Texas or federal law or regulation,
or any ruling, filing, judgment, injunction, order or decree of any
Delaware, Texas or federal court or government agency applicable to the
Partnership Entities and the ▇▇▇▇▇▇ Parties, or (iv) results in or will
result in the creation or imposition of any lien, encumbrance, security
interest, charge or claim (other than Permitted Liens) upon any
property or assets of any of the Partnership Entities, which conflicts,
breaches, violations, defaults or liens, encumbrances, security
interests, charges or claims, in the case of clauses (ii), (iii) or
(iv), would individually or in the aggregate, result in a Material
Adverse Effect.
(xix) No consent, approval, authorization or other
order of, or registration, qualification or filing with, any Delaware,
Texas or federal court, regulatory body, administrative agency or other
governmental body, agency or official is required on the part of any of
the Partnership Entities for the valid offering, issuance and sale of
the Units to the Underwriters under this Agreement, the execution,
delivery and performance of this Agreement by the Partnership Entities
and the ▇▇▇▇▇▇ Parties that are parties hereto or the consummation by
the Partnership Entities and the ▇▇▇▇▇▇ Parties of the transactions
contemplated by this Agreement except (i) for such consents required
under the Act and the Exchange Act or under state securities or "Blue
Sky" laws, as to which such counsel need to express any opinion, (ii)
for such consents which have been obtained or made, (iii) for such
consents which (A) are of a routine or administrative nature and (B)
are not customarily obtained or made prior to the consummation of
transactions such as those contemplated by this Agreement or (iv) for
such consents
30
which, if not obtained or made, would not, individually or in the
aggregate, have a Material Adverse Effect.
(xx) The Registration Statement has been declared
effective by the Commission under the Act. To the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for such
purpose have been instituted or are pending or are contemplated or
threatened by the Commission. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) under the Act has been
made in the manner and within the time period required by such Rule
424(b).
(xxi) The Registration Statement, including any Rule
462 Registration Statement, the Prospectus and each amendment or
supplement to the Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial
statements and the notes and schedules thereto, and the other
financial, statistical and accounting data included in the Registration
Statement, Prospectus and in the exhibits to or excluded from the
Registration Statement, as to which no opinion need be given) comply as
to form in all material respects with the requirements of the Act.
(xxii) None of the Partnership Entities is (i) an
"investment company", as such term is defined in the Investment Company
Act of 1940, as amended, or (ii) a "public utility holding company" or
"holding company" under the Public Utility Holding Company Act of 1935,
as amended.
(xxiii) The opinion of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P. that is
filed as Exhibit 8.1 to the Registration Statement is confirmed and the
Underwriters may rely on such opinion as if it were addressed to them.
(xxiv) The statements in the Registration Statement
and Prospectus under the captions "Cash Distribution Policy,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Description of Our Credit Facility," "Certain
Relationships and Related Transactions," "Conflicts of Interest and
Fiduciary Responsibilities," "Description of the Common Units,"
"Description of the Subordinated Units" and "The Partnership Agreement"
accurately describe, in all material respects, the portions of the
documents addressed thereby and, insofar as they purport to constitute
summaries of law or legal conclusions, are accurate in all material
respects; the description of the statutes and regulations set forth in
the Registration Statement and Prospectus under the caption
"Business--Environmental and Regulatory Matters" fairly describe in all
material respects the portions of the statutes and regulations
addressed thereby; and the Common Units, the Subordinated Units and the
Incentive Distribution Rights conform in all material respects to the
descriptions thereof contained in the Registration Statement and
Prospectus under the captions "Prospectus Summary--The Offering," "Cash
Distribution Policy," "Description of the Common Units," "Description
of the Subordinated Units" and "The Partnership Agreement."
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Partnership Entities and of
31
government officials as well as on the legal opinion of local counsel as to
certain legal matters, provided that counsel shall state their belief that they
and you are justified in relying thereon. Copies of all such certificates shall
be furnished to you and your counsel on the Closing Date and the Additional
Closing Date, as the case may be.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Partnership Entities,
the independent public accountants of the Partnership, and the Underwriters, at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed, and although such counsel has not independently
verified, is not passing on, and is not assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in, the
Registration Statement and the Prospectus (except to the extent specified in the
foregoing opinion), based on the foregoing, no information has come to such
counsel's attention that causes such counsel to believe that the Registration
Statement (other than (i) the financial statements included therein, including
the notes and schedules thereto and the auditors' reports thereon, (ii) the
other financial, statistical and accounting data included therein, and (iii) the
exhibits thereto, as to which such counsel need not comment), as of its
effective date contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (other than (i) the
financial statements included therein, including the notes and schedules thereto
and the auditors' reports thereon, (ii) the other financial, statistical and
accounting data included therein, and (iii) the exhibits thereto, as to which
such counsel need not comment), as of its issue date and the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(d) You shall have received on the Closing Date or Additional
Closing Date, as the case may be, an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., as
counsel for the Underwriters, dated the Closing Date or Additional Closing Date,
as the case may be, with respect to the issuance and sale of the Units, the
Registration Statement and other related matters as you may reasonably request,
and the Partnership Entities, the ▇▇▇▇▇▇ Parties and their counsel shall have
furnished to your counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(e) You shall have received letters addressed to you and dated
the date hereof and the Closing Date or the Additional Closing Date, as the case
may be, from the firm of KPMG LLP, independent certified public accountants (i)
confirming that they are independent public accountants within the meaning of
the Act and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and (ii) stating, as of the date thereof (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date thereof), the conclusions and findings of
such firm with respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection with
registered public offerings.
32
(f) All corporate, partnership and limited liability company
proceedings and other legal matters incident to the authorization, form and
validity of this Agreement, the Operative Agreements, the Units, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Partnership shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall be pending or, to the knowledge of the
Partnership, shall be threatened or contemplated by the Commission at or prior
to the Closing Date or Additional Closing Date, as the case may be; (ii) no
order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Units under the securities or Blue Sky laws
of any jurisdiction shall be in effect and no proceeding for such purpose shall
be pending or, to the knowledge of the Partnership, threatened or contemplated
by the authorities of any jurisdiction; (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities; (iv) after the date hereof, no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in good faith;
and (v) all of the representations and warranties of the ▇▇▇▇▇▇ Parties
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date or Additional Closing Date, as the case
may be, as if made on and as of the Closing Date or Additional Closing Date, as
the case may be, and you shall have received a certificate, dated the Closing
Date or the Additional Closing Date, as the case may be, and signed by the chief
executive officer and the chief financial officer of the General Partner of the
Partnership (or such other officers as are acceptable to you) to the effect set
forth in this Section 9(g) and in Sections 9(b) and 9(h) hereof.
(h) The Partnership Entities and the ▇▇▇▇▇▇ Parties shall not
have failed in any material respect at or prior to the Closing Date or the
Additional Closing Date, as the case may be, to have performed or complied with
any of their agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the Closing Date or Additional
Closing Date, as the case may be.
(i) The Partnership shall have furnished or caused to have
been furnished to you such further certificates and documents as you shall have
reasonably requested.
(j) At or prior to the Closing Date, you shall have received
Lock-Up Agreements from each of the directors and executive officers of the
General Partner not to (except as provided in such Lock-Up Agreement) directly
or indirectly (i) sell, offer or contract to sell or otherwise dispose of or
transfer any Common Units, whether now owned or acquired after the date of the
Prospectus or with respect to which the power of disposition is acquired after
the date of the Prospectus, or file any registration statement under the Act
with respect to the foregoing or (ii) enter into any swap or other agreement
that transfers, in whole or in part, directly or indirectly, the economic
consequences of ownership of Common Units whether any such swap or transaction
is to be settled by delivery of Common Units, in cash or otherwise,
33
before the expiration of 120 days from the Closing Date, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
(k) At or prior to the effective date of the Registration
Statement, you shall have received a letter from the Corporate Financing
Department of the NASD confirming that such Department has determined to raise
no objections with respect to the fairness or reasonableness of the underwriting
terms and arrangements of the offering contemplated hereby.
(l) The NASDAQ National Market shall have approved the Units
for inclusion therein, subject only to official notice of issuance, and
satisfactory evidence of such actions shall have been provided to the
Underwriters.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel. Any representation made in any
certificate executed by an officer of the General Partner shall be deemed to be
a representation of the Partnership.
The several obligations of the Underwriters to purchase Additional
Units hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Additional Units.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Partnership of such
termination in writing or by telegram at or prior to such Closing Date, but you
shall be entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective
upon the later of (a) the execution and delivery hereof by the parties hereto
and (b) release of notification of the effectiveness of the Registration
Statement by the Commission; provided, however, that the provisions of Sections
7 and 8 shall at all times be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase Firm Units that it or they have agreed to
purchase hereunder, and the aggregate number of Firm Units that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Firm Units, each non-defaulting
Underwriter shall be obligated, severally, in the proportion in which the number
of Firm Units set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Units set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Units that such
defaulting Underwriter or Underwriters agreed, but failed or refused, to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Units and the aggregate number of Firm Units with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Units and
arrangements satisfactory to you and the Partnership for the purchase of such
Firm Units are not made within 48 hours after such default, this
34
Agreement will terminate without liability on the part of any non-defaulting
Underwriter, the Partnership Entities or the ▇▇▇▇▇▇ Parties. In any such case
that does not result in termination of this Agreement, either you or the
Partnership shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to any of the Partnership Entities or the ▇▇▇▇▇▇ Parties by notice
to the Partnership, if prior to the Closing Date or the Additional Closing Date
(if different from the Closing Date and then only as to the Additional Units),
as the case may be, in your sole judgment, (i) trading in the Partnership's
Common Units shall have been suspended by the Commission or the NASDAQ, (ii)
trading in securities generally on the NYSE or NASDAQ shall have been suspended
or materially limited, or minimum or maximum prices shall have been generally
established on such exchange, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by any such exchange or by order of the Commission or
any court or other governmental authority, (iii) a general moratorium on
commercial banking activities shall have been declared by either federal or New
York State authorities, (iv) there shall have occurred any material disruption
in commercial banking or securities settlement or clearance services, or (v)
there shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial or
economic conditions or other material event the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to market the Units or to enforce contracts for the
sale of the Units. Notice of such cancellation shall be promptly given to the
Partnership and its counsel by telegraph, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Partnership Entities, the ▇▇▇▇▇▇ Parties or their respective 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 the
Underwriters or the Partnership Entities, the ▇▇▇▇▇▇ Parties 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 Units. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
14. Information Furnished by the Underwriters. The Partnership Entities
and the ▇▇▇▇▇▇ Parties acknowledge that
(i) the second to the last paragraph of the cover page of the
Prospectus regarding delivery of the Units,
(ii) the list of the Underwriters and their respective participation in
the sale of the Units, and
35
(iii) the statements set forth in the third, eighth, ninth, and
fourteenth paragraphs, the last sentence of the tenth paragraph, and the second
sentence of the seventh paragraph, in each case under the caption "Underwriting"
in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 6(a), 6(b) and 8
hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered:
(i) to the Partnership:
▇▇▇▇▇▇ Midstream Partners L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇ Lemon, III
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) to the Underwriters:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
2300 First City Tower
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
36
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Partnership Entities, the ▇▇▇▇▇▇ Parties and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the indemnities of
the Partnership Entities and the ▇▇▇▇▇▇ Parties contained in Section 8 shall
also be deemed to be for the benefit of each director, officer, employee and
agent of any Underwriter and any person who controls any Underwriter within the
meaning of Section 15 of the Act and (B) the indemnity agreement of the
Underwriters contained in Section 8 of this Agreement shall be deemed to be for
the benefit of each director of the General Partner, each officer of the General
Partner who has signed the Registration Statement and any person who controls
any of the Partnership Entities or the ▇▇▇▇▇▇ Parties within the meaning of
Section 15 of the Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
15, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
16. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
17. Waiver of Jury Trial. The Partnership and the Underwriters each
hereby irrevocably waive any right they may have to a trial by jury in respect
of any claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
37
Please confirm that the foregoing correctly sets forth the agreement
among the Partnership Entities, the ▇▇▇▇▇▇ Parties and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇ RESOURCE MANAGEMENT
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
▇▇▇▇▇▇ RESOURCE LLC
By: ▇▇▇▇▇▇ Resource Management Corporation,
as sole member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
▇▇▇▇▇▇ MIDSTREAM GP LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
▇▇▇▇▇▇ MIDSTREAM PARTNERS L.P.
By: ▇▇▇▇▇▇ Midstream GP LLC,
as general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
S-1
▇▇▇▇▇▇ OPERATING GP LLC
By: ▇▇▇▇▇▇ Midstream Partners, L.P.,
as sole member
By: ▇▇▇▇▇▇ Midstream GP LLC,
as general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
▇▇▇▇▇▇ OPERATING PARTNERSHIP L.P.
By: ▇▇▇▇▇▇ Operating GP LLC,
as general partner
By: ▇▇▇▇▇▇ Midstream Partners, L.P.,
as sole member
By: ▇▇▇▇▇▇ Midstream GP LLC,
as general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Executive Vice President
and Chief Financial Officer
S-2
CONFIRMED as of the date first above mentioned.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇. ▇. ▇▇▇▇▇▇▇ & SONS, INC.
MCDONALD INVESTMENTS INC.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
Acting on behalf of themselves and as the Representatives of the other several
Underwriters named in Schedule I hereto.
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Authorized Representative
S-3
SCHEDULE I
Number
Name Firm Units
---- ------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. ...................... 460,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. ............................. 345,000
McDonald Investment Inc., a KeyCorp Company ........... 172,500
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. ................................ 172,500
============
TOTAL: ................................................ 1,150,000
============
EXHIBIT A
January __, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇. ▇. ▇▇▇▇▇▇▇ & SONS, INC.
MCDONALD INVESTMENTS INC.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
As Representatives of the Several Underwriters
c/o Raymond ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: ▇▇▇▇▇▇ MIDSTREAM PARTNERS L.P. (THE "PARTNERSHIP") - RESTRICTION ON STOCK
SALES
Dear Sirs:
This letter is delivered to you pursuant to the
Underwriting Agreement
(the "
Underwriting Agreement") to be entered into by the Partnership Entities
and the ▇▇▇▇▇▇ Parties (as such terms are defined in the
Underwriting
Agreement), including the Partnership, as issuer, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates,
Inc. and the Representatives (the "Representatives") of certain underwriters
(the "Underwriters") to be named therein. Upon the terms and subject to the
conditions of the
Underwriting Agreement, the Underwriters intend to effect a
public offering of Common Units of the Partnership (the "Units"), as described
in and contemplated by the registration statement of the Partnership on Form
S-1, File No. 333-111450 (the "Registration Statement"), as amended, as
originally filed with the Securities and Exchange Commission on December 22,
2003 (the "Offering"). Capitalized terms used but not defined herein have the
respective meanings assigned to such terms in the
Underwriting Agreement.
The undersigned recognizes that it is in the best financial interests
of the undersigned that the Partnership completes the proposed Offering.
The undersigned further recognizes that the Units held by the
undersigned are, or may be, subject to certain restrictions on transferability,
including those imposed by United States federal securities laws.
Notwithstanding these restrictions, the undersigned has agreed to enter into
this letter agreement to further assure the Underwriters that the Units of the
undersigned, now held or hereafter acquired, will not enter the public market at
a time that might impair the underwriting effort.
Therefore, as an inducement to the Underwriters to execute the
Underwriting Agreement, the undersigned hereby acknowledges and agrees that the
undersigned will not (i) sell, offer, contract to sell, pledge, grant any option
to purchase or otherwise dispose of (collectively, a "Disposition") any Units,
or any securities convertible into or exercisable or exchangeable for, or any
rights to purchase or otherwise acquire, any Units held by the undersigned or
acquired by the undersigned after the date hereof, or that may be deemed to be
beneficially owned by the undersigned (collectively, the "Lock-Up Units"),
pursuant to the Rules and Regulations
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promulgated under the Act and the Exchange Act for a period commencing on the
date hereof and ending 120 days after the date of the Partnership's Prospectus
first filed pursuant to Rule 424(b) under the Act, inclusive (the "Lock-Up
Period"), without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
or (ii) exercise or seek to exercise or effectuate in any manner any rights of
any nature that the undersigned has or may have hereafter to require the
registration under the Act the undersigned's sale, transfer or other disposition
of any of the Lock-Up Units or other securities of the Partnership Entities held
by the undersigned, or to otherwise participate as a selling securityholder in
any manner in any registration effected by the Partnership Entities under the
Act, including under the Registration Statement, during the Lock-Up Period. The
foregoing restrictions are expressly agreed to preclude the undersigned from
engaging in any hedging, collar (whether or not for any consideration) or other
transaction that is designed to or reasonably expected to lead or result in a
Disposition of Lock-Up Units during the Lock-Up Period, even if such Lock-Up
Units would be disposed of by someone other than such holder. Such prohibited
hedging or other transactions would include any short sale or any purchase, sale
or grant of any right (including any put or call option or reversal or
cancellation thereof) with respect to any Lock-Up Units or with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from Lock-Up Units.
Notwithstanding the agreement not to make any Disposition during the
Lock-Up Period, you have agreed that the foregoing restrictions shall not apply
to:
(1) the Units being offered in the prospectus included in the Registration
Statement; or
(2) Units issued by the Partnership under ▇▇▇▇▇▇ Midstream GP LLC Long Term
Incentive Plan or upon the exercise of options issued under such plan.
It is understood that, if the
Underwriting Agreement (other than the
provisions thereof that survive termination) shall terminate or be terminated
prior to payment for and delivery of the Units, you will release the undersigned
from the obligations under this letter agreement.
In furtherance of the foregoing, the Partnership and its transfer agent
and registrar is hereby authorized to decline to make any transfer of Lock-Up
Units if such transfer would constitute a violation or breach of this letter.
This letter shall be binding on the undersigned and the respective successors,
heirs, personal representatives and assigns of the undersigned.
Very truly yours,
--------------------------------------------
Name
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