FOURTH AMENDMENT TO GENERAL PARTNERSHIP AGREEMENT OF SOUTHERN NATURAL GAS COMPANY November 19, 2010
Exhibit 10.5
FOURTH AMENDMENT
TO
OF
SOUTHERN NATURAL GAS COMPANY
November 19, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
TO
OF
SOUTHERN NATURAL GAS COMPANY
This FOURTH AMENDMENT to GENERAL PARTNERSHIP AGREEMENT OF SOUTHERN NATURAL GAS COMPANY (the
“Amendment”), is made and entered into as of this 19th day of November, 2010, by El Paso SNG
Holding Company, L.L.C., a Delaware limited liability company (“EP SNG”), and EPPP SNG GP Holdings,
L.L.C., a Delaware limited liability company (“EPPP SNG”), each as a general partner of the
Partnership (collectively, “the Partners”).
WITNESSETH:
WHEREAS, Southern Natural Gas Company (“SNGC”), a Delaware corporation, owned and operated an
interstate natural gas pipeline system and, through its subsidiaries, conducted other businesses;
and
WHEREAS, in accordance with Section 266 of the Delaware General Corporation Law (“DGCL”) and
Section 15-901 of the Delaware Revised Uniform Partnership Act (“DRUPA”), SNGC was converted (the
“Conversion”) into a Delaware general partnership (the “Partnership”), with the Partnership’s
existence deemed in accordance with DRUPA Section 15901(d) to have commenced on the date that SNGC
commenced its existence as a Delaware corporation; and
WHEREAS, pursuant to the General Partnership Agreement of Southern Natural Gas Company (the
“Agreement”) and the Conversion, the stockholders of SNGC, EP SNG and EPPP SNG, became general
partners of the Partnership, all of the issued and outstanding shares of capital stock in SNGC were
converted into Partnership Interests in the Partnership, and the stockholders of SNGC became the
owners of all of the Partnership Interests in the Partnership, each holding the Percentage Interest
set forth opposite its name on Annex I to the Agreement; and
WHEREAS, pursuant to the Contribution and Exchange Agreement dated September 17, 2008, the
Agreement was amended on September 30, 2008 to reflect the contribution, transfer and conveyance to
EPPP SNG of a 15% Percentage Interest in the Partnership such that EPPP SNG owned a 25% Partnership
Interest and EP SNG owned a 75% Partnership Interest; and
WHEREAS, pursuant to the Contribution Agreement dated June 17, 2010, and for good and valuable
consideration, EP SNG agreed to contribute, transfer and convey to EPPP SNG an additional 16%
Partnership Interest in the Partnership with a 90-day option to purchase an additional 4%
Partnership Interest in the Partnership; and
WHEREAS, on June 23, 2010, the Agreement was amended to reflect the contribution, transfer and
conveyance to EPPP SNG of the additional 16% Percentage Interest in the Partnership such that EPPP
SNG owned a 41% Partnership Interest and EP SNG owned a 59% Partnership Interest; and
WHEREAS, on June 28, 2010, the Board of Directors of El Paso Pipeline GP Company, L.L.C.
elected to exercise its option to acquire the additional 4% Partnership Interest in the
Partnership, and on June 30, 2010, the Agreement was amended to reflect the contribution, transfer
and conveyance to EPPP SNG of the additional interest such that EPPP SNG owned a 45% Partnership
Interest and EP SNG owned a 55% Partnership Interest; and
WHEREAS, pursuant to the Contribution Agreement dated November 12, 2010, and for good and
valuable consideration, EP SNG agreed to contribute, transfer and convey to EPPP SNG an additional
15% Partnership Interest in the Partnership; and
WHEREAS, in accordance with Section 3.4 of the Agreement, the Partners and the Management
Committee of SNGC have expressly approved and consented (and do hereby expressly approve and
consent) to the admission of El Paso Pipeline Partners, L.P., a Delaware limited partnership, or
its designee as a partner of SNGC owning a 60% Partnership Interest and having all of the rights,
privileges and obligations relating thereto, including the right to vote on Partnership matters.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Partners hereby agree:
1. Section 6.2(h) of the Agreement shall be deleted in its entirety and shall be replaced with
the following new Section 6.2(h):
| (h) | Matters Requiring Management Committee Approval. Except as expressly provided elsewhere in this Agreement, none of the following actions may be taken by, or on behalf of the Partnership, without first obtaining the vote of the Management Committee or Partners described below: |
(i) Unanimous Interest. The following actions shall require the
approval of all Representatives or Partners:
(A) to the fullest extent permitted by law, dissolution of the
Partnership under Section 11.1(a);
(B) to the fullest extent permitted by law, causing or permitting the
Partnership to become Bankrupt (but this provision is not intended to
require, nor shall it be construed to require, any Partner to ensure the
profitability or solvency of the Partnership);
(C) causing the Partnership to mortgage or pledge any of its properties
or assets with a value exceeding a total of $450 million to
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secure the payment or performance of any obligation for the repayment
of borrowed money or any guarantee of such repayment;
(D) the commencement before the FERC, or the resolution through
settlement, stipulation or other consensual means, in whole or in part,
before the FERC (or before any United States Court of Appeals on an appeal
of an order of the FERC), of any proceeding or controversy, including any
NGA Section 4 (15 U.S.C. Section 717(c)) general rate case, or an appeal of
any order thereof, the outcome of which would cause either:
(i) the Partnership’s revenues to be reduced by a total of $100
million or more annually;
(ii) the Partnership to pay penalties, refunds or interest of, a
total of $50 million or more; or
(iii) to agree to any
criminal penalty;
(E) any amendment to this Agreement (including any amendment to
Section 5.1), other than an amendment solely made to change
the Partnership’s name;
(F) the creation of any additional Partnership Interests of any
class in accordance with Section 3.4 and specifying the
rights, class(es) and duties thereof, or the proposed admission of
any Person (other than a Permitted Transferee) as a partner of the
Partnership, whether as a result of the Disposition by a Partner of
all or any part of its Partnership Interest or otherwise, provided,
however, that the Disposition by a Partner of all or any part of its
Partnership Interest to a Permitted Transferee shall not require the
prior approval of the Management Committee;
(G) any proposal to sell or otherwise Dispose of assets of the
Partnership (excluding any agreement to sell service using capacity
on the Facilities), whether in a single transaction or any series of
transactions, outside the ordinary course of the Partnership’s
business with a value exceeding a total of $450 million in any
calendar year;
(H) the Disposition or abandonment of all or substantially all
of the assets of the Partnership, and any Disposition (including a
Deemed Tax Disposition, if such Disposition, when added to the total
of all other Dispositions (including Deemed Tax Dispositions) within
the preceding twelve months, results in the Partnership being
considered to have terminated within the meaning of
Section 708(b)(1)(B) of the Code;
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(I) causing or permitting the Partnership to merge with, or
consolidate or convert into, any other entity;
(J) entering into, conducting, or authorizing the Partnership
to conduct, any new activity or business that may cause the
Partnership to generate income for federal income tax purposes which
will not constitute “qualifying income” (as such term is defined
pursuant to Section 7704 of the Code); or
(K) any amendment to the Master Services Agreement, other than
any amendment that the Management Committee determines would not
materially adversely affect the Partnership;
(ii) Majority Interest. Except for matters that are covered by
Section 6.2(h)(i) or matters that the law otherwise requires
approval by a greater percentage, a Majority Interest shall be required to
approve any action that requires approval of the Partners or the
Representatives, including the following matters:
(A) causing the Partnership to take any action under this
Agreement that requires Management Committee approval other than the
actions specified in Section 6.2(h)(i);
(B) the determination of the amount of Available Cash with
respect to each Quarter;
(C) approving, modifying or amending the annual Capital Budget
and Operating Budget for the Partnership (with it being understood
that the latest approved Capital Budget or Operating Budget shall be
used, and deemed approved, for any subsequent period until the new
Capital Budget or Operating Budget (as applicable) for that period
is so approved), including the parameters under which the Officers
are authorized to expend Partnership funds without further
Management Committee approval;
(D) issuing or causing to be issued any Capital Call under
Section 4.1 or Loan Notice under Section 4.2;
(E) any additions to (by acquisition, development, construction
or otherwise) or expansions or extensions of the Facilities,
provided that any additions, expansions or extensions to the
Facilities approved by either (I) any duly authorized Officer(s)
pursuant to authority delegated by the Management Committee or (II)
in accordance with the Master Services Agreement, shall be deemed
approved by the Management Committee for purposes hereof and shall
not require separate approval;
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(F) appointing Officers of the Partnership and determining
their authority to act on behalf of the Partnership;
(G) designating Officers or employees to serve on the audit
committee of the Partnership, if one shall be established by the
Management Committee;
(H) any change in the Partnership’s name;
(I) causing the Partnership to enter into any short-term or
long-term indebtedness, but Working Capital Borrowings made from
time-to-time under an agreement previously approved as contemplated
herein need not be further approved by the Management Committee;
(J) except for any commencement or resolution that requires the
unanimous approval of the Management Committee pursuant to
Section 6.2(i)(D) above, the commencement before the FERC,
or the resolution through settlement, stipulation or other
consensual means of any matter brought under the NGA Section 4 (15
U.S.C. Section 717(c)) or Section 5 (15 U.S.C. Section 717(d));
provided that the Management Committee may delegate to any duly
authorized Officer(s) the right(s) to commence or resolve any such
proceeding involving $25 million or less;
(K) making any tax elections under the Code; or
(L) except for any mortgage or pledge of any properties or
assets that requires the unanimous approval of the Management
Committee pursuant to Section 6.2(i)(C) above, causing the
Partnership to mortgage or pledge any of its properties or assets to
secure the payment or performance of any obligation for the
repayment of borrowed money or any guarantee of such repayment.
2. Annex I to the Agreement shall be deleted in its entirety and shall be replaced with the
attached Annex I.
3. In accordance with Section 3.4 of the Agreement, the Partners and the Management Committee
of SNGC have expressly approved and consented (and do hereby expressly approve and consent) to the
admission of El Paso Pipeline Partners, L.P., a Delaware limited partnership, or its designee as a
partner of SNGC owning a 60% Partnership Interest and having all of the rights, privileges and
obligations relating thereto, including the right to vote on Partnership matters.
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4. This Amendment shall be governed by and construed under the laws of the State of Delaware
(without regard to conflict of laws principles), all rights and remedies being governed by said
laws.
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IN WITNESS WHEREOF, the Partners have executed this Amendment as of the date first set forth
above.
| PARTNERS: | ||||
| EL PASO SNG HOLDING COMPANY, L.L.C. | ||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: | Vice President and Treasurer | |||
| EPPP SNG GP HOLDINGS, L.L.C. | ||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||
| Title: | President | |||
[Signature page to Fourth Amendment to Partnership Agreement of Southern Natural Gas Company]
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ANNEX I
| Number of | ||||||||||
| Representatives | Identity of | |||||||||
| Partner Identity | Percentage | and Alternative | Identity of | Alternate | ||||||
| and Address | Interest | Representatives | Representatives | Representatives | Parent | |||||
El Paso SNG Holding |
40% | 1 Representative | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | El Paso Corporation | |||||
Company, L.L.C. |
and up to 1 | |||||||||
El Paso Building |
Alternate | |||||||||
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: |
||||||||||
EPPP SNG GP |
60% | 3 Representatives | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | El Paso Pipeline | ||||||
Holdings, L.L.C. |
and up to | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | Partners, L.P. | |||||||
El Paso Building |
3 Alternates | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||||
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: |